EX-10.5






Exhibit 10.5




MEMBERSHIP UNIT SUBSCRIPTION AGREEMENT




     THIS MEMBERSHIP UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered
into as of June 23, 2008, by and among RHI Entertainment, Inc., a Delaware corporation (“RHI
Inc.”), KRH Investments LLC, a Delaware limited liability company (formerly RHI Entertainment
Holdings, LLC, “KRH”), and RHI Entertainment Holdings II, LLC, a Delaware limited liability
company (“Holdings II”).



RECITALS




     A. WHEREAS, RHI Inc. is contemplating an offer and sale of its shares of common stock, par
value $ 0.01 per share (“Shares”), to the public in an underwritten initial public offering
(the “Initial Public Offering”).



     B. WHEREAS, pursuant to that certain reorganization agreement, dated as of September 14, 2007
(the “Reorganization Agreement”), KRH, Holdings II and RHI Inc. have agreed to effectuate
the transactions described or referenced therein.



     C. WHEREAS, immediately prior to or simultaneously with the consummation of the transactions
contemplated by this Agreement, RHI Inc. will become the sole managing member of Holdings II and
KRH will become the non-managing member of Holdings II pursuant to that certain amended and
restated limited liability operating agreement of Holdings II, as it may be amended, supplemented
or otherwise modified from time to time (the “LLC Agreement”).



     D. WHEREAS, Holdings II desires to issue Membership Units to RHI Inc. in exchange for the
proceeds received from RHI Inc.’s Initial Public Offering.



     E. WHEREAS, Holdings II desires to issue Membership Units to KRH in exchange for the
contribution of its interests in RHI Entertainment LLC, a Delaware limited liability company (the
“Contributed Asset”).



     F. WHEREAS, immediately after the Initial Closing (as defined herein), Holdings II desires to
make a cash distribution of $35.7 million (the “Cash Distribution”) to KRH, which is
intended to return capital contributions by KRH used for the funding of capitalized film production
costs incurred within the two years prior to payment of the Cash Distribution.



     G. WHEREAS, the parties hereto intend for the contribution of the Contributed Asset by KRH and
the proceeds received from RHI Inc.’s Initial Public Offering in exchange for Membership Units to
be treated as contributions of property governed by Section 721(a) of the Internal Revenue Code of
1986, as amended and the Cash Distribution to be treated as a payment as described in Treasury
Regulations Section 1.707-4(d).



     H. NOW, THEREFORE, In consideration of the covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, RHI
Inc., KRH and Holdings II agree as follows:



 









 





AGREEMENT




1. Definitions




     1.1 Certain Definitions. For purposes of this Agreement, the following terms shall have
the meanings specified in this Section 1.1:



     “Cash Distribution” has the meaning set forth in the Recitals.



     “Contributed Asset” has the meaning set forth in the Recitals.



     “Encumbrance” means, with respect to any specified asset, any security interest, lien,
mortgage, claim, charge, pledge, restriction, option, reservation, equitable interest, deed of
trust, right of first refusal, easement, servitude or encumbrance of any nature.



     “Holdings II” has the meaning set forth in the Preamble.



     “Initial Closing” means the closing of the transactions contemplated in Sections 2.1,
2.2, 3.1 and 3.2.



     “Initial Closing Date” has the meaning set forth in Section 2.3.



     “Initial Public Offering” has the meaning set forth in the Recitals.



     “IPO Proceeds” means the proceeds received by RHI Inc. in exchange for the issuance
and sale of Shares in connection with the Initial Public Offering, calculated by the price per
share at which Shares are sold to the public multiplied by the number of Shares sold to the public,
less underwriting discounts and commissions. For the avoidance of doubt, IPO Proceeds shall not
include the Over-Allotment Proceeds.



     “KRH” has the meaning set forth in the Preamble.



     “KRH Units” has the meaning set forth in Section 3.1.



     “LLC Agreement” has the meaning set forth in the Recitals.



     “Membership Units” means the common membership units of Holdings II as described in
the LLC Agreement.



     “Optional Closing” means the closing of the transactions contemplated in Section 2.5.



     “Optional Closing Date” has the meaning set forth in Section 2.5(c).



     “Over-Allotment Option” has the meaning set forth in Section 2.5(a).



     “Over-Allotment Proceeds” means the proceeds received by RHI Inc. in connection with
the Underwriters’ purchase of Shares in connection with the Over-Allotment Option, calculated
by the price per share at which Shares are sold to the public multiplied by the number of
Shares sold to the public, less underwriting discounts and commissions.



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     “Over-Allotment Units” means the Membership Units, if any, issued by Holdings II to
RHI Inc. pursuant to Section 2.5.



     “Prospectus” means the final prospectus for the Initial Public Offering contained in
the registration statement filed on Form S-1 with the Securities and Exchange Commission.



     “RHI Inc.” has the meaning set forth in the Preamble.



     “RHI Inc. Consideration” has the meaning set forth in Section 2.2.



     “RHI Inc. Units” has the meaning set forth in Section 2.1.



     “Shares” has the meaning set forth in the Recitals.



     “Total Issued Units” means the total number of KRH Units, RHI Inc. Units, and, if any,
Over-Allotment Units.



     “Transaction Documents” mean the transactional and organizational documents entered
into contemporaneously with this Agreement by either Holdings II, RHI Inc. or KRH, as applicable,
in connection with the Initial Public Offering.



     “Underwriting Agreement” means the underwriting agreement to be entered into among RHI
Inc. and the managing underwriters for the Initial Public Offering.



2. RHI Inc. Units.



     2.1 Transfer. Holdings II hereby agrees to issue to RHI Inc. on the Initial Closing Date,
and RHI Inc. hereby agrees to subscribe to and accept on the Initial Closing Date, free and clear
of all Encumbrances, a number of Membership Units equal to the number of Shares sold (excluding any
Shares sold pursuant to the exercise of the Over-Allotment Option) in the Initial Public Offering
(collectively, the “RHI Inc. Units”).



     2.2 Consideration. The consideration for the RHI Inc. Units shall be an amount equal to
the IPO Proceeds (the “RHI Inc. Consideration”), which shall be delivered to Holdings II at
the Initial Closing by wire transfer of immediately available funds in accordance with Section 2.4.



     2.3 Initial Closing. The Initial Closing Date shall be held at the offices of Latham &
Watkins LLP, 885 Third Avenue, New York, NY 10022 at the time and date on which all the conditions
set forth in
Section 7 have been satisfied or waived, or at such later time and date as RHI Inc., Holdings
II and KRH shall agree in writing (such time and date, the “Initial Closing Date”).



     2.4 Initial Closing Deliverables.




     (a) Holdings II shall deliver, or cause to be delivered, the following documents to RHI
Inc. at the Initial Closing:



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     (i) a certificate or certificates representing the RHI Inc. Units being issued
to RHI Inc. identifying RHI Inc. as the registered holder thereof; and




     (ii) all other customary documents, instruments or certificates as shall be
reasonably requested by RHI Inc. and as shall be consistent with the terms of this
Agreement; and




     (b) RHI Inc. shall deliver, or cause to be delivered, the following documents to
Holdings II at the Initial Closing:




     (i) the RHI Inc. Consideration by wire transfer of immediately available funds
to an account designated by Holdings II at least three business days prior to the
Initial Closing.



     2.5 Issuance of Additional Membership Units.




     (a) Holdings II hereby agrees to issue to RHI Inc., and RHI Inc. hereby agrees to
subscribe to and accept, free and clear of all Encumbrances, a number of Membership Units
equal to the number of Shares sold to the Underwriters pursuant to the Underwriters’ option
to purchase additional Shares under the Underwriting Agreement (the “Over-Allotment
Option”) in exchange for RHI Inc.’s contribution of the Over-Allotment Proceeds of such
Over-Allotment Option, which shall be delivered to Holdings II at the Optional Closing by
wire transfer of immediately available funds in accordance with Section 2.5(c).




     (b) RHI Inc. and Holdings II both agree and acknowledge that Holdings II’s obligations
to issue any Over-Allotment Units in connection with the Over-Allotment Option are
contingent upon the Underwriters’ exercise of their Over-Allotment Option. If the
Underwriters exercise their Over-Allotment Option, RHI Inc. will, contemporaneously with the
sale of Shares by RHI Inc. to the Underwriters pursuant to the Over-Allotment Option,
subscribe to a number of Over-Allotment Units from Holdings II equal to the number of Shares
purchased by the Underwriters from RHI Inc. pursuant to the Over-Allotment Option.




     (c) The Optional Closing shall be held at the offices of Latham & Watkins LLP, 885
Third Avenue, New York, NY 10022 at the time and date on which all the conditions set forth
in Section 7 have been satisfied or waived, or at such later time and date as RHI Inc. and
Holdings II shall agree in writing (such time and date, the “Optional Closing
Date”).




     (d) Holdings II shall deliver, or cause to be delivered, the following documents to RHI
Inc. at the Optional Closing:




     (i) a certificate or certificates representing the Over-Allotment Units being
issued and sold to RHI Inc. in connection with the Over-Allotment Option,
identifying RHI Inc. as the registered holder thereof; and



4









 






     (ii) all other customary documents, instruments or certificates as shall be
reasonably requested by RHI Inc. and as shall be consistent with the terms of this
Agreement.




     (e) RHI Inc. shall deliver, or cause to be delivered, the following documents to
Holdings II at such Optional Closing:




     (i) the Over-Allotment Proceeds by wire transfer of immediately available funds
to an account designated by Holdings II at least three business days prior to such
Optional Closing; and




     (ii) a letter evidencing the exercise of the Over-Allotment Option by the
Underwriters in a form reasonably satisfactory to Holdings II.



     2.6 Closing Costs; Transfer Taxes and Fees. Holdings II shall be responsible for the
documentary and transfer taxes and any sales or other similar taxes, if any, imposed on the
issuance of the Membership Units under this Agreement (including those Membership Units issued and
sold in connection with the Over-Allotment Option) and any deficiency, interest or penalty asserted
with respect thereto.


3. Contribution of Contributed Asset; Issuance of Membership Units; Subsequent Cash
Distribution.




     3.1 Transfer. Subject to the terms and conditions of this Agreement, Holdings II
hereby agrees to issue to KRH on the Initial Closing Date, and KRH hereby agrees to accept on the
Initial Closing Date, free and clear of all Encumbrances, 9,900,000 Membership Units (the “KRH
Units”). KRH shall contribute, convey, assign, transfer and deliver to Holdings II or its
designee free and clear of any Encumbrances, and Holdings II or its designee does hereby acquire
and accept from KRH, all of KRH’s right, title and interest in the Contributed Asset.



     3.2 Initial Closing. The Initial Closing shall be held on the Initial Closing Date.



     3.3 Initial Closing Deliverables.




     (a) Holdings II shall deliver, or cause to be delivered, the following documents to KRH
at the Initial Closing:




     (i) a certificate or certificates representing the KRH Units being issued and
sold to KRH identifying KRH as the registered holder thereof; and




     (ii) all other customary documents, instruments or certificates as shall be
reasonably requested by KRH and as shall be consistent with the terms of this
Agreement.




     (b) KRH shall deliver, or cause to be delivered, the following documents to Holdings II
at the Initial Closing:



5









 






     (i) all customary documents, instruments or certificates as shall be
reasonably requested by Holdings II and as shall be consistent with the terms of
this Agreement.



     3.4 Closing Costs; Transfer Taxes and Fees. Holdings II shall be responsible for the
documentary and transfer taxes and any sales or other similar taxes, if any, imposed on the
issuance of the KRH Units under this Agreement and any deficiency, interest or penalty asserted
with respect thereto.



     3.5 Cash Distribution. By executing and delivering this Agreement, Holdings II agrees
to make, and on the Initial Closing Date will make, the Cash Distribution to KRH with a portion of
the RHI Inc. Consideration. Notwithstanding anything in the LLC Agreement to the contrary, the
Cash Distribution to KRH shall be permitted under the LLC Agreement and RHI Inc. and KRH agree that
this Agreement shall serve to amend Section 5.4 of the LLC Agreement with respect to the Cash
Distribution and to waive their respective rights to receipt of the Cash Distribution on a pro rata
basis in accordance with their respective interests in Holdings II.


4. Representations and Warranties of Holdings II. As of the date of this Agreement and
as of each of the Initial Closing Date and, if applicable, the Optional Closing Date, Holdings II
represents and warrants to RHI Inc. and KRH as follows:




     4.1 Organization; Good Standing; Qualification. Holdings II is a limited liability
company, duly organized and validly existing under the laws of the State of Delaware and is in good
standing under such laws. Holdings II has the requisite power and authority to own and operate its
properties and assets, and to carry on its business as presently conducted and as proposed to be
conducted. Holdings II is in good standing and qualified to do business in every jurisdiction
where the failure to so qualify would have a material adverse effect on its business or financial
condition or its ability to enter into this Agreement or to consummate the transactions
contemplated hereby.



     4.2 Authorization. The execution, delivery and performance of this Agreement and the
issuance of the Membership Units have been duly authorized by Holdings II. This Agreement
constitutes the legal, valid and binding obligation of Holdings II enforceable against Holdings II
in accordance
with its terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the enforcement of
creditors’ rights generally and (ii) the effect of rules of law governing the availability of
equitable remedies.



     4.3 Consents. Except as has been obtained or will be obtained prior to the Initial
Closing and, if applicable, the Optional Closing, no consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority or other third party on the
part of Holdings II is required in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.



     4.4 Capitalization of Holdings II. Immediately prior to the execution and delivery of
this Agreement, there are no Membership Units issued and outstanding. There are no outstanding
options, warrants, rights (including conversion or preemptive rights), voting



6









 








agreements, investor
or other type of agreement with respect to the Membership Units or other agreements for the
purchase or acquisition from Holdings II of any Membership Units; provided,
however, that the execution of any Transaction Document by the parties hereto either prior
to, or contemporaneously with, this Agreement shall be expressly excluded from this Section 4.4.
The assets and liabilities of Holdings II are as set forth in the financial statements included in
the Prospectus as of the date indicated.



5. Representations and Warranties of RHI Inc. As of the date of this Agreement and as of
each of the Initial Closing Date and, if applicable, the Optional Closing Date, RHI Inc. hereby
represents and warrants to Holdings II as follows:



     5.1 Organization; Good Standing; Qualification. RHI Inc. is a corporation duly organized
and validly existing under the laws of the State of Delaware and is in good standing under such
laws. RHI Inc. has the requisite power and authority to own and operate its properties and assets,
and to carry on its business as presently conducted and as proposed to be conducted. RHI Inc. is
in good standing and qualified to do business in every jurisdiction where the failure to so qualify
would have a material adverse effect on its ability to enter into this Agreement or to consummate
the transactions contemplated hereby.



     5.2 Authorization. The execution, delivery and performance of this Agreement and the
subscription to the RHI Inc. Units have been duly authorized by RHI Inc. This Agreement constitutes
the legal, valid and binding obligation of RHI Inc. enforceable against RHI Inc. in accordance with
its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of creditors’ rights
generally and (ii) the effect of rules of law governing the availability of equitable remedies.



     5.3 Consents. Except as has been obtained or will be obtained prior to Initial Closing
and, if applicable, the Optional Closing no consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority or other third party on the part of RHI Inc.
is required in connection with the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.



6. Representations and Warranties of KRH.




     As of the date of this Agreement and as of the Initial Closing Date, KRH hereby represents and
warrants to Holdings II as follows:



     6.1 Organization; Good Standing; Qualification. KRH is a limited liability company duly
organized and validly existing under the laws of the State of Delaware and is in good standing
under such laws. KRH has the requisite power and authority to own and operate its properties and
assets, and to carry on its business as presently conducted and as proposed to be conducted. KRH
is in good standing and qualified to do business in every jurisdiction where the failure to so
qualify would have a material adverse effect on its ability to enter into this Agreement or to
consummate the transactions contemplated hereby.



     6.2 Authorization. The execution, delivery and performance of this Agreement and the
subscription to the KRH Units and contribution of the Contribution Asset have been duly



7









 







authorized
by KRH. This Agreement constitutes the legal, valid and binding obligation of KRH enforceable
against KRH. in accordance with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies.



     6.3 Consents. Except as has been obtained or will be obtained prior to Initial Closing,
no consent, approval or authorization of, or designation, declaration or filing with, any
governmental authority or other third party on the part of KRH is required in connection with the
execution and delivery of this Agreement or the consummation of the transactions contemplated
hereby.


7. Conditions to Closing.




     7.1 Conditions to the Obligations of All Parties. The obligations of the parties under
this Agreement are subject to the fulfillment or waiver of the following conditions:




     (a) There shall not have been issued and be in effect any order, decree or judgment of,
or in, any court, tribunal of competent jurisdiction or governmental authority which makes
the issue of the Total Issued Units or any of the other transactions contemplated by this
Agreement illegal or invalid;




     (b) RHI Inc. shall have entered into the Underwriting Agreement with respect to the
Initial Public Offering and all conditions to the consummation thereof shall have been, or
will contemporaneously be, satisfied, except for conditions to be satisfied under this
Agreement at the Initial Closing and, if applicable, the Optional Closing;




     (c) Holdings II shall have been recapitalized in the manner described in the
Prospectus; and




     (d) The transactions described in the Prospectus under “Reorganization and offering
transactions” shall have been completed prior to, or will be completed contemporaneously
with, the execution of this Agreement.



     7.2 Condition to Obligations of RHI Inc. In addition to the conditions specified in
Section 7.1, the obligations of RHI Inc. under this Agreement are subject to the fulfillment or
waiver of the following conditions:




     (a) all covenants, agreements and conditions contained in this Agreement to be
performed by Holdings II on or prior to each of the Initial Closing and, if applicable, the
Optional Closing shall have been performed or complied with in all material respects;




     (b) each of the representations and warranties of Holdings II set forth in this
Agreement that is qualified as to a material adverse effect shall be true and correct, and
each of the representations and warranties of Holdings II set forth in this Agreement that
is not so qualified shall be true and correct in all material respects, in each case, as of
the date of this Agreement and as of each of the Initial Closing Date and, if applicable,
the Optional Closing Date as though made on and as of the Initial Closing Date and, if



8









 







applicable, the Optional Closing Date (except to the extent in either case that such
representations and warranties speak as of another date); and




     (c) Holdings II shall have delivered, or caused to be delivered, to RHI Inc.
instruments of transfer and other transaction documents, in form and substance reasonably
satisfactory to RHI Inc., to effect the issue of the RHI Inc. Units and the other
transactions contemplated by this Agreement, including those documents identified in Section
2.4(a) and 3.3(a).



     7.3 Conditions to the Obligations of Holdings II. In addition to the conditions specified
in Section 7.1, the obligations of Holdings II under this Agreement are subject to the fulfillment
or waiver of the following conditions:




     (a) all covenants, agreements and conditions contained in this Agreement to be
performed by RHI Inc. on or prior to the Initial Closing and, if applicable, the Optional
Closing shall have been performed or complied with in all material respects;




     (b) each of the representations and warranties of RHI Inc. set forth in this Agreement
that is qualified as to a material adverse effect shall be true and correct, and each of the
representations and warranties of RHI Inc. set forth in this Agreement that is not so
qualified shall be true and correct in all material respects, in each case, as of the date
of this Agreement and as of the Initial Closing Date and, if applicable, the Optional
Closing Date as though made on and as of the Initial Closing Date and, if applicable, the
Optional Closing Date (except to the extent in either case that such representations and
warranties speak as of another date); and




     (c) RHI Inc. shall have delivered to Holdings II instruments of transfer and other
transaction documents, in form and substance reasonably satisfactory to Holdings II, to
effect the issue of the RHI Inc. Units and the other transactions contemplated by this
Agreement, including those documents identified in Section 2.4(b).



     7.4 Conditions to the Obligations of KRH. In addition to the conditions specified in
Section 7.1, the obligations of KRH under this Agreement are subject to the fulfillment or waiver
of the following conditions:




     (a) all covenants, agreements and conditions contained in this Agreement to be
performed by Holdings II on or prior to the Initial Closing shall have been performed or
complied with in all material respects;




     (b) each of the representations and warranties of Holdings II set forth in this
Agreement that is qualified as to a material adverse effect shall be true and correct, and
each of the representations and warranties of Holdings II set forth in this Agreement that
is not so qualified shall be true and correct in all material respects, in each case, as of
the date of this Agreement and as of the Initial Closing Date as though made on and as of
the Initial Closing Date (except to the extent in either case that such representations and
warranties speak as of another date); and



9









 






     (c) Holdings II shall have delivered to KRH instruments of transfer and other
transaction documents, in form and substance reasonably satisfactory to KRH, to effect the
issue of the KRH Units and the other transactions contemplated by this Agreement, including
those documents identified in Section 3.3(a).



8. Termination. If the conditions set forth in Section 7 are not satisfied or waived on
or before the completion of the Initial Public Offering or if the registration statement with
respect to the Initial Public Offering is withdrawn for any reason prior to that date, this
Agreement shall become null and void and be of no further force or effect whatsoever and neither
Holdings II, KRH nor RHI Inc. shall have any further obligations hereunder or with respect hereto.


9. Covenants.




     9.1 Further Assurances. From time-to-time and after the date hereof, Holdings II shall
deliver or cause to be delivered to RHI Inc. and KRH such further documents and instruments and
shall do and cause to be done such further acts as RHI Inc. and KRH shall reasonably request to
carry out more effectively the provisions and purposes of this Agreement.



     9.2 No Transfer or Encumbrance. Between the date hereof and each of the Initial Closing
Date and, if applicable, the Optional Closing Date and except as specifically disclosed in the
Prospectus, Holdings II shall not issue, grant or sell any additional Membership Units or any
rights to any Membership Units.



     9.3 Conduct of the Business. Between the date hereof and each of the Initial Closing Date
and, if applicable, the Optional Closing Date and except as specifically disclosed in the
Prospectus, Holdings II shall (i) conduct the business of Holdings II in the ordinary course
consistent with past practice, (ii) use all commercially reasonable efforts to (A) retain the
services of its key employees, (B) preserve Holdings II’s relationships with material customers,
suppliers, sponsors, licensees and creditors, and (C) maintain and keep Holdings II’s properties
and assets in as good repair and condition as at present, ordinary wear and tear excepted, (iii)
maintain its capital structure as it exists on the date of this Agreement, except as specifically
contemplated hereunder.


10. Miscellaneous.




     10.1 Governing Law. This Agreement shall be governed by and construed in all respects in
accordance with the laws of the State of Delaware without giving effect to principles of conflicts
of law.



     10.2 Notices. All notices, demands or other communications to be given under or by reason
of this Agreement shall be in writing and shall be deemed to have been received when delivered
personally, or when transmitted by overnight delivery service, addressed as follows:


If to RHI Inc.:



RHI Entertainment, Inc.

1325 Avenue of the Americas, 21st Floor

New York, NY 10019




10









 







Attention: General Counsel

Fax: (212) 977-3917



with a copy to:



Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Attention: Raymond Y. Lin, Esq.

Fax: (212) 751-4864



If to Holdings II:



RHI Entertainment Holdings, II LLC

1325 Avenue of the Americas, 21st Floor

New York, NY 10019

Attention: General Counsel

Fax: (212) 977-3917



with a copy to:



Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Attention: Raymond Lin, Esq.

Fax: (212) 751-4864



If to KRH:



KRH Investments LLC

c/o Kelso & Company L.P.

325 Park Avenue, 24th Floor

New York, NY 10022

Attn: James Conners, Esq.

Fax: (212) 223-2379




     Any party to this Agreement may change its address for notices, demands and other
communications under this Agreement by giving notice of such change to the other party hereto in
accordance with this Section 10.2.



     10.3 Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by any of the parties hereto and the closing of the transactions
contemplated hereby.



     10.4 Benefit of Parties; Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors, legal representatives and permitted assigns. This Agreement may
not be assigned by any party without the prior written



11









 







consent of the other parties to this
Agreement, and any assignment without such consent shall be null and void. Nothing herein
contained shall confer or is intended to confer on any third party or entity that is not a party to
this Agreement any rights under this Agreement.



     10.5 Amendment. This Agreement may not be amended, modified, altered or supplemented
except by means of a written instrument executed on behalf of each of RHI Inc., KRH and Holdings
II.



     10.6 Waiver. No failure on the part of either party hereto to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of either party hereto in
exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver
thereof; and no single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right, privilege or remedy.



     10.7 Severability. If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.



     10.8 Entire Agreement. This Agreement sets forth the entire understanding of the parties
hereto and supersedes all other agreements and understandings between the parties hereto relating
to the subject matter hereof including, without limitation, the Reorganization Agreement.



     10.9 Counterparts and Facsimiles. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties and delivered to
the other. The parties hereto may execute the signature pages hereof and exchange such signature
pages by facsimile transmission.



     10.10 Interpretation of Agreement.




     (a) As used in this Agreement, the words “include” and “including, “and variations
thereof, shall not be deemed to be terms of limitation, and shall be deemed to be followed
by the words “without limitation.”




     (b) Unless otherwise specified, references in this Agreement to “Sections” and
“Exhibits” are intended to refer to Sections of, and Exhibits to, this Agreement.




     (c) The Section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement.




     (d) Each party hereto and its counsel cooperated in drafting and preparation of this
Agreement and the documents referred to in this Agreement. Any rule of law or any legal
decision that would require interpretation of any ambiguities in this Agreement against the
party that drafted it is of no application and is hereby expressly waived.



[Signature page to follow]




12









 






               IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.



	 	 	 	 	 
	 	RHI ENTERTAINMENT HOLDINGS II, LLC

 	 
	 	By:  	/s/ Henry S. Hoberman
 	 
	 	 	Name:  	Henry S. Hoberman 	 
	 	 	Title:  	Executive Vice President

General Counsel & Secretary	 
	 
	 	RHI ENTERTAINMENT, INC.

 	 
	 	By:  	/s/ Henry S. Hoberman
 	 
	 	 	Name:  	Henry S. Hoberman 	 
	 	 	Title:  	Executive Vice President

General Counsel & Secretary	 
	 
	 	KRH INVESTMENTS LLC

 	 
	 	By:  	/s/ Henry S. Hoberman
 	 
	 	 	Name:  	Henry S. Hoberman 	 
	 	 	Title:  	Executive Vice President

General Counsel & Secretary	 
	 



Signature Page — Subscription Agreement