Document:

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is entered into as of [      ], 2008 between RHI Entertainment, Inc., a Delaware corporation (the “Corporation”), and KRH Investments LLC, a Delaware limited liability company (“KRH”). The Corporation and KRH are parties to the Limited Liability Company Operating Agreement of RHI Entertainment Holdings II, LLC (“Holdings II”), dated [         ], 2008 (the “LLC Agreement”).

The parties agree as follows:

1. Defined Terms; Interpretation.

(a) Defined Terms. The following terms shall have the following meanings in this Agreement:

“Adverse Effect” has the meaning set forth in Section 2(a)(vi) of this Agreement.

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

“Agreement” has the meaning set forth in the preamble of this Agreement.

“Board” means the Board of Directors of the Corporation.

“Business Day” means a day other than a Saturday, Sunday, federal holiday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“CEO” means the Chief Executive Officer of the Corporation.

“CFO” means the Chief Financial Officer of the Corporation.

 “Common Stock” shall mean the Corporation’s common stock, par value $0.01 per share, and any securities into which such shares may hereinafter be reclassified.

“Control” (including the terms “Controlling,” “Controlled by” and “under common Control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

 

 

 

“Corporation” has the meaning set forth in the preamble of this Agreement.

 “Director” means a member of the Board.

“Equity Interests” means, with respect to the Corporation, any and all shares of capital stock in the Corporation or securities convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares.

“Exchange Act” means the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

 “Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Group” has the meaning set forth in Section 13(d)(3) of the Exchange Act.

“IPO” means an initial primary sale by the Corporation of shares of Common Stock to the public in an offering pursuant to an effective registration statement (other than a registration statement on Form S-4 or S-8 or any similar or successor form) filed under the Securities Act, so that after giving effect to such offering, such shares of Common Stock are listed on one or more nationally recognized exchanges or quoted on one or more automated quotation systems, including the NYSE or NASDAQ, respectively. 

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

“KRH Registrable Securities” has the meaning set forth in Section 2(a)(i)(1) of this Agreement.

“LLC Act” means the Delaware Limited Liability Company Act, 6 Del.C. §§ 18-101, et seq., as it may be amended from time to time, and any successor to such statute.

“LLC Agreement” has the meaning set forth in the preamble of this Agreement.

“Losses” has the meaning set forth in Section 2(g)(i) of this Agreement.

 

 

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“Member” means KRH and each Person that becomes a member, as contemplated in the LLC Act, of Holdings II in accordance with the provisions of the LLC Agreement and that has not ceased to be a Member as provided in Section 3.1(d) of the LLC Agreement, and each of such Member’s Permitted Transferees, if applicable.

 “NASDAQ” has the meaning set forth in Section 2(d)(viii) of this Agreement. 

“NYSE” has the meaning set forth in Section 2(d)(viii) of this Agreement. 

“Officer” means a person designated as an officer of the Corporation by the Board or the CEO.

 “Other Holder Registrable Securities” has the meaning set forth in Section 2(a)(i)(4) of this Agreement.

“Permitted Transferee” has the meaning set forth in the LLC Agreement.

“Person” means any individual, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated association, joint venture, Governmental Authority or other entity or organization of any nature whatsoever or any Group of two or more of the foregoing.

“Registrable Securities” means the Shares and any other securities issued or issuable with respect to or in exchange for the Shares. As to any particular Registrable Securities, such Shares and any other securities issued or issuable with respect to or in exchange for the Shares shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such Shares and any other securities issued or issuable with respect to or in exchange for the Shares shall have become effective under the Securities Act and such Shares and any other securities issued or issuable with respect to or in exchange for the Shares shall have been disposed of in accordance with such registration statement, (ii) such Shares and any other securities issued or issuable with
respect to or in exchange for the Shares shall have been distributed to the public pursuant to Rule 144, or (iii) such Shares and any other securities issued or issuable with respect to or in exchange for the Shares shall have ceased to be outstanding.

“Registration Expenses” means any and all expenses incident to performance of or compliance with Sections 2(a), 2(b), 2(c) and 2(d), including (i) all SEC and stock exchange or automated quotation system or NASD, Inc. registration, filing and listing fees, (ii) all fees and expenses of complying with state securities or blue sky laws (including fees and disbursements of counsel for the underwriters in connection

 

 

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with blue sky qualifications of the Registrable Securities), (iii) all printing, word processing, duplication, messenger and delivery expenses, (iv) all fees and expenses incurred in connection with the listing of the Registrable Securities on any stock exchange or automated quotation system pursuant to this Agreement, (v) the fees and disbursements of counsel for the Corporation and of its independent public accountants, including the expenses of any special audits or “cold comfort” letters or both required by or incident to such performance and compliance, (vi) the reasonable fees and disbursements of one counsel for all of the Members, selected by the Members participating in such registration and reasonably satisfactory to the Corporation, (vii) any reasonable fees and disbursements of underwriters and their counsel customarily paid by the issuers or
sellers of securities, including liability insurance if the Corporation so desires or if the underwriters so require, and the reasonable fees and expenses of any special experts retained in connection with any registration, but excluding underwriting discounts and commissions and transfer taxes, if any, and (viii) all reasonable expenses (including travel expenses) incurred in connection with any “road shows” (including the reasonable expenses of any applicable selling Member).

“Registration Indemnified Parties” has the meaning set forth in Section 2(g)(i) of this Agreement. 

 “Rule 144” means Rule 144 (or any successor provision), as the same may be amended from time to time, under the Securities Act.

“SEC” means the U.S. Securities and Exchange Commission or any other federal agency then administering the Securities Act or the Exchange Act and other federal securities law.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

“Senior Officers” means the CEO and CFO, collectively.

“Shares” means the shares of Common Stock issued and issuable to any KRH pursuant to the exercise by KRH of its Exchange Right (as defined in the LLC Agreement) and their conversion or exchange rights as set forth in the Corporation’s Certificate of Incorporation.

“Subsidiary” means, with respect to any Person, (i) a corporation a majority of whose capital stock with the general voting power under ordinary circumstances to vote in the election of directors of such corporation (irrespective of whether or not, at the time, any other class or classes of securities shall have, or might have, voting power by reason of the happening of any contingency) is at the time

 

 

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beneficially owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof or (ii) any other Person (other than a corporation), including a joint venture, a general or limited partnership or a limited liability company, in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, beneficially own at least a majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Persons performing such functions) or act as the general partner or managing member of such other Person.

“Third Party Registrant” has the meaning set forth in Section 2(b)(i) of this Agreement.

“Transaction Delay Notice” has the meaning set forth in Section 2(a)(vii)(1) of this Agreement.

“Transfer” (including the term “Transferred”) means, directly or indirectly, to sell, transfer, give, exchange, bequest, assign, pledge, encumber, hypothecate or otherwise dispose of, either voluntarily or involuntarily (including upon the foreclosure under any pledge or hypothecation permitted below that results in a change in title), any Equity Interests in the Corporation or other assets beneficially owned by a Person or any interest in any Equity Interests in the Corporation or other assets beneficially owned by a Person. Notwithstanding the foregoing: a bona fide pledge of the Shares or other Equity Interests by any Member or its Affiliates shall not be deemed to be a Transfer hereunder.

(b) Other Definitional Provisions; Interpretation.

(i) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole, including the Exhibits and Schedules attached hereto, and not to any particular provision of this Agreement. Articles, section and subsection references are to this Agreement unless otherwise specified.

(ii) The words “include” and “including” and words of similar import when used in this Agreement shall be deemed to be followed by the words “without limitation”.

(iii) The titles and headings in this Agreement are included for convenience of reference only and will not limit or otherwise affect the meaning or interpretation of this Agreement.

(iv) The meanings given to capitalized terms defined herein will be equally applicable to both the singular and plural forms of such terms, Whenever the

 

 

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context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

2. Registration Rights and Procedures.

(a) Registration on Request of KRH.

(i) Request. Subject to the lock-up agreement applicable to KRH in connection with the IPO, KRH may request in writing no earlier than 90 days prior to the expiration of such lock-up agreement that the Corporation effect the registration for resale under the Securities Act of all or part of KRH’s Registrable Securities on a resale registration statement on Form S-1. Any such request will specify (a) the number of Registrable Securities proposed to be sold and (b) the intended method of disposition thereof. Subject to the other provisions of this Section 2(a), the Corporation shall promptly and as expeditiously as possible, use its reasonable best efforts to effect the registration under the Securities Act , but in no
event prior to the expiration of such underwriter lock-up period, of:

(1) the Registrable Securities which the Corporation has been so requested to register by KRH (“KRH Registrable Securities”);

(2) all Registrable Securities of the same class(es) or series as the KRH Registrable Securities which have been requested to be included by the Corporation in such registration (“Corporation Registrable Securities”); and

(3) all Registrable Securities of the same class(es) or series as the KRH Registrable Securities which have been requested to be included by holders of Registrable Securities other than KRH (“Other Holder Registrable Securities”).

(ii) Unlimited Registration Rights. The Corporation shall be required to effect any and all requests by KRH for the registration of Registrable Securities on Form S-1 pursuant to this Section 2(a). 

(iii) Expenses. The Corporation will pay all Registration Expenses in connection with registrations pursuant to this Section 2(a).

(iv) Effective Registration Statement. A registration requested pursuant to this Section 2(a) will not be deemed to have been effected:

(1) unless a registration statement with respect thereto has become effective and remained effective in compliance with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement until the earlier of (x) such time as all of such Registrable

 

 

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Securities have been disposed of in accordance with the intended methods of disposition thereof set forth in such registration statement or (y) 180 days after the effective date of such registration statement, except with respect to any registration statement filed pursuant to Rule 415 under the Securities Act, in which case the Corporation shall use its reasonable best efforts to keep such registration statement effective until such time as all of the Registrable Securities covered thereby cease to be Registrable Securities; provided, however, that if the failure of any such registration statement to become or remain effective in compliance with this Section 2(a)(iv)(1) is due solely to acts or omissions of KRH, such registration
requested pursuant to this Section 2(a) will be deemed to have been effected;

(2) if after it has become effective, the registration statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or authority and is not thereafter effective; or

(3) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by: (A) reason of a failure on the part of KRH; or (B) if the Registrable Securities covered by such registration cannot be sold within a price range acceptable to KRH.

(v) Underwritten Offering. At the election of KRH, a requested registration pursuant to this Section 2(a) may involve an underwritten offering, and, in such case, the investment bankers, underwriters and managers for such registration shall be selected by KRH in consultation with other holders of Registrable Securities being included in such registration pursuant to Section 2(a); provided, however, that such investment bankers, underwriters and managers shall be reasonably satisfactory to the Corporation.

(vi) Priority in Requested Registrations. If a requested registration pursuant to this Section 2(a) involves an underwritten offering and the managing underwriter advises the Corporation in writing that, in its opinion, the number of securities to be included in such registration would be likely to have an adverse effect on the price, timing or distribution of the securities to be offered in such offering as contemplated by KRH (an “Adverse Effect”), then the Corporation shall include in such registration all Registrable Securities that the managing underwriter believes can be sold in such offering without having an Adverse Effect allocated in the following order of priority: (a) first, all KRH Registrable Securities; (b) second, all Corporation Registrable Securities; and (c) third, all Other Holder Registrable Securities. If such managing underwriter advises the Corporation that only a portion of the Registrable Securities in any of clauses (a) through (c) above may be included in such registration without such Adverse Effect, the Corporation shall include the Registrable Securities from the holders of Registrable Securities in such clause on a pro rata basis based on the relative amount 

 

 

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of Registrable Securities then held by each such holder who has requested that securities owned by them be so including in a registration (provided that any such amount thereby allocated to any such holder that exceeds such holder’s request shall be reallocated among the remaining requesting holders in a like manner). Without limiting the foregoing, if the managing underwriter of any underwritten offering shall advise KRH that the Registrable Securities covered by the registration statement cannot be sold in such offering within a price range acceptable to KRH, then KRH may determine that the registration statement should be abandoned or withdrawn, and upon notice thereof to the Corporation, the Corporation shall abandon or withdraw such registration statement. If KRH is not allowed to register all of the
Registrable Securities requested to be included by KRH because of allocations required by this section, KRH shall not be deemed to have exercised a registration for purposes of Section 2(a).

(vii) Postponements in Requested Registrations.

(1) If upon receipt of a registration request, the Corporation shall furnish to KRH a certificate signed by the CEO or any other Senior Officer stating that the Corporation has pending or in process a material transaction (the “Transaction Delay Notice”), the disclosure of which would, in the good faith judgment of the Board, after consultation with its outside counsel, materially and adversely affect such transaction and that the filing of a registration statement would require disclosure of such material transaction within 48 hours of such receipt of such request, the Corporation shall not be required to comply with its obligations under Section 2(a)(i) until 60 days after KRH’s receipt of such notice.

(2) Notwithstanding the foregoing provisions of this Section 2(a)(vii), the Corporation shall be entitled to serve only one Transaction Delay Notice within any period of 365 consecutive days.

(viii) Suspension of Registration Statement. If, at any time when a registration statement effected pursuant to Section 2(a)(i) hereunder relating to Registrable Securities is effective and a prospectus relating thereto is required to be delivered under the Securities Act within the appropriate period mentioned in Section 2(d)(ii) hereunder, the Corporation becomes aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, to the extent that the amendment or supplement to such prospectus are necessary to correct such untrue statement of a material fact or
omission to state a material fact would require disclosure of material information which the Corporation has a bona fide business purpose for preserving as confidential and the Corporation provides KRH written notice thereof promptly after the Corporation makes such determination, KRH shall suspend sales of Registrable Securities pursuant to such registration statement and the Corporation

 

 

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shall not be required to comply with its obligations under Section 2(d)(vi) until the earlier of (a) the date upon which such material information is disclosed to the public or ceases to be material or (b) 60 days after KRH’s receipt of such written notice. If KRH’s disposition of Registrable Securities is discontinued pursuant to the foregoing sentence, unless the Corporation thereafter extends the effectiveness of the registration statement for so long as necessary to permit the dispositions of all Registrable Securities covered thereby, the registration statement shall not be counted for purposes of determining the number of registrations permitted under Section 2(a)(ii) hereof.

(ix) Additional Rights. The Corporation shall not, at any time, grant to any other holders of Shares (or securities that are convertible, exchangeable or exercisable into Shares or other Equity Interests) any rights to request the Corporation to effect the registration under the Securities Act of any such Shares (or any such securities) on terms more favorable to such holders than the terms set forth in this Section 2(a).

(b) Incidental Registrations.

(i) Right to Piggyback. If the Corporation or any other Person that has demand registration rights (a “Third Party Registrant”) at any time after the expiration of any underwriter lock-up period applicable to the IPO proposes to register equity securities under the Securities Act (other than a registration on Form S-4 or S-8, or any successor or other forms promulgated for similar purposes), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale to the public under the Securities Act, the Corporation will, at each such time, give prompt written notice to KRH of its intention to do so and of KRH’s rights under this Agreement. Upon the
written request of KRH made within 15 days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by KRH), the Corporation will use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Corporation has been so requested to register by KRH; provided, however, that (a) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Corporation or such Third Party Registrant shall determine for any reason not to proceed with the proposed registration of the securities to be sold by it, the Corporation may, at its election, give written notice of such
determination to KRH and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such terminated registration (but not from its obligation to pay the Registration Expenses in connection therewith), and (b) if such registration involves an underwritten offering, KRH shall enter into an agreement with the underwriters to sell their Registrable Securities to the underwriters selected by the Corporation or such Third Party Registrant on substantially the same terms and conditions as apply to the Corporation or such Third Party Registrant, with such differences, including any with respect to indemnification and liability insurance, as may be customary or appropriate in combined primary and

 

 

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secondary offerings. Notwithstanding the foregoing, if a registration requested pursuant to this Section 2(b) involves an underwritten public offering, KRH may elect, in writing prior to the effective date of the registration statement filed in connection with such registration, not to register all or any part of its Registrable Securities in connection with such registration. The registrations provided for in this Section 2(b) are in addition to, and not in lieu of, registrations made in accordance with Section 2(a).

(ii) Expenses. The Corporation will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section 2(b).

(iii) Priority in Incidental Registrations. If a registration pursuant to this Section 2(b) involves an underwritten offering and the managing underwriter advises the Corporation in writing that, in its opinion, the number of Registrable Securities requested to be included in such registration would be likely to have an Adverse Effect on such offering, then the Corporation shall include in such registration: (a) first, 100% of the securities which the Corporation or the Third Party Registrant proposes to sell; (b) second, the amount of Registrable Securities which KRH has requested to be included in such registration; and
(c) third, the amount of Registrable Securities which the other holders of Registrable Securities have requested to be included in the registration. If such managing underwriter advises the Corporation that only a portion of such Registrable Securities in any of clauses (b) and (c) may be included in such registration without such Adverse Effect, the Corporation shall include Registrable Securities from the holders of Registrable Securities in such clauses on a pro rata basis based on the relative amount of Registrable Securities then held by each such holder (provided, that any such amount thereby allocated to any such holder that exceeds such holder’s request shall be reallocated among the remaining requesting holders in like manner). 

(c) Mandatory Registration. 

(i) Corporation Registration. On the first Business Day following the one year anniversary of the closing of the IPO, the Corporation shall file with the SEC a resale registration statement on any registration statement form that is available to the Corporation at such time, for the registration under the Securities Act of the resale of all outstanding Registrable Securities held by KRH that have not been previously and then registered. Additionally, the Corporation shall file, within 20 days after the issuance of additional Registrable Securities to KRH, in the future with the SEC a resale registration statement on any registration statement form that is available to the Corporation at such time for the registration under the Securities Act of the resale of such newly issued Registrable Securities.

 

 

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(ii) Expenses. The Corporation will pay all Registration Expenses in connection with the registration of Registrable Securities pursuant to this Section 2(c).

(iii) Effective Registration Statement. The Corporation shall use its reasonable best efforts to cause the registration statement required to be filed pursuant to this Section 2(c) to become effective and remain effective in compliance with the provisions of the Securities Act with respect to the disposition of all Registrable Securities or registration statements with respect to Registrable Securities issued to KRH in the future covered by such registration statement until the earlier of (x) such time as all such Registrable Securities have been disposed of in accordance with the intended methods of disposition thereof set forth in such registration statement or (y) such time as all Registrable Securities held by KRH are eligible to be sold pursuant to Rule 144(d) promulgated under the Securities Act, or any successor provisions thereto.

(d) Registration Procedures. If and whenever the Corporation is required to use its reasonable best efforts to cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, the Corporation will, as expeditiously as possible:

(i) (A) with respect to any registration under Section 2(a), prepare and, in any event within 20 days of the date on which the Corporation first received a request from KRH pursuant to Section 2(a)(i), file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective within 90 days of the initial filing, and (B) with respect to any registration under Section 2(b) and subject to the Corporation’s rights set forth in Section 2(b), use its reasonable best efforts to file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective within 90 days of the initial filing, and (C) with respect to any registration under Section 2(c),
use its reasonable best efforts to file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective within 90 days of the initial filing; provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference) the Corporation will furnish to the holders holding Registrable Securities covered by such registration statement, counsel for the holders of the Registrable Securities being registered and the managing underwriters, if any, copies of all such documents proposed to be filed, which documents will be subject to the review of such holders, such special counsel and such
underwriters, and the Corporation will not file any such registration statement or amendment thereto or any prospectus or any supplement thereto (excluding such documents that, upon filing, will be incorporated or deemed to be incorporated by reference therein) to which the holders of a majority of the

 

 

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Registrable Securities covered by such registration statement or the managing underwriter, if any, shall reasonably object;

(ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective in accordance with Section 2(a) and to comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement; provided, however, that before filing a registration statement or prospectus, or any amendments or supplements thereto in accordance with Section 2(d)(i) or this Section
2(d)(ii), the Corporation will furnish to counsel for the holders of the Registrable Securities being registered copies of all documents proposed to be filed, which documents will be subject to the review of such counsel;

(iii) furnish to each holder of Registrable Securities being registered such number of copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits filed therewith, including any documents incorporated by reference), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities by such holder;

(iv) use its reasonable efforts to register or qualify such Registrable Securities covered by such registration in such jurisdictions as each holder of Registrable Securities being registered shall reasonably request, and do any and all other acts and things which may be reasonably necessary or advisable to enable such holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holder, except that the Corporation shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where, but for the requirements of this Section 2(d)(iv), it would not be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

(v) use its reasonable best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other Governmental Authorities as may be necessary to enable the holders thereof to consummate the disposition of such Registrable Securities;

(vi) notify each holder of any such Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is

 

 

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required to be delivered under the Securities Act, of the Corporation’s becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the request of any such holder, prepare and furnish to such holder a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the holders of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(vii) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC and make available to its security holders, as soon as reasonably practicable (but not more than 18 months) after the effective date of the registration statement, an earnings statement which shall satisfy the provisions of Section 11(a) of the Securities Act;

(viii) use its reasonable best efforts to cause all Registrable Securities covered by such registration statement to be (a) listed on each stock exchange or automated quotation system, if any, on which securities issued by the Corporation of the same class are then listed or, if no such securities issued by the Corporation are then so listed, on the New York Stock Exchange (the “NYSE”) or another nationally stock exchange, if the securities qualify to be so listed or (b) on the Nasdaq Stock Market of the Nasdaq Global Market (“NASDAQ”) or another nationally recognized automated quotation system, if the securities qualify to be so quoted;

(ix) as needed, (a) engage an appropriate transfer agent and provide the transfer agent with printed certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and (b) provide a CUSIP number for the Registrable Securities;

(x) enter into such customary agreements (including an underwriting agreement in customary form), which may include indemnification provisions in favor of underwriters and other Persons in addition to or in substitution for the provisions of Section 2(g) hereof, and take such other actions as holders of a majority of shares of such Registrable Securities or the underwriters, if any, reasonably requested in order to expedite or facilitate the disposition of such Registrable Securities;

(xi) obtain a “cold comfort” letter or letters from the Corporation’s independent public accountants in customary form and covering matters of the type customarily covered by “cold comfort” letters as the holders of a majority of shares of such Registrable Securities shall reasonably request;

 

 

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(xii) make available for inspection by any holder of such Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such holder or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Corporation, and cause all of the Corporation’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement;

(xiii) notify counsel for the holders of Registrable Securities included in such registration statement and the managing underwriter or agent, immediately, and confirm the notice in writing (a) when the registration statement, or any post-effective amendment to the registration statement, shall have become effective, or any supplement to the prospectus or any amendment to the prospectus shall have been filed, (b) of the receipt of any comments from the SEC, (c) of any request of the SEC to amend the registration statement or amend or supplement the prospectus or for additional information, and (d) of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any prospectus, or of the suspension of the qualification of the registration statement for offering or sale
in any jurisdiction, or of the institution or threatening of any proceedings for any of such purposes;

(xiv) make every reasonable effort to prevent the issuance of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any prospectus and, if any such order is issued, to obtain the withdrawal of any such order at the earliest possible moment;

(xv) if requested by the managing underwriter or agent or any holder of Registrable Securities covered by the registration statement, promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or agent or such holder reasonably requests to be included therein, including, with respect to the number of Registrable Securities being sold by such holder to such underwriter or agent, the purchase price being paid therefor by such underwriter or agent and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters incorporated in such prospectus supplement or post-effective amendment;

(xvi) cooperate with the holders of Registrable Securities covered by the registration statement and the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable

 

 

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such securities to be in such denominations and registered in such names as the managing underwriter or agent, if any, or such holders may request;

(xvii) use its reasonable best efforts to obtain for delivery to the holders of Registrable Securities being registered and to the underwriter or agent an opinion or opinions from counsel for the Corporation in customary form and in form, substance and scope reasonably satisfactory to such holders, underwriters or agents and their counsel; and

(xviii) cooperate with each holder of Registrable Securities being registered and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NYSE, NASDAQ or any other stock exchange or automated quotation system and the NASD.

(e) Information Supplied. The Corporation may require each holder of Registrable Securities being registered to furnish the Corporation with such information regarding such holder and pertinent to the disclosure requirements relating to the registration and the distribution of such securities as the Corporation may from time to time reasonably request in writing.

(f) Restrictions on Disposition. KRH agrees that, upon receipt of any notice from the Corporation of the happening of any event of the kind described in Section 2(d)(vi), KRH will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until KRH’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2(d)(vi), and, if so directed by the Corporation, KRH will deliver to the Corporation (at the Corporation’s expense) all copies, other than permanent file copies then in KRH’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Corporation shall give any such notice, the period mentioned in Section
2(a)(iv) shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 2(d)(vi) and to and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 2(d)(vi).

(g) Indemnification.

(i) In the event of any registration of any securities of the Corporation under the Securities Act pursuant to this Section 2, the Corporation shall indemnify and hold harmless the holder of any Registrable Securities covered by such registration statement, each Affiliate of such holder and their respective directors, officers, employees and stockholders or members or general and limited partners (and

 

 

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any director, officer, Affiliate, employee, stockholder and Controlling Person of any of the foregoing), each Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who Controls such holder or any such underwriter within the meaning of the Securities Act (collectively, the “Registration Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, actions or proceedings (whether commenced or threatened) in respect thereof and expenses (including reasonable attorney’s fees and reasonable expenses of investigation) to which such Registration Indemnified Party may become subject under the Securities Act (“Losses”),
state law or otherwise, insofar as such Losses arise out of, relate to or are based upon (a) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or (b) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, or (c) any violation or alleged violation by the Corporation of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; provided, that the Corporation shall not be
liable to any Registration Indemnified Party in any such case to the extent, but only to the extent, that any such Losses or expenses arise out of, relate to or are based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment or supplement thereto or in any such preliminary, final or summary prospectus in reliance upon and in conformity with written information furnished to the Corporation by or on behalf of such holder specifically for use in the preparation thereof; and, provided, further, that the Corporation will not be liable in any such case to the extent, but only to the extent, that the foregoing indemnity with respect to any untrue statement contained in or omitted from a registration statement or the prospectus shall not inure to the benefit
of any party (or any Person Controlling such party) who is obligated to deliver a prospectus in transactions in a security as to which a registration statement has been filed pursuant to the Securities Act and from whom the Person asserting any such Losses purchased any of the Registrable Securities to the extent that it is finally judicially determined that Losses resulted from the fact that such party sold Registrable Securities to a Person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the registration statement or the prospectus, as amended or supplemented, and (x) the Corporation shall have previously and timely furnished sufficient copies of the registration statement or prospectus, as so amended or supplemented if required under the Securities Act, to such party in accordance with this Agreement and (y) the registration statement or prospectus, as so amended or supplemented, would have corrected such untrue
statement or omission of a material fact. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Registration Indemnified Party and shall survive the Transfer of securities by any holder.

 

 

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(ii) The Corporation may require, as a condition to including any Registrable Securities in any registration statement filed in accordance with Sections 2(a), 2(b) or 2(c) herein, that it shall have received an undertaking reasonably satisfactory to it from the selling holder of such Registrable Securities or any underwriter to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 2(g)(i)) the Corporation and all other selling holders or any underwriter, as the case may be, with respect to any untrue statement or alleged untrue statement in or omission or alleged omission from such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Corporation by or on behalf of such selling holder specifically for inclusion in such registration statement, preliminary, final or summary prospectus or amendment or supplement, or a document incorporated by reference into any of the foregoing. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Corporation or any of the selling holders, or any of their respective Affiliates, directors, officers or Controlling Persons and shall survive the Transfer of securities by any holder. In no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the dollar amount of the net proceeds (before taxes) received by such holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(iii) Promptly after receipt by a Registration Indemnified Party hereunder of written notice of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 2(g), such Registration Indemnified Party will, if a claim in respect thereof is to be made against the Corporation, give written notice to the Corporation of the commencement of such action or proceeding; provided, however, that the failure of the Registration Indemnified Party to give notice as provided herein shall not relieve the Corporation of its obligations under this Section 2(g), except to the extent that the Corporation is materially prejudiced by such failure to give notice. In
case any such action or proceeding is brought against a Registration Indemnified Party, unless in such Registration Indemnified Party’s reasonable judgment (after consultation with legal counsel) a bona fide conflict of interest between such Registration Indemnified Party and the Corporation may exist in respect of such action or proceeding, the Corporation will be entitled to participate in and to assume the defense thereof (at its expense) with counsel reasonably satisfactory to such Registration Indemnified Party, and after notice from the Corporation to such Registration Indemnified Party of its election so to assume the defense thereof, the Corporation will not be liable to such Registration Indemnified Party for any legal or other expenses subsequently incurred by the Registration Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided,
however, in the event the Corporation declines or fails to assume the defense of the action or proceeding or to employ counsel reasonably satisfactory to the Registration

 

 

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Indemnified Party, in either case within a 30-day period, or if a court of competent jurisdiction determines that the Corporation is not vigorously defending such action or proceeding, or if there is a bona fide conflict of interest between the Corporation and the Registration Indemnified Party, then such Registration Indemnified Party may employ counsel to represent or defend it in any such action or proceeding and the Corporation shall pay the reasonable fees and disbursements of such counsel or other representative as incurred; provided, further, however, that the Corporation shall not be required to pay the fees and disbursements of more than one counsel for
all Registration Indemnified Parties in any jurisdiction in any single action or proceeding. The Corporation will not settle any such action or proceeding or consent to the entry of any judgment without the prior written consent of the Registration Indemnified Party, unless such settlement or judgment (a) includes as an unconditional term thereof the giving by the claimant or plaintiff of a release to such Registration Indemnified Party from all liability in respect of such action or proceeding and (b) does not involve the imposition of equitable remedies or the imposition of any obligations on such Registration Indemnified Party and does not otherwise adversely affect such Registration Indemnified Party, other than as a result of the imposition of financial obligations for which such Registration Indemnified Party will be indemnified hereunder. No Registration Indemnified Party will settle any such action or proceeding or consent to the entry of any judgment without the
prior written consent of the Corporation (such consent not to be unreasonably withheld).

(iv) (1) If the indemnification provided for in this Section 2(g) from the Corporation is unavailable to a Registration Indemnified Party hereunder in respect of any Losses or expenses referred to herein, then the Corporation, in lieu of indemnifying such Registration Indemnified Party, shall contribute to the amount paid or payable by such Registration Indemnified Party as a result of such Losses or expenses in such proportion as is appropriate to reflect the relative fault of the Corporation and Registration Indemnified Party in connection with the actions or proceedings which resulted in such Losses or expenses, as well as any other relevant equitable considerations. The relative fault of the Corporation and Registration Indemnified Party shall be determined by reference to, among other things, whether any action or proceeding in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the Corporation or Registration Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action or proceeding. The amount paid or payable by a party under this Section 2(g)(iv) as a result of the Losses and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any action or proceeding.

(2) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2(g)(iv) were determined by pro rata allocation or by any other method of allocation which does not take account of the

 

 

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equitable considerations referred to in Section 2(g)(iv)(1). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of similar fraudulent misrepresentation.

(v) Indemnification similar to that specified in this Section 2(g) (with appropriate modifications) shall be given by the Corporation with respect to any required registration or other qualification of securities under any law or with any Governmental Authority other than as required by the Securities Act.

(vi) The obligations of the parties under this Section 2(g) shall be in addition to any liability which any party may otherwise have to any other party and shall survive until the expiration of the applicable statutes of limitations (including any waivers or extensions thereof) with respect to any such registrations made hereunder.

(h) Required Reports. The Corporation covenants that it will timely file the reports required to be filed by it under the Securities Act and the Exchange Act, and it will take such further action as KRH may reasonably request, all to the extent required from time to time to enable KRH to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of KRH, the Corporation will deliver to KRH a written statement as to whether it has complied with such requirements.

(i) Holdback Agreement. If any registration under Sections 2(a), 2(b), or 2(c) hereof or any sale of securities in connection with a registration under Section 2(a) hereof shall be in connection with an underwritten public offering, each holder of Registrable Securities included in such registration agrees not to effect any public sale or distribution, including any sale pursuant to Rule 144, of any Equity Interests of the Corporation (in each case, other than as part of such underwritten public offering), within 30 days before, or 90 days (or such lesser period as the managing underwriters may permit or such longer periods as required by applicable law, provided that in any such case KRH is similarly so released or subject to a longer period pro rata based upon the relative
number of Registrable Securities owned at such time) after, the effective date of any such registration pursuant to Sections 2(a), 2(b) or 2(c) (except as part of any such registration or sale), and the Corporation hereby also so agrees and agrees to cause each other holder of Shares or other Equity Interests purchased from the Corporation (at any time other than in a public offering) to so agree.

(j) Termination of Rights, Except for indemnification rights provided in Section 2(g), which shall be governed in accordance with Section 2(g)(vi), the rights granted to KRH in this Section 2 shall terminate and forthwith become null and void in

 

 

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full on the earliest date on which KRH and its respective Affiliates cease to beneficially own any Shares or other Equity Interests. 

(k) No Inconsistent Agreement. The Corporation shall not enter into, or cause or permit any of its Subsidiaries to enter into, any agreement which conflicts with or limits or prohibits the exercise of the rights granted to KRH in this Section 2.

3. Miscellaneous.

(a) Agreement to Cooperate; Further Assurances. In case at any time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors and KRH and its respective Affiliates shall execute such further documents and shall take such further action as shall be necessary or desirable to carry out the purposes of this Agreement, in each case to the extent not inconsistent with applicable law.

(b) Amendments. Except as otherwise expressly provided in this Agreement, amendments to this Agreement shall require approval of the Corporation and KRH.

(c) Injunctive Relief. The Corporation and KRH acknowledge and agree that a violation of any of the terms of this Agreement may cause KRH and the Corporation, as the case may be, irreparable injury for which an adequate remedy at law is not available. Accordingly, it is agreed that KRH and the Corporation will each be entitled to seek an injunction, restraining order or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, in addition to any other remedy to which they may be entitled at law or, equity. Nothing stated herein shall limit any other remedies provided under this Agreement or available to the parties at law or in equity.

(d) Successors, Assigns and Transferees. The provisions of this Agreement will be binding upon and will inure to the benefit of the parties hereto and their respective successors and Permitted Transferees, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person, including but not limited to any creditor of the Corporation or its Subsidiaries, any right, benefit, or remedy of any nature by reason of this Agreement. An assignment of the rights, interests or obligations hereunder, including but not limited to an assignment by operation of law, shall be null and void unless a provision of this Agreement specifically provides otherwise or the Corporation gives its prior written consent therefor.

(e) Notices. Any written notice required or permitted to be delivered pursuant to this Agreement shall be in writing and shall be deemed delivered: (a) upon

 

 

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delivery if delivered in person; (b) upon transmission if sent via telecopier, with electronic confirmation of receipt; (c) one Business Day after deposit with a nationally recognized courier service, provided that confirmation of such overnight delivery is received by the sender; and (d) upon transmission if sent via e-mail, with a confirmation copy sent via telecopier on the same day with electronic confirmation of receipt. Notices to the Corporation or to KRH shall be delivered to the Corporation or KRH as set forth in Exhibit A, as it may be revised from time to time. Any party may change its address for notices by giving written notice
of the new address to the other parties in accordance with this section, but any element of such party’s address that is not newly provided in such notice shall be deemed not to have changed.

(f) Integration. This Agreement contains the exclusive, entire and final understanding of the parties with respect to the subject matter hereof. There are no agreements, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein. Except as expressly set forth herein, this Agreement supersedes all other prior agreements, discussions, negotiations, communications and understandings between the parties with respect to such subject matter hereof. No party has relied on any statement, representation, warranty, or promise not expressly contained in this Agreement in connection with this transaction.

(g) Severability. If one or more of the provisions, paragraphs, words, clauses, phrases or sentences contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, then such provision, paragraph, word, clause, phrase or sentence shall be deemed restated to reflect the original intention of the parties as nearly as possible in accordance with applicable law and the remainder of this Agreement. The legality and enforceability of any such provision, paragraph, word, clause, phrase or sentence in every other respect and of the remaining provisions, paragraphs, words, clauses, phrases or sentences hereof will not be in any way impaired, it being intended that all obligations, rights, powers and privileges of the Corporation and
KRH will be enforceable to the fullest extent permitted by law. Upon such determination of invalidity, illegality or unenforceability, the Corporation and KRH shall negotiate in good faith to amend this Agreement to effect the original intent of KRH.

(h) Counterparts. This Agreement may be executed in one or more counterparts and by different parties on separate counterparts, each of which will be deemed an original, but all of which will constitute one and the same instrument. The parties agree that this Agreement shall be legally binding upon the electronic transmission, including by facsimile or email, by each party of a signed signature page hereof to the other party.

 

 

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(i) Governing Law; Submission to Jurisdiction

(i) This Agreement is to be construed in accordance with and governed by the internal laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Delaware to the rights and duties of the parties.

(ii) Each party hereto agrees that any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement shall be brought or otherwise commenced exclusively in any state or federal court located in Delaware or in New York, New York. Subject to the preceding sentence, each party thereto:

(1) expressly and irrevocably consents and submits to the jurisdiction of each state and federal court located in New York, New York (and each appellate court located in the State of New York) in connection with any such legal proceeding, including to enforce any settlement, order or award;

(2) consents to service of process in any such proceeding in any manner permitted by the laws of the State of New York, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 3(e) is reasonably calculated to give actual notice;

(3) agrees that each state and federal court located in New York, New York shall be deemed to be a convenient forum;

(4) waives and agrees not to assert (by way of motion, as a defense or otherwise), in any such legal proceeding commenced in any state or federal court located in New York, New York, any claim that such party is not subject personally to the jurisdiction of such court, that such legal proceeding has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court; and

(5) agrees to the entry of an order to enforce any resolution, settlement, order or award made pursuant to this Section 3(i) by the state and federal courts located in New York, New York and in connection therewith hereby waives, and agrees not to assert by way of motion, as a defense, or otherwise, any claim that such resolution, settlement, order or award is inconsistent with or violative of the laws or public policy of the laws of the State of New York or any other jurisdiction.

(iii) In the event of any action or other proceeding relating to this Agreement or the enforcement of any provision of this Agreement, the prevailing party (as determined by the court) shall be entitled to payment by the non-prevailing

 

 

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party of all costs and expenses (including reasonable attorneys’ fees) incurred by the prevailing party, including any costs and expenses incurred in connection with any challenge to the jurisdiction or the convenience or propriety of venue of proceedings before any state or federal court located in New York, New York.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be executed on its behalf as of the date first written above.

 

	
                         
 	
                         
 	
                         
 	
                        RHI ENTERTAINMENT, INC.
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        

                        By: 
 	
                           
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 	
                        Name: 
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 	
  Title: 
 

 

	
                         
 	
                         
 	
                         
 	
                        KRH INVESTMENTS LLC
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        

                        By: 
 	
                           
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 	
                        Name: 
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 

 

 

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Exhibit 10.2

Exhibit A

Members

 

	
                        Corporation:
 	
                         
 	
                        KRH:
 
	
                        RHI Entertainment, Inc.
 1325 Avenue of the Americas, 21st Floor
 New York, New York 10019
 Attention: General Counsel
 	
                         
 	
                        KRH Investments LLC
 c/o Kelso & Company
 320 Park Avenue, 24th Floor
 New York, New York 10022
 Attention: General Counsel
 
	
                        Fax: (212) 977-3917
 	
                         
 	
                        Fax: (212) 223-2379
 
	
                        with a copy to:
 Raymond Y. Lin, Esq. 
 Latham & Watkins LLP 
 885 Third Avenue 
 New York, New York 10022 
 (212) 906-1200
 Fax: 212-751-4864
 	
                         
 	
                        with a copy to:
 Raymond Y. Lin, Esq. 
 Latham & Watkins LLP 
 885 Third Avenue 
 New York, New York 10022 
 (212) 906-1200
 Fax: 212-751-4864Exhibit 10.10 

Execution Copy

Employment Agreement

This Employment Agreement (the “Agreement”), entered into on January 15, 2008, and effective as of the Effective Date (as defined in Section 2(b)), is made by and between RHI Entertainment, LLC (together with any predecessor or successor thereto, the “Company”) and Henry S. Hoberman (the “Executive”).

RECITALS

A. The Company desires to assure itself of the services of the Executive by engaging the Executive to perform services under the terms hereof.

B. The Executive desires to provide services to the Company on the terms herein provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows:

1. Certain Definitions

(a) “Annual Base Salary” shall have the meaning set forth in Section 3(a).

(b) “Board” shall mean the Board of Directors of the Company.

(c) The Company shall have “Cause” to terminate the Executive’s employment hereunder upon: (i) the Executive’s conviction of, or plea of nolo contendere to, any felony (or any other crime having a material adverse effect on the Company); (ii) the Executive’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s premises or while performing the Executive’s duties and responsibilities under this Agreement; or (iii) the Executive’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company.

(d) “Change in Control” shall mean a change in ownership or control of the Company effected through a transaction or series of transactions (other than an offering of common stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries, a Principal Stockholder or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company or a Principal Stockholder) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; provided, that the transaction or event described in this subsection constitutes a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).

 

 

(e) “Common Stock” shall mean the shares of common stock of RHI Entertainment, Inc., a Delaware corporation, par value $0.01.

(f) “Company” shall, except as otherwise provided by Section 6(h), have the meaning set forth in the preamble hereto.

(g) “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death; (ii) if the Executive’s employment is terminated due to his Disability, the date determined pursuant to Section 4(a)(ii); or (iii) if the Executive’s employment is terminated pursuant to Section 4(a)(iii)-(vi) either the date indicated in the Notice of Termination or the date specified by the Company pursuant to Section 4(b), whichever is earlier.

(h) “Disability” shall mean the Executive’s incapacity due to reasonably documented physical or mental illness that shall have prevented the Executive from performing his duties for the Company on a full-time basis for more than six months.

(i) “Effective Date” shall have the meaning set forth in Section 2(b). 

(j) “Executive” shall have the meaning set forth in the preamble hereto.

(k) The Executive shall have “Good Reason” to resign his employment during the period of two years which follows the occurrence (without the Executive’s prior written consent) of any of the following: (i) failure of the Company to make any material payment under this Agreement; (ii) the Company’s material breach of this Agreement, including, without limitation, a diminution in title or responsibilities under Section 2(c) below; (iii) Executive no longer reports directly to the Chief Executive Officer of RHI Entertainment Holdings, LLC; or (iv) relocation of the Company’s principal office from the New York metropolitan area; provided, however, that the Executive may not resign his employment for
Good Reason unless: (A) the Executive has provided the Company with at least 30 days prior written notice of his intent to resign for Good Reason (which notice must be provided within 90 days following the occurrence of the event(s) purported to constitute Good Reason); and (B) the Company has not remedied the alleged violation(s) within the 30-day period.

(1) “LLC Agreement” shall mean that certain Amended and Restated Limited Liability Company Agreement of RHI Entertainment Holdings, LLC, a Delaware limited liability company, dated as of January 12, 2006.

(m) “Notice of Termination” shall have the meaning set forth in Section 4(b).

(n) “Principal Stockholders” shall mean (i) Kelso Interco VII, LLC and KEP VI AIV, LLC (the “Kelso Stockholders”), (ii) any general or limited partner or member of any Kelso Stockholder (a “Kelso Partner”), (iii) any corporation, partnership, limited liability company or other entity that is an affiliate of any Kelso Stockholder or Kelso Partner (including without limitation any applicable coinvest vehicle established following the date hereof) (collectively, the “Kelso Affiliates”), (iv) any managing director, member, general partner, director, limited partner, officer or employee of (A) any Kelso Stockholder, (B) any Kelso

 

 

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Partner or (C) any Kelso Affiliate, or the heirs, executors, administrators, testamentary trustees, legatees or beneficiaries of any of the foregoing persons referred to in this clause (iv) (collectively, the “Kelso Associates”), (v) any trust, the beneficiaries of which, or corporation, limited liability company or partnership, the stockholders, members or general or limited partners of which, include only Kelso Stockholders, Kelso Partners, Kelso Affiliates, Kelso Associates, their spouses or their lineal descendants; and (vi) a voting trustee for one or more Kelso Stockholders, Kelso Affiliates, Kelso Partners or Kelso Associates; provided that in no event shall the Company or any subsidiary be considered a Kelso Partner, Kelso Affiliate, or Kelso Associate and provided, further, that an underwriter or other similar intermediary engaged by the Company in an offering of the
Company’s debt or equity securities or other instruments shall not be deemed a Principal Stockholder with respect to such engagement.

(o) “Public Offering” means any underwritten public offering of the Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.

(p) “Section 409A” shall have the meaning set forth in Section 20.

(q) “Term” shall have the meaning set forth in Section 2(b). 

2. Employment

(a) In General. The Company shall employ the Executive and the Executive shall enter the employ of the Company, for the period set forth in Section 2(b), in the position set forth in Section 2(c), and upon the other terms and conditions herein provided.

(b) Term of Employment. The initial term of employment under this Agreement (the “Initial Term”) shall be for the period beginning on February 25, 2008 (the “Effective Date”) and ending on the third anniversary thereof, unless earlier terminated as provided in Section 4. The employment term hereunder shall automatically be extended for successive one-year periods (“Extension Terms” and, collectively with the Initial Term, the “Term”) unless either
party gives notice of non-extension to the other no later than 30 days prior to the expiration of the then-applicable Term.

(c) Position and Duties. During the Term, the Executive: (i) shall serve as Executive Vice President and General Counsel of RHI Entertainment Holdings, LLC, with responsibilities, duties and authority customary for such position, subject to direction by the Chief Executive Officer of RHI Entertainment Holdings, LLC and the Board; (ii) shall report directly to the Chief Executive Officer of RHI Entertainment Holdings, LLC; (iii) shall devote substantially all his working time and efforts to the business and affairs of the Company and its subsidiaries; and (iv) agrees to observe and comply with the Company’s rules and policies as adopted by the Board from time to time. For the avoidance of doubt: (x) the Executive’s position of Executive Vice President and General Counsel of RHI Entertainment
Holdings, LLC shall be the chief legal officer at RHI Entertainment Holdings, LLC, and (y) the Human Resources Department of the Company shall report to the Executive.

 

 

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 (d) Place of Performance. In connection with his employment during the Term, the Executive shall be based at the Company’s offices in New York, New York, except for necessary travel on the Company’s business.

3. Compensation and Related Matters

(a) Annual Base Salary. For the period beginning on the Effective Date and ending on the first anniversary of the Effective Date, the Executive shall receive a base salary (the “Annual Base Salary”) at a rate of $650,000 per annum. For the period beginning on first anniversary of the Effective Date and ending on the second anniversary of the Effective Date, the Executive shall receive an Annual Base Salary at a rate of $725,000 per annum. For the period beginning on the second anniversary of the Effective Date and ending on the third anniversary of the Effective Date, the Executive shall receive an Annual Base Salary at a rate of $800,000 per annum. The Annual Base Salary shall be payable in accordance with the
customary payroll practices of the Company.

(b) Signing Bonus. As soon as reasonably practicable following (but in any event within 30 days of) the Effective Date, the Company shall pay the Executive a one-time lump sum cash payment in the amount of $300,000.

(c) Benefits. The Executive shall be entitled to participate in employee benefit plans, programs and arrangements of the Company now (or, to the extent determined by the Board, hereafter) in effect which are applicable to the senior officers of the Company.

(d) Vacation. During the Term, the Executive shall be entitled to not less than four weeks paid vacation in accordance with the Company’s applicable policies and procedures.

(e) Expenses. The Company shall reimburse the Executive for all reasonable travel and other business expenses incurred by him in the performance of his duties to the Company in accordance with the Company’s applicable expense reimbursement policies (including, without limitation, monthly parking expenses).

(f) Profits Interest Award.

(i) The Executive shall be awarded 15 Value Units (as defined in the LLC Agreement) of the Company pursuant to the terms and conditions described on Exhibit A hereto upon the earliest of (A) if the Company has consummated a Public Offering prior to the Effective Date, the Effective Date; (B) the time after the Effective Date at which the Company consummates a Public Offering; (C) the three month anniversary of the Effective Date; or (D) an earlier time at the Company’s sole discretion.

(ii) The Value Units shall become vested in three cumulative installments, with 331/3% vesting on each of (A) the first anniversary of the Effective Date; (B) the second anniversary of the Effective Date; and (C) the date that is five days prior to the third anniversary of the Effective Date; provided that in each case that the Executive remains continuously employed or in the service of RHI Entertainment Holdings, LLC, the Company or one of its subsidiaries from the date of grant through such date.

 

 

4

 

(iii) Any portion of the Value Units which has not vested as of the date the Executive ceases to be an employee of RHI Entertainment Holdings, LLC, the Company or one of its subsidiaries shall be forfeited upon the Date of Termination without any further action by the Company. Notwithstanding anything to the contrary in this Agreement or the LLC Agreement: (A) in the event of any termination of the Executive’s employment by the Company without Cause or due to the Executive’s voluntary resignation for Good Reason the Value Units shall continue to become vested in accordance with their terms on each vesting date described in Section 3(f)(ii) as if the Executive had remained employed with the Company through such date; and (B) as of each vesting date described in Section 3(f)(ii), each Value Unit that becomes vested on such date pursuant to Section
3(f)(ii) shall be fully vested (but shall only be entitled to participate in distributions in accordance with the terms and conditions of the LLC Agreement) and shall no longer be subject to the forfeiture provisions of the Employment Agreement or LLC Agreement.

(g) Discretionary Bonuses. The Board, in its sole discretion, may award the Executive additional annual or other bonuses during the Term.

(h) Additional Bonus

(i) Grant of Restricted Stock Upon a Public Offering. If, anytime prior to the three month anniversary of the Effective Date, the Company consummates a Public Offering, then:

(A) As soon as reasonably practical (but in any event within 30 days) of the later of (1) the date of the consummation of the Public Offering or (2) the Effective Date, the Company shall award to the Executive restricted shares of Common Stock with a fair market value of $1.0 million as of the date of award (the “Restricted Shares”) pursuant to the Company’s 2007 Incentive Award Plan (the “Plan”). The award of Restricted Shares described in this Section 3(h) shall be evidenced by a written award agreement (“Award Agreement”) entered into pursuant to the Plan and shall be subject to the terms of
the Award Agreement and the Plan.

(B) (1) The Restricted Shares shall be vested with respect to 25% of the Restricted Shares immediately upon the award thereof. (2) Subject to subsections (C) and (D) below, the balance of 75% of the Restricted Shares shall vest and the Restrictions (as defined below) shall lapse with respect to 25% of the Restricted Shares upon (x) each of the first and second anniversaries of the Effective Date; and (y) the date that is five days prior to the third anniversary of the Effective Date; provided that in each case that the Executive remains continuously employed or in the service of RHI Entertainment Holdings, LLC, the Company or one of its subsidiaries from the date of grant through such date. To the extent the Executive is required to pay any income or other taxes in

 

 

5

 

connection with the grant and vesting of the Restricted Shares pursuant to subsection (1) only of this Section 3(h)(i)(B), the Company shall pay to the Executive, an additional “gross-up” payment sufficient to place the Executive in the same after-tax position as he would have been had he not been taxed on the award of the vested Restricted Shares described in Section 3(h)(i)(B)(l).

(C) Any portion of the Restricted Shares which has not vested as of the date the Executive ceases to be an employee of RHI Entertainment Holdings, LLC, the Company or one of its subsidiaries shall thereupon be forfeited immediately and without any further action by the Company. For purposes of this Agreement, “Restrictions” shall mean the restrictions on sale or other transfer pursuant to the Plan and the Award Agreement and the exposure to forfeiture described in the immediately preceding sentence.

(D) Notwithstanding anything to the contrary in subsections (B) and (C), the Restricted Shares shall become fully vested and all Restrictions shall lapse in the event of the Executive’s termination of employment by the Company without Cause or due to voluntary resignation by the Executive for Good Reason.

(ii) Cash Bonus

(A) In the event that prior to the three month anniversary of the Effective Date, the Company does not consummate a Public Offering, then the Company shall pay to the Executive a cash bonus (the “Cash Bonus”) in the amount of: (1) $333,333.33 on the first anniversary of the Effective Date; (2) $333,333.33 on the second anniversary of the Effective Date; and (3) $333,333.34 on the third anniversary of the Effective Date; provided that in each case that the Executive remains continuously employed or in the service of RHI Entertainment Holdings, LLC, the Company or one of its subsidiaries from the Effective Date through such date. To the extent the Company pays a Cash Bonus pursuant to subsection (1) only of this Section 3(h)(ii)(A), the Company shall pay to the Executive an additional
“gross-up” payment with respect to $250,000 of the $333,333.33 payable pursuant to such Cash Bonus sufficient to place the Executive in the same after-tax position as he would have been had he not been taxed on the payment of such $250,000.

(B) Notwithstanding anything to the contrary in subsection (A) and subject to Section 5(c), in the event of (1) the Executive’s termination of employment by the Company without Cause; (2) the Executive’s voluntary resignation for Good Reason; or (3) the consummation of a Change in Control (provided that the Executive remains continuously employed or in the service of RHI Entertainment Holdings, LLC through such Change of Control), any amount of the Cash Bonus not theretofore paid to the Executive shall become payable upon the occurrence of such event.

 

 

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(C) In the event that the Company consummates a Public Offering at any time after the dates described in Section 3(h)(ii)(A) and the Executive becomes entitled to receive a portion of the of the Cash Bonus, the Executive may elect to receive such portion of the Cash Bonus in the form of Common Stock with a fair market value as of the applicable date equal to the amount payable to him pursuant to Section 3(h)(ii)(A) or (B) (as applicable).

4. Termination. The Executive’s employment hereunder may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances:

(a) Circumstances

(i) Death. The Executive’s employment hereunder shall terminate upon his death.

(ii) Disability. If the Executive incurs a Disability, the Company may give the Executive written notice of its intention to terminate the Executive’s employment. In that event, the Executive’s employment with the Company shall terminate effective on the latest of the 30th  day after receipt of such notice by the Executive or the date specified in such notice, provided that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his duties.

(iii) Termination by the Company for Cause. The Company may terminate the Executive’s employment for Cause.

(iv) Termination by the Company without Cause. The Company may terminate the Executive’s employment without Cause.

(v) Resignation by the Executive for Good Reason. The Executive may resign his employment with the Company for Good Reason.

(vi) Resignation by the Executive without Good Reason. The Executive may resign his employment with the Company without Good Reason.

(b) Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive under this Section 4 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto indicating (i) the specific termination provision in this Agreement relied upon, (ii) except with respect to a termination pursuant to Section 4(a)(iv) or 4(a)(vi), setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by the Executive (or, in the case of a termination described in Section 4(a)(ii), by the Company), shall be at least 30 days following the date of such
notice (a “Notice of Termination”); provided, however, that a Notice of Termination delivered by the Company pursuant to Section 4(a)(ii) shall not be required to specify a Date of Termination, in which case the Date of Termination shall be determined pursuant to Section 4(a)(ii); and provided, further, that in the event that the Executive delivers a Notice of Termination to the Company, the Company may, in its sole discretion, change the Date of Termination to any date that occurs during the period beginning

 

 

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on the date of Company’s receipt of such Notice of Termination and ending on the date specified in such Notice of Termination. A Notice of Termination submitted by the Company may provide for a Date of Termination on the date the Executive receives the Notice of Termination, or any date within 45 days thereafter. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

5. Company Obligations Upon Termination of Employment

(a) In General. Upon a termination of the Executive’s employment for any reason, the Executive (or the Executive’s estate) shall be entitled to receive the sum of the Executive’s Annual Base Salary through the Date of Termination not theretofore paid; any expenses owed to the Executive under Section 3(e); any accrued vacation pay owed to the Executive pursuant to Section 3(d); and any amount arising from the Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 3(c), which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements.

(b) Termination without Cause or due to Resignation for Good Reason. If the Executive’s employment shall be terminated by the Company without Cause or by the Executive for Good Reason (but not by reason of the Executive’s death, Disability, termination by the Company for Cause or termination by the Executive without Good Reason), then, in addition to the payments described in Section 5(a), beginning with the first payroll period following the 30th day following the Date of Termination, the Company shall:

(i) Continue to pay to the Executive, in accordance with the Company’s regular payroll practice following the Date of Termination, the Executive’s Annual Base Salary until the earlier of (A) the second anniversary of the Date of Termination or (B) the date the Executive first violates any of the restrictive covenants set forth in Section 6, provided however, that the initial payment shall include Base Salary amounts for all payroll periods from the Date of Termination through the date of such initial payment;

(ii) Continue coverage for the Executive and any eligible dependents under all Company group health benefit plans in which the Executive and any dependents were entitled to participate immediately prior to the Date of Termination, to the extent permitted thereunder and subject to any cost-sharing or similar provisions in effect thereunder as of the Date of Termination, until earlier of (A) the second anniversary of the Date of Termination or (B) the date the Executive first violates any of the restrictive covenants set forth in Section 6. As of the date that the Executive ceases to receive coverage under any group health plan pursuant to this Section 5(b)(ii), the Executive shall be eligible to elect to receive “COBRA” continuation coverage to the extent permitted by Section 601 et seq. of
the Executive Retirement Income Security Act of 1974, as amended. If such benefits cannot be provided under the Company’s group health benefit plans, such benefits will be provided on an individual basis to the Executive such that his after-tax costs will be no greater than the costs for such benefits under the Company’s plans; and

 

 

8

 

(iii) Pay to the Executive any Cash Bonus amounts payable under Section 3(h)(ii) (if applicable).

(c) Section 409A. Notwithstanding any provision to the contrary in this Agreement: (i) no amount shall be payable pursuant to Section 5(b) unless the Executive’s termination of employment constitutes a “separation from service” within the meaning of Section 1.409A-l(h) of the Department of Treasury Regulations and unless, on or prior to the 30th  day following the Date of Termination (A) the Executive executes a waiver and release of claims agreement in the Company’s customary form and (B) such waiver and release of claims agreement shall not have been revoked by the Executive prior to such 30th  day; and (ii) if the Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the termination benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Company (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (B) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 5(c)(ii) shall be paid in a lump sum (including interest on payments which have been subject to delayed commencement pursuant to this Section 5(c)) to the Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein. For purposes of Section 409A
of the Code, the Executive’s right to receive installment payments pursuant to Section 5(b) shall be treated as a right to receive a series of separate and distinct payments. The reimbursement of any expense under Sections 3(b) or 5(b) shall be made no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his separation from service shall made by the Company in accordance with the terms of Section 409 A of the Code and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-l(i) and any successor provision thereto).

(d) Termination due to Death or Disability. If the Executive’s employment with the Company is terminated by reason of his death or Disability, then the Executive or, as applicable, his estate or other legal representative, shall be entitled to receive the amounts described in Section 5(a), including any amount arising from the Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements described in Section 3(c) (including without limitation any disability or life insurance benefit plans, programs or arrangements), which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements.

6. Restrictive Covenants.

(a) Confidentiality. The Executive agrees that he will not during the Term or thereafter divulge to anyone (other than the Company or any persons designated by the Company) any knowledge or information of any type whatsoever of a confidential nature relating to the business of the Company, including, without limitation, all types of trade secrets,

 

 

9

 

 

business strategies, marketing and distribution plans as well as ideas, proposals, plans, scripts, treatments and formats described in Section 6(b) below. The Executive further agrees that he will not disclose, publish or make use of any such knowledge or information of a confidential nature (other than in the performance of the Executive’s duties hereunder) without the prior written consent of the Company. This provision does not apply to information which becomes available publicly without the fault of the Executive or information which the Executive is required to disclose in legal proceedings, provided the Executive gives advance written notice to the Board and an opportunity for the Company to resist such disclosure.

(b) Intellectual Property. During the Term, the Executive will disclose to the Company all ideas, proposals, plans, scripts, treatments, and formats invented or developed by the Executive which relate directly or indirectly to the business of the Company or any of its subsidiaries or affiliates including, without limitation, any ideas, proposals and plans which may be copyrightable, trademarkable, patentable or otherwise exploitable. The Executive agrees that all such ideas, proposals, plans, scripts, treatments, and formats are and will be the property of the Company. The Executive further agrees, at the Company’s request, to do whatever is necessary or desirable to secure for the Company the rights to said ideas, proposals, plans, scripts, treatments, and formats, whether by copyright,
trademark, patent or otherwise and to assign, transfer and convey the rights thereto to the Company.

(c) Name and Likeness. The Company shall have the right in perpetuity to use the Executive’s name, image, and likeness in connection with credits, advertising and publicity for product for which the Executive performs any development and/or production services, and during the Term otherwise in connection with the Company and its business.

(d) Competitive Business Restrictions. During the Term, the Executive shall not engage directly or indirectly, whether as an employee, independent contractor, consultant, partner, shareholder or otherwise, in a business or other endeavor which would or might interfere with any of his duties or obligations hereunder or which is competitive with or similar to the business of the Company or any of its subsidiaries or affiliates, including but not limited to any business related to the production, distribution or other exploitation of made for television movies or miniseries or the ownership, management, production, distribution or any other exploitation of any other audiovisual or theatrical materials. Notwithstanding the foregoing, the Executive shall have the right to own up to five percent (5%) of
the shares of any publicly traded company in the entertainment business.

(e) Non-Solicitation. The Executive further agrees that during the Term and for a period of two years thereafter, the Executive will not employ or attempt to employ or assist anyone else to employ any person who is, as of the Date of Termination, working as an officer, policymaker or in creative development (including without limitation executive employees) for or rendering services as such to the Company (e.g., this prohibition does not apply to anyone who is a short term employee engaged by the Company specifically to work on the development or production of a particular motion picture, television or other audiovisual property).

(f) Non-Compete. In consideration of the Company’s agreements herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Executive agrees, in addition to any other obligation imposed by this Section 6,

 

 

10

 

that he will not, during the period beginning on the Date of Termination and ending on the second anniversary thereof (the “Non-Compete Period”), engage directly or indirectly, whether as an employee, independent contractor, consultant, partner, shareholder or otherwise, in a business or other endeavor which is competitive with or similar to any business of the Company (including without limitation any business related to the production, distribution or other exploitation of made for television movies or miniseries), or any business which as of the Date of Termination is contemplated by the Company and has been formally considered by the Board at a meeting (any such business or endeavor, a “Competitive Business”),
anywhere in the world. Notwithstanding the foregoing, at any time during the Non-Compete Period the Executive may request in writing to the Board that the Board consent to the Executive’s direct or indirect engagement in, ownership of equity interest in, or management or operation of (whether as a director, officer, employee, agent, representative, security holder, consultant or otherwise) any Competitive Business which derives less than 10% of its aggregate annual revenues from the production, distribution or other exploitation of made for television movies or miniseries, which request the Board shall consider in good faith based upon the Board’s determination of the potential impact of the Executive’s involvement in such Competitive Business on the Company and its stockholders. The Executive specifically acknowledges that he is of special, unique and extraordinary value to the Company and that as a key executive of the Company, he has access to all confidential
information, trade secrets, and the like, of the Company, that he has independent means of supporting himself and his family; and that in view of the foregoing, the restrictions imposed by this Section 6(f) are reasonably necessary to protect the Company against unfair competition by the Executive and are not unduly burdensome to the Executive. In addition, notwithstanding any provision of Section 6(d) or 6(f) to the contrary, the restrictions on the Executive under Section 6(d) and/or 6(f) shall terminate upon the 60th  day following the Company’s filing for relief under Chapter 7 of the United States Bankruptcy Code (provided that such Chapter 7 case is not converted into a Chapter 11 case under the United States Bankruptcy Code within the 60 day period following the Company’s Chapter 7 filing). The parties acknowledge and agree that if the Chapter 7 case described in the preceding sentence is timely converted into a Chapter 11 case but the Company is nevertheless
liquidated rather than reorganized, then the restrictions on the Executive under Section 6(d) and/or 6(f) shall terminate upon the effective date of a liquidating plan of reorganization under Chapter 11. For the avoidance of doubt, in no event shall the Company’s filing for relief under Chapter 7 of the United States Bankruptcy Code (whether or not converted into a Chapter 11 case) cause the Non-Compete Period to extend beyond the second anniversary of the Date of Termination. Furthermore, notwithstanding any other provision of this Section 6(f), if the Company fails to make any payment to the Executive pursuant to Section 5(b)(i) (other than in accordance with Section 5(b)(i)(B) due to the Executive’s violation of any restrictive covenant set forth in this Section 6) and the Executive notifies the Company of such failure in accordance with the notice provisions set forth in Section 10, then the Non-Compete Period shall expire after the third business day following the date
the Company receives such notice from the Executive, but only if the Company has not cured the failure during the three-business day period following the Company’s receipt of such notice.

(g) Non-Disparagement. The Executive agrees not to disparage the Company, any of its products or practices, or any of its directors, officers, agents, representatives, stockholders or affiliates, either orally or in writing, at any time.

 

 

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(h) Interpretation. In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. As used in this Section 6, the term “Company” shall include the Company, its parent, related entities, and any of its
direct or indirect subsidiaries or affiliates.

7. Injunctive Relief. The Executive recognizes and acknowledges that a breach of the covenants contained in Section 6 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that in the event of a breach of any of the covenants contained in Section 6, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief.

8. Assignment and Successors. The Company may assign its rights and obligations under this Agreement to any entity which is a successor to all or substantially all the assets of the Company, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its affiliates. The Executive may not assign his rights or obligations under this Agreement to any individual or entity. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.

9. Governing Law. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of New York, without reference to the principles of conflicts of law of New York or any other jurisdiction, and where applicable, the laws of the United States.

10. Notices. Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage prepaid, to the following address (or at any other address as any party shall have specified by notice in writing to the other party):

	
                         
 	
                        (a)
 	
                        If to the Company:
 

RHI Entertainment, LLC

1325 Avenue of the Americas

New York, NY 10019 

Attn: General Counsel 

Fax Number: (212) 977-3917

 

 

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with a copy to:

Kelso & Company

320 Park Avenue

New York, NY 10022

Attn: James Connors, General Counsel

Fax Number: (212) 751-3939

and a copy to:

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022-4802

Attn: Bradd L. Williamson

Fax Number: (212) 751-4864

	
                         
 	
                        (b)
 	
                        If to the Executive, at the address set forth on the signature page hereto
 

with a copy to:

Reed Smith LLP 

599 Lexington Avenue 

New York, NY 10022 

Attn: David Weissman 

Fax Number: (212) 521-5450

11. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

12. Entire Agreement. The terms of this Agreement (together with any other agreements and instruments contemplated hereby or referred to herein) are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. This Agreement shall supersede all undertakings or agreements, whether written or oral, previously entered into by the Executive and the Company or any predecessor thereto or affiliate thereof with respect to the employment of the Executive by the Company. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

13. Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and the Chairman of the Board (or his delegate). By an instrument in writing similarly executed, the Executive or the Chairman of the Board (or his delegate) may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

 

 

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14. No Inconsistent Actions. The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

15. Construction. This Agreement shall be deemed drafted equally by both the parties. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural; (b) “or” is used both conjunctively and disjunctively; (c)
“any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d) “includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require.

16. Enforcement. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

17. Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

18. Employee Acknowledgement. The Executive acknowledges that he has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on his own judgment.

19. Survival. The expiration or termination of the Term shall not impair the rights or obligations of any party hereto, which shall have accrued prior to such expiration or termination.

 

 

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20. Section 409A. The parties acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and the parties agree to use their best efforts to achieve timely compliance with, Section 409A of the Internal Revenue Code of 1986, as amended, and the Department of Treasury Regulations and other interpretive guidance issued thereunder (“Section 409A”), including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that any compensation or benefits payable or
provided under this Agreement may be subject to Section 409A, the Company may adopt such limited amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company reasonably determines are necessary or appropriate to (a) exempt the compensation and benefits payable under this Agreement from Section 409A and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (b) comply with the requirements of Section 409A.

[signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

 

	
                         
 	
                         
 	
                        COMPANY
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                        /s/ [ILLEGIBLE]  
 
	
                         
 	
                         
 	
                        Its:
 	
                         
 

 

	
                         
 	
                         
 	
                        EXECUTIVE
 
	
                          
 	
                         
 	
                        By: 
 	
                        
 /s/ Henry S. Hoberman
 
	
                         
 	
                         
 	
                         
 	
                        Henry S. Hoberman
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        Residence Address: 
 9 Patton Crescent 
 Closter, NJ 07624
 

 

 

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