Exhibit 10.1 RHI ENTERTAINMENT HOLDINGS II, LLC AMENDED AND RESTATED
LIMITED LIABILITY COMPANY OPERATING AGREEMENT DATED AS OF JUNE 23, 2008
TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS 1 1.1 Defined Terms 1 1.2 Other Definitional Provisions; Interpretation 15 ARTICLE 2 FORMATION 16 2.1 Formation; Qualification 16 2.2 Name 16 2.3 Term 16 2.4 Headquarters Office 17 2.5 Registered Agent and Office 17 2.6 Purposes 17 2.7 Powers 17 ARTICLE 3 MEMBERS AND INTERESTS 17 3.1 Members 17 3.2 Meeting of Members 18 3.3 Certain Duties and Obligations of the Members 19 3.4 Units 20 3.5 Authorization and Issuance of Additional Units 21 3.6 Business Opportunities; Non-Competition 22 ARTICLE 4 MANAGEMENT AND OPERATIONS 22 4.1 Manager 22 4.2 Management Authority 22 4.3 Limitations on the Business of the Manager; Approval Rights of KRH 23 4.4 Duties 27 4.5 Reliance by Third Parties 27 4.6 Resignation 27 4.7 Removal 27 4.8 Vacancies 27 4.9 Information Relating to the Company 27 4.10 Insurance 27 4.11 Transactions Between Company and Manager 27 4.12 Officers 27 4.13 Management Fee; Reimbursement of Expenses 28 4.14 Limitation of Liability; Exculpation 28 4.15 Indemnification 29 4.16 Title to Assets 30 ARTICLE 5 CAPITAL CONTRIBUTIONS; DISTRIBUTIONS 30 5.1 Capital Contributions 30 5.2 Loans from Members 31
Page 5.3 Loans from Third Parties 31 5.4 Distributions 31 5.5 Valuation 32 ARTICLE 6 BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS; ALLOCATIONS 33 6.1 General Accounting Matters 33 6.2 Certain Tax Matters 34 6.3 Allocations 34 6.4 Allocations of Net Income and Net Losses for Federal Income Tax Purposes 36 6.5 Elections 36 6.6 Tax Year 37 6.7 Withholding Requirements 37 6.8 Reports to Members 37 6.9 Auditors 38 6.10 Transfers During Year 38 6.11 Code Section 754 Election 38 ARTICLE 7 DISSOLUTION 38 7.1 Dissolution 38 7.2 Winding-Up 39 7.3 Final Distribution 39 ARTICLE 8 TRANSFER; SUBSTITUTION; ADJUSTMENTS 40 8.1 Restrictions on Transfer 40 8.2 Substituted Members 41 8.3 Effect of Void Transfers 42 ARTICLE 9 EXCHANGE RIGHT OF MEMBER 42 9.1 Exchange Right of a Member 42 9.2 Effect of Exercise of Exchange Right 43 ARTICLE 10 MISCELLANEOUS 44 10.1 Agreement to Cooperate; Further Assurances 44 10.2 Amendments 44 10.3 Confidentiality 44 10.4 Injunctive Relief 45 10.5 Successors, Assigns and Transferees 45 10.6 Notices 45 10.7 Integration 46 10.8 Severability 46 10.9 Counterparts 46 10.10 Governing Law; Submission to Jurisdiction 46 Exhibit A Members and Units 1
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Page Exhibit B Form of Membership Unit Certificate 1
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AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
RHI ENTERTAINMENT HOLDINGS II, LLC This Amended and Restated Limited Liability Company Operating Agreement (this " Agreement" ) of RHI Entertainment Holdings II, LLC, a
Delaware limited liability company (the " Company" ), is made and entered into as of June 23, 2008, by and among each of the parties hereto and amends and restates in full that certain Limited Liability Company Agreement of RHI Entertainment Holdings II, LLC, dated as of September 6, 2007. RECITALS A. WHEREAS , On September 6, 2007, RHI Entertainment, Inc. (" RHI Inc." ), a Delaware corporation, formed the Company. RHI Inc. became the sole Member and Manager of the Company. B. WHEREAS , On June 18, 2008, RHI Entertainment Holdings, LLC changed its name to KRH Investments LLC (" KRH" ). C. WHEREAS , The Company, RHI Inc. and KRH have entered into a Membership Unit Subscription Agreement, dated as of June 23, 2008 (the " Subscription Agreement" ), pursuant to which the Company has agreed to issue Membership Units to RHI Inc. in exchange for the proceeds received from RHI Inc.' s Initial Public Offering and to issue Membership Units to KRH in exchange for the contribution of its interests in RHI Entertainment LLC, a Delaware limited liability company. D. WHEREAS , The respective board of directors of each of RHI Inc. and KRH have approved this Agreement. NOW, THEREFORE, The Members hereby duly adopt this Agreement pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. a7 18-101 et seq .), as amended from time to time (the " LLC Act" ), and hereby agree as follows: ARTICLE 1 DEFINITIONS 1.1 Defined Terms . The following terms shall have the following meanings in this Agreement: " Additional Contribution Amount" has the meaning set forth in Section 3.4(d). " Additional Equity Issuance" means the issuance by RHI Inc. of any Equity Interests in RHI Inc.
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" Adjusted Capital Account Balance" means, with respect to any Member, the balance in such Member' s Capital Account after giving effect to the following adjustments: (a) debit to such Capital Account of the items described in Section l.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations, and (b) credit to such Capital Account, such Member' s share of Company Minimum Gain or Member Non-recourse Debt Minimum Gain or of any amount which such Member would be required to restore under this Agreement or otherwise. The foregoing definition of Adjusted Capital Account Balance is intended to comply with the provisions of Section l.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith. " Affiliate" means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by or is under common Control with such Person. Notwithstanding the foregoing, (i) no Member shall be deemed an Affiliate of the Company, (ii) the Company shall not be deemed an Affiliate of any Member, and (iii) no partner or member of KRH, or any of such partner or member' s Affiliates (other than KRH and its Subsidiaries) shall be deemed an Affiliate of any Member or the Company or of RHI Inc. " Amendment No. 1 to the Credit Agreement" means Amendment No. 1, dated as of October 12, 2007, to the Credit Agreement. " Amendment No. 2 to the Credit Agreement" means Amendment No. 2, dated as of May 29, 2008, to the Credit Agreement, or with Majority Member Vote, any other agreement that defines " Tax Distribution" . " Agreement" has the meaning set forth in the preamble of this Agreement, as the same may be amended, supplemented or otherwise modified from time to time. " Annual Business Plan" means the annual business plan which sets out the strategy and action plans for the Company. This business plan may include any of the following: financial performance and forecasts, an outline of changes to be made to the Company, potential changes to the market, customers and competition, operating budgets, capital budgets, capital plan, objectives and goals for the year (including the planned production slate for the year), key performance indicators, issues or problems, any operational changes, and any changes to management and personnel. " Applicable Tax Rate" means (i) 41% or (ii) if, in the good faith determination of the Manager, the highest combined federal, state and local marginal rate applicable to corporate or individual taxpayers residing in New York City, New York, taking into account the deductibility of state and local income taxes for federal income tax purposes is increased, such appropriate higher rate, as determined by the Manager. " Approved Plan" means the Equity Incentive Plan in effect on the date of this Agreement. " Available Cash" means, at any given time, the amount of cash available for distributions determined by the Manager at such time after taking into account amounts believed by the Manager to be required to pay the operating and capital requirements of the business,
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reserves of the business and after making adequate provision for Tax Distribution Amounts due or anticipated to become due. " Beneficial Owner" or " beneficial owner" (including, with correlative meanings, the terms " beneficial ownership" and " beneficially owns" ) has the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable, except that a Person shall be deemed to have Beneficial Ownership of all Units or Shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time or is exercisable only upon the occurrence of a subsequent condition; provided , further , that the provisions of Section 4.3 of this Agreement will also apply in calculating the beneficial ownership of Membership Units by KRH or a Permitted Transferee. " Board" or " Board of Directors" means the board of directors of the Manager, or the equivalent governing body if the Manager does not have a board of directors. " 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. " Capital Account" means the Capital Account maintained for each Member on the Company' s books and records in accordance with the following provisions:(1) To each Member' s Capital Account there shall be added (a) such Member' s Capital Contributions, (b) such Member' s allocable share of Net Income and any items in the nature of income or gain that are specially allocated to such Member pursuant to Article 6 or other provisions of this Agreement and (c) the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member.(2) From each Member' s Capital Account there shall be subtracted (a) the amount of (i) cash and (ii) the Gross Asset Value of any Company Assets (other than cash) distributed to such Member (other than any payment of principal and/or interest to such Member pursuant to the terms of a loan made by the Member to the Company) pursuant to any provision of this Agreement, (b) such Member' s allocable share of Net Losses and any other items in the nature of expenses or losses that are specially allocated to such Member pursuant to Article 6 or other provisions of this Agreement and (c) liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.(3) In the event any Interest in the Company is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest.(4) In determining the amount of any liability for purposes of Paragraphs 1 and 2 of this definition, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code.
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(5) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations and shall be interpreted and applied in a manner consistent with such sections of the Treasury Regulations. In the event that the Manager shall determine that it is prudent to modify the manner in which the Capital Accounts, or any additions or subtractions thereto, are computed in order to comply with such sections of the Treasury Regulations, the Manager may make such modification; provided, however, that it is not likely to have a material effect on the amounts distributable to any Member pursuant to Article 7 hereof upon the dissolution of the Company. The Manager shall also make (a) any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of Company capital reflected on the Company' s balance sheet, as computed for book purposes, in accordance with Section 1.704-1(b)(2)(iv)( q ) of the Treasury Regulations, and (b) any appropriate modifications in the event that unanticipated events might otherwise cause this Agreement not to comply with Section 1.704-1(b) or 1.704-2 of the Treasury Regulations. " Capital Contribution" means the total amount of cash and the agreed fair market value (net of all liabilities secured by such assets that the Company is considered to assume or take subject to under Section 752 of the Code) of all other assets contributed to the Company by a Member. " Cash Amount" means, with respect to any Membership Units subject to an Exchange pursuant to Article 9 hereof,, an amount of cash equal to the Deemed Partnership Interest Value attributable to such Membership Units. " Cash Equivalents" means any of the following denominated in U.S. Dollars: (i) marketable direct obligations issued or unconditionally guaranteed by the government of the United States or issued by any agency thereof and backed by the full faith and credit of the United States maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from any of Standard & Poor' s Corporation or any successor rating agency (" S&P" ) or Moody' s Investors Service, Inc. or any successor rating agency (" Moody' s" ); (iii) commercial paper maturing not more than one year from the date of issuance thereof and, at the time of acquisition, having the highest rating obtainable from either S&P or Moody' s; (iv) time deposits, certificates of deposit or bankers' acceptances, maturing not more than one year from the date of issuance thereof, of any commercial bank or trust company having capital and surplus in excess of $500,000,000 and the commercial paper of the holding company of which has the highest rating obtainable from either S&P or Moody' s; or (v) investments in money market funds complying with the risk limiting conditions of Rule 2a-7 or any successor rule of the Securities and Exchange Commission under the Investment Company Act of 1940, in each case provided in clauses (i), (ii), (iii) and (iv) above, maturing within one year from the date of acquisition. " Certificate" has the meaning set forth in Section 2.1(a) of this Agreement.
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" Certificate of Incorporation" means that certain Amended and Restated Certificate of Incorporation of RHI Inc., dated as of June 23, 2008. " Change of Control" means the occurrence of any of the following events (whether or not approved by the Board of Directors of RHI Inc.): (i) any Person or Group is or becomes the Beneficial Owner (other than a Permitted Holder), directly or indirectly, of RHI Inc.' s voting stock representing 50% or more of the total voting power of all outstanding voting stock of RHI Inc.; (ii) RHI Inc. consolidates with, or merges with or into, another entity or Person, or RHI Inc. sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person or entity, other than any such transaction where immediately after such transaction the shareholders of the RHI Inc. immediately prior to such transaction, beneficially own or owns (as so determined), directly or indirectly, voting stock representing a majority of the total voting power of the outstanding voting stock of the surviving entity or transferee Person; (iii) during any consecutive one-year period, the Continuing Directors cease for any reason to constitute a majority of the board of directors of RHI Inc.; or (iv) the adoption of a plan of liquidation or dissolution of RHI Inc. " Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a specific provision of the Code shall mean, where appropriate, the corresponding provision in any successor statute. " Company" has the meaning set forth in the preamble of this Agreement. " Company Assets" means all interests in real and personal property owned by the Company from time to time (including the assets of all disregarded entities owned by the Company), and shall include both tangible and intangible property (including cash). " Company Minimum Gain" has the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations for the phrase " partnership minimum gain." " Confidential Information" has the meaning set forth in Section 10.3(a) of this Agreement. " Continuing Director" means, as of any date of determination, any member of the Board of Directors of the Company who was (1) a member of such Board of Directors on the date of the completion of the Initial Public Offering, (ii) nominated for election or elected to such Board of Directors with, or whose election to such Board of Directors was approved by the affirmative vote of, a majority of Continuing Directors who were members of such Board of
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Directors at the time of such nomination or election or (iii) nominated by KRH pursuant to the Director Designation Agreement. " Control" (including the terms " 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 Equity Interests, as trustee or executor, by contract or otherwise. " Credit Agreement" means the Credit, Security, Guaranty and Pledge Agreement, dated as of January 12, 2006, as amended and restated as of April 13, 2007 and as amended by Amendment No. 1 thereto, dated as of October 12, 2007, as further amended by Amendment No. 2 thereto, dated as of May 29, 2008, and as it may be thereafter amended, and, with Majority Member Vote, any replacement, additional or supplemental credit facility, loan agreement, indenture or debt obligation. " Deemed Partnership Interest Value" means, as of any date, the Deemed Value of the Membership Interests multiplied by the applicable Percentage Interest. " Deemed Value of the Membership Interests" means, as of any date, (i) the total number of outstanding Membership Units beneficially owned by the Manager as of the close of business on such date multiplied by the RHI Inc. Market Price determined as of such date of a Share, as adjusted for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distribution of warrants or options, distributions of evidences of indebtedness and investments (ii) divided by the Percentage Interest of the Manager. " Depreciation" means, for each Fiscal Year or other period, an amount equal to the federal income tax depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Manager. " Dilutive Issuance" means any Additional Equity Issuance by RHI Inc. other than (i) an Additional Equity Issuance where the total cash consideration received per Share (or to be received) by RHI Inc. upon issuance of Shares in such Additional Equity Issuance (or upon conversion or exercise of securities, options, warrants or rights issued in such Additional Equity Issuance) plus any applicable underwriters' or brokers' discount or commission is not less than the RHI Inc. Market Price as of a date not more than 5 trading days prior to the date of the Additional Equity Issuance, (ii) an underwritten offering not primarily directed to existing shareholders of RHI Inc. or their Affiliates where the price was determined by an investment banking firm of international repute, (iii) an Additional Equity Issuance resulting from the
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exercise or conversion of securities, options, warrants or rights where the issuance of such securities, options, warrants or rights constituted an earlier Additional Equity Issuance that was not a Dilutive Issuance, (iv) any Additional Equity Issuance approved by KRH, or (v) any Additional Equity Issuance pursuant to the Equity Incentive Plan. " Director Designation Agreement" means the Director Designation Agreement, dated as of June 23, 2008, by and between RHI Inc. and KRH, as the same may be amended, supplemented or otherwise modified from time to time. " Discount" has the meaning set forth in Section 4.13. " Economic Interest" means a Person' s right to share in the Net Income, Net Losses, or similar items of, and to receive distributions from, the Company, but does not include any other rights of a Member including, without limitation, the right to vote or to participate in the management of the Company or, except as specifically provided in this Agreement or required under the LLC Act, any right to information concerning the business and affairs of the Company. " Equity Incentive Plan" means the RHI Inc. 2008 Equity Incentive Plan, as the same may be amended, supplemented, replaced, increased or otherwise modified from time to time. " Equity Interests" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, partnership interests (whether general or limited), limited liability company interests or equivalent ownership interests in or issued by, or interests, participations or other equivalents to share in the revenues or earnings of (except as provided in any service agreement that includes a revenue sharing component entered into in the ordinary course of business), such Person or securities convertible into, or exchangeable or exercisable for, such shares, interests, participations or other equivalents and options, warrants or other rights to acquire such shares, interests, participations or other equivalents; provided that discounts and rebates granted in the ordinary course of business shall not in any event constitute an Equity Interest. " ERISA" means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations promulgated thereunder, as the same may be amended from time to time. " Excess Non-recourse Liability" has the meaning set forth in Section 1.752-3(a)(3) of the Treasury Regulations " Exchange" means the right to exchange Membership Units for Shares and/or cash pursuant to Article 9 hereof. " 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. " Exchange Date" means the date on which an Exchange is effected.
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" Exchange Right" has the meaning set forth in Section 9.1(a) of this Agreement. " Exchanged Units" has the meaning set forth in Section 9.1(a) of this Agreement. " Exchanging Member" has the meaning set forth in Section 9.1(a) of this Agreement. " Exchange Date" has the meaning set forth in Section 9.1(a) of this Agreement. " Exchange Notice" has the meaning set forth in Section 9.1(a) of this Agreement. " Fiscal Period" means each fiscal quarter which shall consist of three Fiscal Months. " Fiscal Year" means the fiscal year of the Company ending on December 31st of each year. " GAAP" means generally accepted accounting principles in the United States in effect as of the relevant date on which GAAP is to be determined. " 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. " Gross Asset Value" means, with respect to any asset of the Company, the asset' s adjusted basis for federal income tax purposes, except as follows:(1) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Manager and the contributing Member.(2) The Gross Asset Values of all Company Assets immediately prior to the occurrence of any event described in Subparagraphs (a), (b), (c) or (d) of this Paragraph (2) shall be adjusted to equal their respective gross fair market values, as determined by the Manager using such reasonable method of valuation as it may adopt:(a) the acquisition of an additional Interest in the Company by a new or existing Member, if the Manager reasonably determines that such adjustment is necessary or appropriate to reflect the relative Economic Interests of the Members in the Company;(b) the distribution by the Company to a Member of more than a de minimis amount of Company Assets as consideration for an Interest in the Company, if the Manager reasonably determines that such adjustment is necessary or appropriate to reflect the relative Economic Interests of the Members in the Company;
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(c) the liquidation of the Company within the meaning of Section 1.704-1(b)(2)(ii)( g ) of the Treasury Regulations; and(d) at such other times as the Manager shall reasonably determine necessary or advisable in order to comply with Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations.(3) The Gross Asset Value of any Company Asset distributed to a Member shall be the gross fair market value of such asset on the date of distribution as determined by the Manager.(4) The Gross Asset Values of Company Assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations; provided, however, that Gross Asset Values shall not be adjusted pursuant to this Paragraph (4) to the extent that the Manager reasonably determines that an adjustment pursuant to Paragraph (2) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this Paragraph (4).(5) If the Gross Asset Value of a Company Asset has been determined or adjusted pursuant to Paragraph (1), (2) or (4) of this definition, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such Company Asset for purposes of computing Net Income and Net Losses. " Group" has the meaning set forth in Section 13(d)(3) and Rule 13d-5 of the Exchange Act. " Indebtedness" means, with respect to any Person, at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments issued by such Person, (iii) all obligations of such Person to pay the deferred purchase price for property or services, except trade accounts payable arising in the ordinary course of business and consistent with past practice, (iv) all reimbursement obligations of such Person in respect of letters of credit or other similar instruments, (v) all Indebtedness of others secured by any lien, encumbrance or mortgage on any asset of such Person, and (vi) all Indebtedness of others guaranteed (whether by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain a minimum net worth, financial ratio or similar requirements, or otherwise) by such Person. " Indemnitee" has the meaning set forth in Section 4.14(a) of this Agreement. " Independent Directors" means any director of RHI Inc. that, if the RHI Inc. common stock is traded on the NASDAQ Global Market, satisfies the definition of an " independent director" set forth in the applicable rules in the Marketplace Rules of the NASDAQ Global Market, Inc., as such rules may be amended from time to time, or, if the RHI Inc.
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common stock is then traded on a different exchange, such term shall mean any director of RHI Inc. that satisfies the definition of independent director according to the rules of such exchange. " Initial Public Offering" means the initial public offering of the Shares of common stock of RHI Inc. registered under the Securities Act of 1933, as amended. " Intellectual Property" means all U.S., state and foreign intellectual property, including but not limited to all (i) (a) patents, inventions, discoveries, processes and designs; (b) copyrights and works of a ...