OPERATING AGREEMENT OF
 
START MEDIA/DIGIPLEX, LLC
 
by and between
 
START MEDIA LLC
 
and
 
DIGITAL CINEMA DESTINATIONS CORP.
 
dated as of December 10, 2012

 

 
 
 

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TABLE OF CONTENTS
 
Page
 
ARTICLE I
 
DEFINED TERMS
     
SECTION 1.01. Certain Defined Terms
1
ARTICLE II
 
FORMATION, TERM, PURPOSE AND POWERS
 
SECTION 2.01. Formation
11
SECTION 2.02. Name
11
SECTION 2.03. Term
11
SECTION 2.04. Principal Place of Business
11
SECTION 2.05. Title to Company Property
12
SECTION 2.06. Agent for Service of Process
12
SECTION 2.07. Purpose
12
SECTION 2.08. Powers of the Company
12
   
ARTICLE III
 
RIGHT OF FIRST REFUSAL; FIDUCIARY DUTIES; CORPORATE OPPORTUNITIES
     
SECTION 3.01. Right of First Refusal
12
SECTION 3.02. Fiduciary Duties; Corporate Opportunities
13
   
ARTICLE IV
 
MEMBERSHIP UNITS, CAPITAL CONTRIBUTIONS,
 
CAPITAL ACCOUNTS AND BUDGET
     
SECTION 4.01. Classes of Units
14
SECTION 4.02. Initial Capital Contributions
14
SECTION 4.03. Membership Units
15
SECTION 4.04. Additional Membership Units
15
SECTION 4.05. Budget
15
SECTION 4.06. Additional Funding
16
SECTION 4.07. Status of Capital Contributions
17
SECTION 4.08. Capital Accounts
17
ARTICLE V
 
BOARD OF MANAGERS; MANAGERS
 
AND OFFICERS
     
SECTION 5.01. Management of the Company
18
SECTION 5.03.  Frequency of Meetings
18
SECTION 5.04.   Removal of Directors; Vacancies
19

 
 
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SECTION 5.05.  Majority Vote of Board of Managers Required
19
SECTION 5.06.  Start Media Vote of Board of Managers Required
21
SECTION 5.07.  Action by Written Consent
21
SECTION 5.08.  Telephonic Meetings
21
SECTION 5.09.  Officers
21
   
ARTICLE VI
 
ALLOCATIONS; TAX MATTERS
     
SECTION 6.01. Allocations
21
SECTION 6.02. Special Allocations
22
SECTION 6.03. Curative Allocations
23
SECTION 6.04. Tax Allocations
24
SECTION 6.05. Tax Decisions
24
   
ARTICLE VII
 
DISTRIBUTIONS
     
SECTION 7.01. Distribution of Net Cash Flow From Operations
25
SECTION 7.02. Liquidity Event Distribution
25
SECTION 7.03. Tax Distributions
25
SECTION 7.04. Distribution Rules
26
SECTION 7.05. Limitations on Distribution
26
   
ARTICLE VIII
 
BOOKS AND RECORDS; FINANCIAL STATEMENTS
     
SECTION 8.01. Books and Records; Financial Statements
26
SECTION 8.02. Reporting Requirements
27
   
ARTICLE IX
 
RESTRICTIONS ON TRANSFER
     
SECTION 9.01. Certificates; Legends
28
SECTION 9.02. Certain Restrictions on Sale or Encumbrance
29
SECTION 9.03. Improper Sale or Encumbrance
30
SECTION 9.04. Rights of First Refusal
30
SECTION 9.05. Right to Participate in Certain Dispositions
32
SECTION 9.06. Start Media Put Right Upon Digiplex Change of Control
33
SECTION 9.07. Transferees to Execute Agreement
34
   
ARTICLE X
 
DISSOLUTION, LIQUIDATION AND TERMINATION
     
SECTION 10.01. No Dissolution
35
SECTION 10.02. Events Causing Dissolution
35
SECTION 10.03. Notice of Dissolution
35
SECTION 10.04. Liquidation
35

 
 
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SECTION 10.05. Termination
35
SECTION 10.06. Claims of the Members
36
   
ARTICLE XI
 
LIABILITY AND INDEMNIFICATION
     
SECTION 11.01. Liability of Members
36
SECTION 11.02. Indemnification by the Company
36
   
ARTICLE XII
 
OTHER AGREEMENTS
     
SECTION 12.01. Further Assurances
37
SECTION 12.02. Transactions Between the Company and the Members or Their
Affiliates
37
   
ARTICLE XIII
 
MISCELLANEOUS
     
SECTION 13.01. Confidential Information
37
SECTION 13.02. Notices
38
SECTION 13.03. Public Announcements
39
SECTION 13.04. Cumulative Remedies
39
SECTION 13.05. Binding Effect
39
SECTION 13.06. Interpretation
39
SECTION 13.07. Severability
39
SECTION 13.08. Counterparts
40
SECTION 13.09. Entire Agreement
40
SECTION 13.10. Governing Law; Submission to Jurisdiction
40
SECTION 13.11. Specific Performance
40
SECTION 13.12. Expenses
40
SECTION 13.13. Amendments and Waivers; Assignment
41
SECTION 13.14. No Third Party Beneficiaries
41
SECTION 13.15. Headings
41
SECTION 13.16. Construction
41
SECTION 13.17. Member Representations
41

 
Schedule 2.01
List of Members and Addresses
Schedule 4.05
Interim Budget
   
Exhibit A
Company Theaters
Exhibit B
Form of Management Agreement
Exhibit C
Form of Unit Certificate
Exhibit D
List of Current Digiplex Theaters

 
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OPERATING AGREEMENT
 
OF
 
START MEDIA/DIGIPLEX, LLC
 
This OPERATING AGREEMENT of Start Media/Digiplex, LLC, a Delaware limited
liability company (the “Company”), is made and effective as of December 10,
2012, by and between Start Media, LLC, a Delaware limited liability company
(“Start Media”) and Digital Cinema Destinations Corp., a Delaware corporation
(“Digiplex”) (each, a “Member” as defined herein).
 
W I T N E S S E T H:
 
WHEREAS, the Members desire to form the Company under the Act (as defined below)
for the purposes and upon the terms and conditions set forth herein; and
 
WHEREAS, the Members desire that the Company be their principal vehicle to
acquire, retrofit (if needed) and operate movie theaters (the “Company
Business”) upon the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
 
ARTICLE I
DEFINED TERMS
 
SECTION 1.01.  Certain Defined Terms.  i)  Each of the following terms shall
have the meaning provided in the Section or Schedule set forth opposite such
term:
 
“Additional Capital Call Price” means, with respect to additional Membership
Units to be issued in any Capital Call, a price per Membership Unit equal to (i)
an amount equal to (A) five (5) multiplied by (B) the pro forma combined TLCF of
the all the Company Theaters for the twelve (12) month period immediately
preceding the delivery date of the applicable Capital Call notice, as determined
in good faith by the Board of Managers, divided by (ii) the total number of
Membership Units issued and outstanding immediately prior to such Capital Call;
provided, however, that if such Capital Call is for the acquisition of New
Theaters and in an amount in excess of $2,500,000, then either Start Media or
Digiplex may, by written notice to the other, dispute the valuation methodology
set forth above, and thereafter the Members shall discuss in good faith an
alternate valuation methodology and/or valuation of the Company for the purposes
of determining the Additional Capital Call Price of new Membership Units to be
issued in connection with such acquisition.  If the Members are unable to agree
upon any such alternate valuation within ten (10) days of delivery of such
notice, the Specified Appraiser shall determine the Fair Market Value of the
Company, and such determination shall be final and binding.  The costs of the
appraisal up to $25,000 shall be borne by the Company, with the disputing Member
required to pay any costs in excess of such amount.
 
 
 

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“Adjusted Capital Account” means, with respect to each Member, the balance in
such Member’s Capital Account as of the end of the relevant Fiscal Year, after
giving effect to the following adjustments:
 
(i)           Credit to such Capital Account any amounts which such Member is
obligated to restore pursuant to any provision of this Agreement or is deemed to
be obligated to restore pursuant to the penultimate sentences of each of
Sections 1.704-2(g)(1) and 1.704-2(i)(5 of the Regulations); and
 
(ii)           Debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of
the Regulations.
 
“Adjusted Capital Account Deficit” means, with respect to each Member, the
deficit balance, if any, in such Member’s Adjusted Capital Account as of the end
of the relevant Fiscal Year.
 
“Affiliate” means, with respect to a specified Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such specified Person.
 
“Agreement” means this Operating Agreement of Start Media/Digiplex, LLC, as
amended, modified, supplemented or restated from time to time.
 
“Asset Value” means, with respect to any asset, the asset’s adjusted basis for
federal income tax purposes, except as follows:
 
(i)           The initial Asset Value of any asset (other than money)
contributed by a Member to the Company shall be the gross fair market value of
such asset as reasonable determined by the Board of Managers;
 
(ii)           The Asset Values of all Company assets shall be adjusted to equal
their respective gross fair market values as determined by agreement among all
of the Managers (which agreement shall not be unreasonably withheld by any
Manager) as of the following times: (a) the acquisition of an additional
interest in the Company by any new or existing Member in exchange for more than
a de minimis Capital Contribution; (b) the distribution by the Company to a
Member of more than a de minimis amount of property as consideration for an
interest in the Company; or (c) the liquidation of the Company within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations, provided however,
that adjustments pursuant to clauses (a) and (b) above shall be made only if all
of the Managers agree that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Members in the Company (which
agreement shall not be unreasonably withheld by any Manager); and
 
 
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(iii)           The Asset Value of any Company asset distributed to any Member
shall be the gross fair market value of such asset on the date of distribution,
as determined by the agreement among all the Managers (which agreement shall not
be unreasonably withheld by any Manager).
 
If the Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (i) or (ii), such Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset.
 
“Beneficial Owner” or “Beneficially Own” has the meaning given such term in Rule
13d-3 under the Exchange Act.
 
“Business Day” means any day, except a Saturday, Sunday or other day on which
commercial banking institutions in the State of New York are authorized or
directed by Law or executive order to close.
 
“Capital Account” means, with respect to any Member, the account maintained for
such Member in accordance with the provisions of Section 4.08.
 
“Capital Contribution” means, with respect to any Member, the aggregate amount
of money contributed to the Company and the Asset Value of any property (other
than money) contributed to the Company pursuant to Article IV.  In the case of a
Member that acquires an interest in the Company by virtue of an assignment or
transfer in accordance with the terms of this Agreement, “Capital Contribution”
means the Capital Contribution of such Member’s predecessor to the extent
relating to the acquired interest.
 
“Class A Capital Contribution” means the aggregate amount of money or fair
market value of other assets contributed to the Company by Start Media on the
date hereof or any subsequent capital contribution by Start Media (or its
Transferee) in exchange for additional Class A Units, as the case may be, in
respect of its Class A Units, as set forth on Schedule 2.01.
 
“Class A Preferred Return” means a return equal to six (6%) percent of the
Class A Capital Contribution (less any distributions made in respect of such
Class A Capital Contribution) per annum, which shall be cumulative from year to
year, from the date hereof, or the date of any subsequent Class A Capital
Contribution in exchange for additional Class A Units, as the case may be, up to
the date when the Class A Capital Contribution, together with all Class A
Preferred Returns thereon, have been returned to Start Media (or its
Transferee).
 
“Class B Capital Contribution” means the aggregate amount of money or fair
market value of other assets contributed to the Company by Digiplex on the date
hereof or any subsequent capital contribution by Digiplex (or its Transferee) in
respect of its Class B Units, as set forth on Schedule 2.01.
 
 
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“Class B Preferred Return” means a return equal to six (6%) percent of the
Class B Capital Contribution (less any distributions made in respect of such
Class B Capital Contribution) per annum, which shall be cumulative from year to
year, from the date hereof, or the date of any subsequent Class B Capital
Contribution in exchange for additional Class B Units, as the case may be, up to
the date when the Class B Capital Contribution, together with all Class B
Preferred Returns thereon, have been returned to Digiplex (or its Transferee).
 
“Certificate” means the Certificate of Formation and any and all amendments
thereto and restatements thereof filed on behalf of the Company with the
Secretary of State of the State of Delaware pursuant to the Act.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any corresponding federal tax statute enacted after the date of this
Agreement.  The reference to a specific section of the Code refers not only to
such specific section but also to any corresponding provision of any federal tax
statute enacted after the date of this Agreement, as such specific section or
corresponding provision is in effect on the date of application of the
provisions of this Agreement containing such reference.
 
“Company Sale” means the sale of all or substantially all of the Company’s and
the Company Subsidiaries’ assets, taken as a whole,  to any Person (other than
one of the Members or an Affiliate or Related Person of any Member), or any
other transaction whether by sale of Membership Units, sale of assets, merger,
recapitalization, reorganization or otherwise, pursuant to which one or more
Persons (other than one of the Members or any Affiliate of any Member),
individually or in the aggregate, shall own in excess of 50% of the then
outstanding voting securities of the Company on a fully diluted basis (as
measured in terms of voting power), in each case in a single transaction or
series of related transactions.
 
“Company Subsidiary” means a Subsidiary of the Company.
 
“Company Theaters” means the movie theaters set forth on Exhibit A and any New
Theaters acquired by the Company or any Company Subsidiary after the date
hereof.
 
“Control” (including the terms “Controlled by” and “under common Control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or indirectly,
of securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person.
 
“Covered Person” means a Member, any Affiliate of a Member, any officers,
directors, Managers, shareholders, employees or partners or members of a Member,
or its respective Affiliates or any Managers or Officers of the Company.
 
 
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“Depreciation” means, for each Fiscal Year or other period, an amount equal to
the depreciation, amortization or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such Fiscal Year or
other period; provided however, that if the Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such
Fiscal Year or other period, Depreciation shall be an amount that bears the same
ratio to such beginning Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction with respect to such asset for
such Fiscal Year or other period bears to such beginning adjusted tax basis; and
provided further that, if the federal income tax depreciation, amortization or
other cost recovery deduction for such Fiscal Year or other period is zero,
Depreciation shall be determined with reference to such beginning Asset Value
using any reasonable method selected by the Managers.
 
“Encumbrance” means any security interest, pledge, mortgage, lien, charge,
adverse claim of ownership or use, or other encumbrance of any kind.
 
“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
 
“Fair Market Value” of Membership Units or other property, as the case may be,
shall mean the cash price that an unaffiliated third party would pay to acquire
all of such Membership Interests (computed on a fully diluted basis after giving
effect to the exercise of any and all outstanding conversion rights, exchange
rights, warrants and options) or other property in an arm’s-length transaction,
assuming with respect to the Fair Market Value of Membership Units, that the
Company was being sold in a manner reasonably designed to solicit all possible
participants and permit all interested Persons an opportunity to participate and
to achieve the best value reasonably available to the Members at the time,
taking into account all existing circumstances, including, without limitation,
the terms and conditions of all agreements (including this Agreement) to which
the Company is then a party or by which it is otherwise benefited, as determined
by the Specified Appraiser.  Each Member hereby covenants and agrees that such
Member will take all actions reasonably necessary to determine the Fair Market
Value.  The Specified Appraiser shall determine its final view as to the Fair
Market Value within thirty (30) days of such Specified Appraiser being
engaged.  The Company shall provide reasonable access to the Specified Appraiser
to members of management of the Company and to the books and records of the
Company so as to allow such Specified Appraiser to conduct due diligence
examinations in scope and duration as are customary in valuations of this
kind.  Each of the Members agrees to cooperate with the Specified Appraiser and
to provide such information as may reasonably be requested.  Notwithstanding the
foregoing, in the case of property consisting of securities traded in the public
markets, the Fair Market Value of such securities will be equal to the volume
weighted average  price of such security for the thirty-day trading period
immediately preceding the date on which such valuation is required.
 
“Fiscal Year” means (i) the period commencing upon the formation of the Company
and ending on June 30, 2013, (ii) any subsequent twelve-month period commencing
on July 1 and ending on June 30, or (iii) any portion of the period described in
clause (ii) of this sentence for which the Company is required to allocate Net
Profits, Net Losses and other items of Company income, gain, loss or deduction
pursuant to Article VII hereof.
 
 
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“GAAP” means United States generally accepted accounting principles as in effect
from time to time.
 
“Law” means any statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or other order issued or promulgated by any
national, supranational, state, federal, provincial, local or municipal
government or any administrative or regulatory body with authority therefrom
with jurisdiction over the Company or the Members, as the case may be.
 
“Liquidity Event” means (i) any dissolution, winding up or other liquidation of
the Company; (ii) the sale of all or substantially all of the Company’s and the
Company Subsidiaries’ assets, taken as a whole, to any Person or Persons (other
than one of the Members or an Affiliate or Related Person of any Member); (iii)
the sale of all of the issued and outstanding Membership Units of the Company to
any Person or Persons (other than one of the Members or an Affiliate or Related
Person of any Member); (iv) any new issuance of Membership Units pursuant to
which one or more Persons (other than one of the Members or any Affiliate of any
Member), individually or in the aggregate, shall own in excess of 50% of the
then outstanding voting securities of the Company on a fully diluted basis (as
measured in terms of voting power), in each case in a single transaction or
series of related transactions or (v) a secondary public offering of the
Company’s equity by the Members.
 
“Liquidity Event Net Proceeds” means the net cash proceeds from a Liquidity
Event, less any portion thereof used to establish reserves to pay expenses
related to any transaction generating Liquidity Event Net Proceeds or to repay
or defease indebtedness of the Company or any Company Subsidiary, all as
determined by the  Board of Managers.  If the Board of Managers subsequently
determines that any such previously established reserves are no longer necessary
to the full extent then reserved, then the  Board of Managers may reduce such
reserves, and Liquidity Event Net Proceeds shall be deemed to be increased by a
corresponding amount.
 
“Liquidity Event Year” means the Fiscal Year in which a Liquidity Event occurs,
and each succeeding Fiscal Year.
 
“Majority Vote” means, with respect to any matter to be voted on, the written
approval of, or the affirmative vote by, a majority of the Managers serving on
the Board of Managers, which approval or vote shall include the written approval
of, or affirmative vote by, at least one (1) Start Media Manager and at least
one (1) Digiplex Manager.
 
“Management Agreement” means a management agreement between Digiplex and a
Company Subsidiary, substantially in the form attached as Exhibit B.
 
“Marketable Securities” means securities that are (a) (i) securities of or other
interests in any Person that are traded on a United States national securities
exchange or reported on by the National Association of Securities Dealers
Automated Quotation System or (ii) debt securities on market terms of an issuer
that has debt or equity securities that are so traded or so reported on and in
which Marketable Securities a nationally recognized securities firm has agreed
to make a market, and (b) not subject to restrictions on transfer as a result of
any applicable contractual provisions or the provisions of the Securities Act
or, if subject to such restrictions under the Securities Act, are also subject
to registration rights reasonably acceptable to the Person receiving such
Marketable Securities as consideration in a transaction pursuant to Article IX
hereof.
 
 
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“Member” means any Person named as a member of the Company on Schedule 2.01
hereto and any Person admitted as an additional Member pursuant to the
provisions of this Agreement, in each case, in such Person’s capacity as a
member of the Company.
 
“Membership Unit” means a limited liability company interest in the Company
representing such fractional part of the interest of all unit holders pursuant
to this Agreement as is equal to the quotient of one divided by the total number
of Membership Units as evidenced by a certificate in the form of Exhibit C, and
includes the Class A Units and the Class B Units.
 
“Net Cash Flow From Operations” means, for any period of determination, the
combined gross cash proceeds from all Company operations, less the portion
thereof used to pay or establish reasonable reserves for all Company expenses,
debt payments, capital improvements, working capital requirements, replacements
and contingencies, all as determined by the Board of Managers.  Net Cash Flow
From Operations shall not be reduced by depreciation, amortization, cost
recovery deductions or similar non-cash allowances.  If the Board of Managers
subsequently determines that any previously established reserves are no longer
necessary to the full extent then reserved, then the Board of Managers  may
reduce such reserves, and Net Cash Flow From Operations shall be deemed to be
increased by the corresponding amount.
 
“Net Profits” and “Net Losses” mean, for each Fiscal Year, an amount equal to
the Company’s taxable income or loss for such Fiscal Year, determined in
accordance with Section 703(a) of the Code (but including in taxable income or
loss, for this purpose, all items of income, gain, loss or deduction required to
be stated separately pursuant to Section 703(a)(1) of the Code), with the
following adjustments:
 
(i)           any income of the Company exempt from federal income tax and not
otherwise taken into account in computing Net Profits or Net Losses pursuant to
this definition shall be added to such taxable income or loss;
 
(ii)           any expenditures of the Company described in Section 705(a)(2)(B)
of the Code (or treated as expenditures described in Section 705(a)(2)(B) of the
Code pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise
taken into account in computing Net Profits or Net Losses pursuant to this
definition shall be subtracted from such taxable income or loss;
 
(iii)           in the event the Asset Value of any asset of the Company is
adjusted in accordance with paragraph (ii) or paragraph (iii) of the definition
of “Asset Value” above, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Net Profits or Net Losses;
 
 
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(iv)           gain or loss resulting from any disposition of any asset of the
Company with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Asset Value of the asset disposed
of, notwithstanding that the adjusted tax basis of such asset differs from its
Asset Value;
 
(v)           in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year or other period,
computed in accordance with the definition of “Depreciation” above; and
 
(vi)           any items which are specially allocated pursuant to Sections 6.02
and 6.03 shall not be taken into account in computing Net Profits or Net Losses.
 
The amounts of the items of Company income, gain, loss or deduction available to
be specially allocated pursuant to Sections 6.02 and 6.03 shall be determined by
applying rules analogous to those set forth in subparagraphs (i) through (v)
above.
 
“Permitted Transferee” means, with respect to a specified Person, any Affiliate
of such Person, provided such Person is not a competitor of the Company, as
reasonably determined by the Board of Managers.
 
“Person” means any individual, corporation, partnership, limited partnership,
limited liability company, joint venture, trust, unincorporated or governmental
organization or any agency or political subdivision thereof.
 
“Price Determination Date” means in connection with any Sale of Membership Units
to the Company or the Other Members pursuant to Section 9.04 hereof, the date on
which the Prospective Seller receives a Notice of Election indicating the Other
Member’s interest in purchasing such Membership Units.
 
“Regulations” means the income tax regulations, including temporary regulations,
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
 
“Sale” means, in respect of any Membership Unit, New Theater, property or other
asset, any sale, assignment, transfer, distribution or other disposition thereof
or of a participation therein, or other conveyance of legal or beneficial
interest therein, or any short position in a security or any other action or
position otherwise reducing risk related to ownership through hedging or other
derivative instruments, whether voluntarily or by operation of Law or any
agreement or commitment to do any of the foregoing.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated by thereunder.
 
 
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“Specified Appraiser” means a nationally recognized investment banking,
accounting or valuation firm that is not an Affiliate of any Member.  The Board
of Managers shall, in good faith, agree on the identity of a Person to act as
such Specified Appraiser.  If the Board of Managers are unable to agree upon the
identity of the Specified Appraiser within ten (10) days after the date either
party proposed that one be selected, the Specified Appraiser will be selected by
an arbitrator located in the City of New York, New York selected by the American
Arbitration Association (or if such organization ceases to exist, the arbitrator
shall be chosen by a court of competent jurisdiction).  The arbitrator shall
select the Specified Appraiser (within ten (10) days of his or her appointment)
from a list, jointly prepared by Digiplex and Start Media, of not more than six
proposed Specified Appraisers, of which no more than three may be named by
Digiplex and no more than three may be named by Start Media.  The arbitrator may
consider, within the ten (10) day period allotted, arguments from the parties
regarding which Specified Appraiser to choose, but the selection by the
arbitrator shall be made in its sole discretion from the list of six.  The
selection by the arbitrator of such Specified Appraiser shall be final and
binding upon the parties.
 
“Start Media Vote” means, with respect to any matter to be voted on, the written
approval of, or the affirmative vote by, at least one (1) Start Media Manager.
 
“Subsidiary” or “Subsidiaries” of any Person means any corporation, partnership,
limited liability company, joint venture or other legal entity of which such
person (either alone or through or together with any other Subsidiary), owns,
directly or indirectly, more than 50% of the stock or other equity interests,
the holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation or other legal
entity.
 
“Third Party” means with respect to any Member, any Person (other than a
Permitted Transferee of such Member).
 
“TLCF” means, with respect to the Company Theaters for any Fiscal Year or other
period of determination, the total revenues of the Company Theaters covered by
the Approved Budget less the costs of operations of such Company Theaters for
such Fiscal Year or other period, as determined in accordance with GAAP, but
excluding depreciation and amortization, general and administrative expenses,
management fees payable to Digiplex under any Management Agreements, interest
and taxes.
 
“Transferee” means any Person that is a transferee of a Member’s interest in the
Company, or part thereof.
 
(b)      The following terms have the meanings set forth in the Section set
forth opposite such term:
 
Term
Section
   
Accepting Party
9.04(c)
Act
2.01(a)

 
 
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Term
Section
   
Approved Budget
4.05
Assumed Tax Liability
7.03
Auditors
8.01
Board of Managers
5.01
Call Date
4.06(b)
Capital Call
4.06(b)
Chairman
5.02
Change of Control
9.06(d)
Class A Units
4.01
Class B Units
4.01
Company
Preamble
Company Business
Recitals
Confidential Information
13.01(a)
Corporate Opportunities Group
3.02(a)
Digiplex
Preamble
Digiplex Managers
5.02(a)
Interim Budget
4.05
Liquidating Trustee
10.03
Losses
11.02
Manager
5.02(a)
Maximum Digiplex Capital Call Amount
4.06(b)
New Theater
3.01(a)
New Theater Notice of Election
3.01(b)
New Theater Offer
3.01(a)
New Theater Offer Notice
3.01(a)
New Theater Offer Period
3.01(b)
Notice of Election
9.04(c)
Offer
9.04(a)
Offer Notice
9.04(a)
Offer Period
9.04(c)
Offer Price
9.04(a)
Offered Membership Units
9.04(a)
Officers
5.09
Other Member
9.04(a)
Prospective Seller
9.04(a)
Prospective Transferee
9.10
Put Right
9.06(a)
Regulatory Allocations
6.03
Remaining Membership Units
9.04(f)
Representatives
13.01(a)
Restricted Party
13.01(a)
Shortfall
4.05(b)
Start Media
Preamble
Start Media Managers
5.02(a)

 
 
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Term
Section
   
Subsequent Budget
4.05
Tax Distributions
7.03

 
ARTICLE II
FORMATION, TERM, PURPOSE AND POWERS
 
SECTION 2.01.  Formation.  ii)  The Members hereby form and confirm the
formation of the Company as a limited liability company under and pursuant to
the provisions of the Delaware Limited Liability Company Act (as the same may be
amended from time to time, the “Act”) for the purposes and upon the terms and
conditions hereinafter set forth.  The parties hereto agree that their rights,
duties and liabilities and the rights duties and liabilities of any additional
Member admitted to the Company in accordance with the terms hereof, shall be as
provided in the Act, except as otherwise provided herein.
 
(b)      The name and mailing address of each Member shall be listed on Schedule
2.01 attached hereto.  Each of the Members is hereby admitted as a Member of the
Company.  The Chairman, or a designee of the Chairman, shall be required to
update Schedule 2.01 from time to time, as necessary to reflect accurately the
information therein as known by the Chairman, but no such update shall modify
Schedule 2.01 in any manner inconsistent with this Agreement or the Act.  Any
amendment or revision to Schedule 2.01 made in accordance with this Agreement
shall not be deemed an amendment to this Agreement for purposes of
Section 13.13.  Any reference in this Agreement to Schedule 2.01 shall be deemed
to be a reference to Schedule 2.01, as amended and in effect from time to time.
 
(c)      The Chairman, or a designee of the Chairman, is hereby designated as an
authorized person, within the meaning of the Act, to execute, deliver and file,
or to cause the execution, delivery and filing of, any amendments or
restatements of the Articles and any other certificates, notices, statements or
other instruments (and any amendments or restatements thereof) necessary or
advisable for the formation of the Company or the operation of the Company in
all jurisdictions where the Company may elect to do business, but no such
amendment, restatement or other instrument may be executed, delivered or filed
unless adopted in a manner authorized by this Agreement.
 
SECTION 2.02.  Name.  The name of the Company is Start Media/Digiplex, LLC.
 
SECTION 2.03.  Term.  The term of the Company shall commence, and the
Certificate shall be filed in the office of the Secretary of State of the State
of Delaware, on the date hereof and shall continue for a term as set forth in
the Certificate, subject to the provisions set forth in Article X and applicable
Law.  The existence of the Company as a separate legal entity shall continue
until cancellation of the Certificate in the manner required by the Act.
 
SECTION 2.04.  Principal Place of Business.  The principal place of business of
the Company shall be in New Jersey or such other place as the Board of Managers
may determine from time to time, and the Company shall have other regional
offices and operations as the Board of Managers may determine from time to time.
 
 
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SECTION 2.05.  Title to Company Property.  All property of the Company, whether
real, personal or mixed, tangible or intangible, shall be deemed to be owned by
the Company as an entity, and no Member, individually, shall have any direct
ownership interest in such property.  Each Member waives any and all rights that
it may have to maintain an action for partition of the Company or its property.
 
SECTION 2.06.  Agent for Service of Process.  The Company’s registered agent for
service of process in the State of Delaware shall be as set forth in the
Certificate, as the same may be amended by the Board of Managers  from time to
time.
 
SECTION 2.07.  Purpose.  The purpose of the Company is to engage in (a) the
Company Business and (b) any and all lawful activities in accordance with the
Act which the Board of Managers  deems necessary or advisable in connection with
the Company Business.
 
SECTION 2.08.  Powers of the Company.  Subject to the limitations set forth in
this Agreement, the Company will possess and may exercise all of the powers and
privileges granted to it by the Act, by any other Law or this Agreement,
together with all powers incidental thereto, so far as such powers are necessary
or convenient to the conduct, promotion or attainment of the purpose of the
Company set forth in Section 2.07.
 
ARTICLE III
RIGHT OF FIRST REFUSAL; FIDUCIARY DUTIES; CORPORATE OPPORTUNITIES
 
SECTION 3.01.  Right of First Refusal.  iii)  The Members agree that the
opportunity to acquire additional movie theaters (excluding any movie theater
within a ten (10) mile radius of the movie theaters set forth on Exhibit D)
(each, a “New Theater”) will, in each case, be first offered to the Company.  If
at any time during the term of this Agreement Digiplex or any of its Affiliates
receives from or otherwise negotiates with a Third Party and reaches an
agreement in principle or agrees upon a term sheet or similar document, subject
to the negotiation and execution of definitive documentation, with respect to
one or more New Theaters  (a “New Theater Offer”), Digiplex shall provide the
Company and Start Media with written notice of such New Theater Offer (an “New
Theater Offer Notice”).  The New Theater Offer Notice shall attach the term
sheet or similar document (if any), identify the Third Party involved in the New
Theater Offer, the New Theaters covered by the New Theater Offer (the “Offered
New Theaters”) and all material terms and conditions relevant to the Board of
Manager’s evaluation of such New Theater Offer.
 
(b)      The receipt of a New Theater Offer Notice by the Company and Start
Media shall constitute an exclusive offer for the Company (or any of its Company
Subsidiaries) to acquire any or all of the Offered New Theaters.  Such offer
shall remain open and irrevocable until expiration of ten (10) Business Days
after receipt of such New Theater Offer Notice by the Company and Start Media
(the “New Theater Offer Period”).  At any time prior to expiration of the New
Theater Offer Period, the Company shall (by a Start Media Vote pursuant to
Section 5.06) have the right to accept the offer to acquire any or all of the
Offered New Theaters by giving a written notice of election (the “New Theater
Notice of Election”) to Digiplex.
 
 
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(c)      If the Company (by a Start Media Vote pursuant to Section 5.06) accepts
such offer by delivery of a New Theater Notice of Election in accordance with
Section 3.01(b), the Company shall be entitled to acquire any or all of such
Offered New Theaters, and all expenses related to the acquisition of such
Offered New Theaters, including without limitation, legal, accounting and due
diligence expenses related to such proposed acquisition, shall be at the sole
expense of the Company.
 
(d)      Each Offered New Theater that is acquired by the Company will be
operated in a separate wholly-owned Company Subsidiary, and shall thereafter be
a Company Theater for the purposes hereof.  Each Company Subsidiary will enter
into a Management Agreement with Digiplex.
 
(e)      In the event that the Company declines the offer to acquire all of the
Offered New Theaters, then the Members hereby agree that such Offered New
Theaters may be acquired by Digiplex or any of its Affiliates without
restriction.  In the event that the Company shall have accepted the offer to
acquire less than all of the Offered New Theaters, then the Members hereby agree
that such Offered New Theaters as to which the Company did not accept the offer
may be acquired by Digiplex or any of its Affiliates without restriction.
 
(f)      In the event that the Company accepts the offer by delivery of a New
Theater Notice of Election in accordance with Section 3.01(b), and thereafter
abandons the acquisition of such Offered New Theaters, then the Members hereby
agree that such Offered New Theaters may be acquired by Digiplex or any of its
Affiliates; provided, however, that Digiplex again complies with the “right of
first refusal” process set forth in this Section 3.01, except that in any such
circumstance the New Theater Offer Period shall be seven (7) Business Days.
 
(g)      Except as set forth above, Digiplex agrees that it will not, and it
will cause its Affiliates not to, directly or indirectly, acquire any New
Theater, or hold any equity or financial interest in, or participate in the
management of any Person that acquires any New Theater; provided, however, that
Digiplex and its Affiliates shall be permitted to manage New Theaters for
unaffiliated third parties and, in connection therewith, receive customary
financial compensation, including incentives (similar in nature and calculation
methodology to compensation received by other operators in the movie theater
management industry), that may be calculated by reference to the revenues of
such New Theaters.
 
SECTION 3.02.  Fiduciary Duties; Corporate Opportunities.  This Agreement is not
intended to, and does not, create or impose any fiduciary duty on any of the
Members hereto or their respective Affiliates or Managers, except for
non-waivable provisions under the Law.  Further, the Members hereby waive, to
the fullest extent permitted by Law, any and all fiduciary duties that, absent
such waiver, may be implied by Law, and in doing so, recognize, acknowledge and
agree that their duties and obligations to one another and to the Company are
only as expressly set forth in this Agreement.  Additionally, but subject to
Section 3.01 above, each Member acknowledges that the other Members and the
Affiliates of such Members own and/or manage other businesses, including
businesses that may compete with the Company, the other Members and the
Managers.  Except as otherwise provided in Section 3.01 above and elsewhere in
this Agreement:
 
 
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(a)      Each Member and its Affiliates, and their respective officers,
directors, shareholders, partners, members, agents and employees, and each
Manager designated by such Member (collectively, a “Corporate Opportunities
Group”), shall not in any way be prohibited or restricted from engaging or
investing in, independently or with others, any business opportunity of any type
or description, including, without limitation, those business opportunities that
might be similar to the Company Business;
 
(b)      Neither the Company nor any Member or such Member’s Corporate
Opportunities Group shall have any right in or to such other business
opportunities of any other Member or such other Member’s Corporate Opportunities
Group or to the income or proceeds derived therefrom; and
 
(c)      Each Member and its Corporate Opportunities Group shall have the right
to hold any such business opportunity for its own account or to recommend such
opportunity to Persons other than the Company, any other Member or any Person in
such other Member’s Corporate Opportunities Group.
 
ARTICLE IV
MEMBERSHIP UNITS, CAPITAL CONTRIBUTIONS,
CAPITAL ACCOUNTS AND BUDGET
 
SECTION 4.01.  Classes of Units.  There shall be two (2) classes of Membership
Units, designated (a) Class A Units (the “Class A Units”) and (b) Class B Units
(the “Class B Units”).  The Class A Units and Class B Units shall have the
rights, powers and duties as are set forth in this Agreement.
 
SECTION 4.02.  Initial Capital Contributions.  iv)  In return for 650 Class A
Units of the Company, initially representing 65% of the issued and outstanding
Membership Units, Start Media has contributed to the Company $11,000,000 in
cash, such contribution having been unanimously agreed to be good and valuable
consideration for Start Media’s Class A Units by the Board of Managers and all
Members.
 
(b)      In return for 350 Class B Units of the Company, initially representing
35% of the issued and outstanding Membership Units, Digiplex has contributed to
the Company $5,500,000 in equivalent value in shares of Digiplex’s Class A
Common Stock, such contribution having been unanimously agreed to be good and
valuable consideration for Digiplex’s Class B Units by the Board of Managers and
all Members.  For purposes of this Section 4.02(b), Digiplex’s  Class A Common
Stock is valued at a price per share equal to the higher of (i) $5.49 or (ii)
90% multiplied by the volume weighted average price of Digiplex’s Class A Common
Stock for the thirty (30) trading day period immediately prior to the applicable
valuation date.
 
 
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SECTION 4.03.  Membership Units.  All Membership Units shall have identical
rights in all respects as all other Membership Units except as otherwise
specified in this Agreement.  Each Membership Unit shall be entitled to one (1)
vote on all matters on which holders of Membership Units are entitled to
vote.  Each Member hereby agrees that its interest in the Company and in its
Membership Units shall for all purposes be personal property.  The Membership
Units held by each Member are as set forth on Schedule 2.01. 
 
SECTION 4.04.  Additional Membership Units.  In the event additional Membership
Units shall be issued to a Member, or to any other Person or Membership Units
are sold or transferred to another Member or any other Person and such Person
shall be admitted as a Member in accordance with the terms hereof, the Chairman
shall amend Schedule 2.01 accordingly.
 
SECTION 4.05.  Budget.  v)  The Board of Managers has prepared and agreed upon a
consolidated operating budget for the Company and the Company Subsidiaries
through the Fiscal Year ending June 30, 2013 (the “Interim Budget”), which is
based upon the actual results of operations of the Company Theaters as set forth
in the financial statements for such Company Theaters for the nine-month period
ended September 30, 2012, prepared in accordance with GAAP and reviewed by
EisnerAmper and provided to the Board of Managers.  The Interim Budget is
attached hereto as Schedule 4.05.  Beginning for the Fiscal Year ending June 30,
2014, and for each subsequent Fiscal Year, not later than thirty (30) days prior
to the beginning of such Fiscal Year, Digiplex shall prepare and submit to the
Board of Managers for approval, a consolidated operating budget for the Company
and the Company Subsidiaries for such Fiscal Year (each, a “Subsequent
Budget”).  Each Subsequent Budget shall be in a form substantially similar to
the Interim Budget.  The Interim Budget and any Subsequent Budget are referred
to as an “Approved Budget.”  If the Board of Managers cannot agree on a
Subsequent Budget for the Company with respect to any Fiscal Year, the Members
shall fund each category of operating expenses of the Company in an amount that
is equal to the amount of such category of operating expenses set forth in the
previous Approved Budget or the Interim Budget, as the case may be, increased by
five percent (5%).
 
(b)      At the conclusion of the Fiscal Year ending June 30, 2014, and at the
conclusion of each Fiscal Year thereafter, the actual results of the operations
of the Company Theaters shall be compared to the budgeted results for such
Company Theaters that were contained in the Approved Budget for such Fiscal
Year.  If, and only if, it is determined at the conclusion of any such Fiscal
Year that the TLCF for the Company Theaters for such Fiscal Year was less than
90% of the TLCF set forth in the Approved Budget for such Fiscal Year (the
“Shortfall”), then the Board of Managers shall meet to discuss such results and
the reasons and circumstances that contributed to any such Shortfall in an
effort to determine what changes, if any, should be made to the Approved Budget
for the then current Fiscal Year in light of the Shortfall.  If, after a period
of thirty (30) days shall have elapsed since the actual TLCF for the immediately
preceding Fiscal Year shall have been determined, the Board of Managers still
remain unable to agree as to whether the Approved Budget for the then current
Fiscal Year should remain unchanged or should be modified on account of the
Shortfall, the Members shall submit the disagreements regarding such matters to
mediation within the New York City metropolitan area by an independent,
professional and impartial third party chosen by the Members and accredited by
JAMS.  If after the expiration of ninety (90) days from the selection of a
mediator the Board of Managers is still unable to resolve the differences with
respect to the Approved Budget, then the Company shall engage an independent
investment banking firm to assist the Company to effect a Company Sale,  the
Members shall cooperate in good faith to effect a Company Sale, and the Company
shall be dissolved in accordance with Article X.
 
 
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SECTION 4.06.  Additional Funding.  vi)  In the event that the Board of Managers
determines that additional capital is required to acquire any New Theater or
otherwise to support the operations of the Company, such capital will be
obtained through any one or a combination of the following means, at the
election of the Board of Managers; provided, however, that Start Media shall be
required to fund such additional Capital Contributions in an aggregate amount
not to exceed $9,000,000 pursuant to Section 4.06(b); provided, further,
however, that Digiplex shall have the right to fund all or a portion of such
additional capital through additional Capital Contributions pursuant to Section
4.06(b):
 
(i)           subject to Section 5.05, revolving credit or other loan facilities
provided by unrelated Persons (such as banks or other lending institutions);
 
(ii)           subject to Section 5.05, cash advances or other credit or loan
facilities provided by the Members or their Affiliates; or
 
(iii)           additional Capital Contributions by the Members.
 
(b)      In the event that the Board of Managers determines that additional
capital is require to acquire any New Theaters or to fund the operations of the
Company and the Company Subsidiaries as set forth in an Approved Budget, such
capital shall be funded through one or more Capital Contributions by the Members
(a “Capital Call”), and the Members satisfying such Capital Call shall receive
additional Membership Units, at a price per Membership Unit equal to the
Additional Capital Call Price.  Start Media shall be required to fund such
additional Capital Contributions in an aggregate amount not to exceed
$9,000,000, subject to Digiplex’s right to fund any such Capital Call in an
amount not to exceed the Maximum Digiplex Capital Call Amount (as defined below)
for such Capital Call.  In exchange for any such additional Capital
Contributions (i) by Start Media, Start Media shall receive additional Class A
Units and (ii) by Digiplex, Digiplex shall receive additional Class B
Units.  The Chairman shall notify each Member of the Capital Contribution to be
made pursuant to this Section 4.06 by delivering written notice to each Member
specifying (A) the aggregate amount of the Capital Call required at such time,
(B) the Additional Capital Call Price, as determined in good faith by the Board
of Managers, (C) the maximum amount of such Capital Call that Digiplex shall be
entitled to fund (which shall be an amount such that, after the funding of such
Capital Call by the Members, the total percentage interest of Digiplex does not
exceed 50%) (the “Maximum Digiplex Capital Call Amount”) and (D) the date of
which the Members are to fund such Capital Call, which shall be no earlier than
fifteen (15) days and no later than thirty (30) days after delivery of such
notice (the “Call Date”).  No later than five (5) days prior to the Call Date,
Digiplex shall notify the Company and Start Media of the amount, if any, of the
Maximum Digiplex Capital Call Amount which Digiplex intends to fund.  In the
event that the additional Capital Call is required to acquire one or more New
Theaters and the purchase price for such acquisition includes shares of Digiplex
Class A Common Stock, Digiplex may make such additional Capital Contribution
using shares of its Class A Common Stock, and the value of such contributed
Class A Common Stock shall be equal to the value placed on such Class A Common
Stock in the proposed acquisition of the New Theaters. Start Media and/or
Digiplex, as the case may be, shall fund the Capital Call on the Call Date.  In
the event that either Start Media or Digiplex shall dispute the Board of
Manager’s determination of Additional Capital Call Price, the number of
Membership Units received by any such Member in respect of such Capital Call
shall be adjusted upon the final determination of Additional Capital Call Price,
effective as of the Call Date.  Notwithstanding anything in this Agreement to
the contrary, any additional Capital Contributions made by Digiplex shall not
reduce Start Media’s commitment to make Capital Contributions (including Start
Media’s initial Capital Contribution in the amount of $11,000,000) aggregating
$20,000,000.
 
 
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SECTION 4.07.  Status of Capital Contributions.  vii)  No Member shall receive
any interest, salary or drawing with respect to its Capital Contributions or its
Capital Account or for services rendered on behalf of the Company or otherwise
in its capacity as a Member, except as otherwise specifically provided in this
Agreement.
 
(b)      The Members shall be liable only to make their Capital Contributions
pursuant to this Article IV, and no Member shall be required to lend any funds
to the Company or, after a Member’s Capital Contributions have been fully paid
pursuant to this Article IV, to make any additional capital contributions to the
Company.  No Member shall have any personal liability for the repayment of any
Capital Contribution of any other Member or Transferee.
 
SECTION 4.08.  Capital Accounts.  viii)  An individual Capital Account shall be
established and maintained for each Member.
 
(b)      The Capital Account of each Member shall be maintained in accordance
with the following provisions:
 
(i)           to each Member’s Capital Account there shall be credited all such
Member’s Capital Contributions, such Member’s distributive share of Net Profits,
any items in the nature of income or gain that are specially allocated to such
Member pursuant to Article VI and the amount of any Company liabilities that are
assumed by such Member or that are secured by any Company assets distributed to
such Member;
 
(ii)           to such Member’s Capital Account there shall be debited the
amount of cash and the Asset Value of any Company assets distributed to such
Member pursuant to any provision of this Agreement, such Member’s distributive
share of Net Losses, any items in the nature of deductions or losses that are
specially allocated to such Member pursuant to Article VI and the amount of any
liabilities of such Member that are assumed by the Company or that are secured
by any property contributed by such Member to the Company;
 
(iii)           in the event all or some of a Member’s interest in the Company
is sold in accordance with Article IX, the Transferee shall succeed to the
Capital Account of the assignor to the extent it relates to the transferred
interest; and
 
 
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(iv)           no Member shall be required to pay to the Company or to any other
Member or Person any deficit in such Member’s capital account upon dissolution
of the Company or otherwise.
 
ARTICLE V
BOARD OF MANAGERS; MANAGERS
AND OFFICERS
 
SECTION 5.01.  Management of the Company.  The business, affairs and management
of the Company shall be vested in the Board of Managers (the “Board of
Managers”), which may from time to time by resolution delegate authority to the
Officers or to others to act on behalf of the Company.  Except as expressly set
forth in this Agreement, the Managers serving on the Board of Managers, shall
have the sole and exclusive power to do any and all acts necessary or convenient
to or for the furtherance of the purposes described herein, including all
powers, statutory or otherwise, possessed by managers under the Act.
 
SECTION 5.02.  Board of Managers.  (a)  Each Member shall appoint one or more
individuals to act on its behalf at meetings of the Board of Managers (each a
“Manager”).  The total number of Managers that shall be entitled to attend Board
of Managers meetings shall be four (4), (i) of whom two(2) shall be designated
by Start Media (the “Start Media Managers”) and (ii) of whom two (2) shall be
designated by Digiplex (the “Digiplex Managers”).  The Board of Managers shall
select a chairman (the “Chairman”) who shall preside over meetings of the Board
of Managers but who shall have no other special powers or authority with respect
to the Board of Managers unless otherwise approved by Majority Vote.  The
initial Start Media Managers shall be Michael J. Maher and Vinay S. Kolla; the
initial Digiplex Managers shall be A. Dale Mayo and Warren H. Colodner; and the
initial Chairman shall be A. Dale Mayo.
 
           (b) The presence of at least one (1) Start Media Manager and one (1)
Digiplex Manager shall constitute a quorum.  A quorum must exist at all times of
a meeting, including the reconvening of any meeting that has been adjourned, for
any action taken at such meeting to be valid.  Subject to Section 5.05 and
Section 5.06, all decisions of the Board of Managers shall be taken by a
majority of the Managers present at such meeting at which a quorum exists for
such decision or action to be valid.  One (1) Digiplex Manager present at a
meeting of the Board of Managers at which a quorum exists shall be entitled to
cast, in addition to such Digiplex Manager’s own vote, one vote for any absent
Digiplex Manager.  One (1) Start Media Manager present at a meeting of the Board
of Managers  at which a quorum exists shall be entitled to cast, in addition to
such Start Media Manager’s own vote, one vote for any absent Start Media
Manager.
 
SECTION 5.03.  Frequency of Meetings.  ix)  The Board of Managers shall meet no
less frequently than quarterly.  Special meetings of the Board of Managers shall
be called at the direction of one (1) or more Managers, and for reasonable cause
shown, upon not less than five (5) Business Days’ notice given by such
Manager.  Emergency meetings of the Board of Managers may be held upon not less
than one (1) Business Day’s telephone notice specifying in reasonable detail the
nature of such emergency (to be confirmed by written fax notice) by any Manager.
 
 
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(b)      With respect to quarterly meetings and non-quarterly non-emergency
meetings, not later than five (5) Business Days before each such meeting, the
Chairman shall deliver to each Manager, together with the notice of each such
meeting, an agenda specifying in reasonable detail the matters to be discussed
at the applicable Board of Managers meeting.  Any Manager that wishes to have
any additional matter discussed at any such meeting shall give to the Chairman
and each other Manager not later than two (2) Business Days prior to any such
meeting, notice of each matter it so wishes to discuss.
 
SECTION 5.04.   Removal of Directors; Vacancies.  (a) A Member may at any time
remove any Manager appointed by such Member pursuant to Section 5.02, with or
without cause.
 
(b) In the event a vacancy occurs on the Board of Managers as a result of the
retirement, removal, resignation or death of a Manager designated pursuant to
Section 5.02, such vacancy shall be filled by a person designated by the Member,
the retirement, removal, resignation or death of whose designee or nominee
created the vacancy.
 
SECTION 5.05.  Majority Vote of Board of Managers Required.  The Board of
Managers shall have authority with respect to all aspects of the operation of
the Company.  Without limiting the generality of the foregoing, the Company
shall not (and shall cause each Company Subsidiary not to) take any of the
following actions except pursuant to a Majority Vote:
 
(a)      the amendment or restatement of the Certificate or this Agreement or
the constituent documents of any Company Subsidiary (including any change in the
number of, or method of designating, Managers on the Board of Managers);
 
(b)      the authorization, issuance, sale, acquisition, repurchase or
redemption by the Company or any Company Subsidiary of any new or existing
Membership Units or other equity interest (or profits interest, option, warrant,
conversion or similar right with respect to any equity interest) in or of the
Company or any Company Subsidiary, including the sending of any notice
requesting Capital Contributions to a Member pursuant to Sections 4.06;
 
(c)      the declaration, making or payment of any dividend, distribution or
transfer (whether in cash, securities or other property) to the Members (other
than Tax Distributions required to be paid pursuant to Section 7.03);
 
(d)      the approval of any Liquidity Event;
 
(e)      other than as specifically provided in an Approved Budget, the
incurrence, issuance, assumption, guarantee or refinancing of any indebtedness
for borrowed money by the Company or any Company Subsidiary, other than (i)
trade accounts of the Company or any Company Subsidiary incurred in the ordinary
course of business and (ii) any guarantee by the Company of any indebtedness or
obligation of a Company Subsidiary;
 
 
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(f)      the creation or acquisition of, or investment in, any Company
Subsidiary or any other Person or the entering of any partnership, consortium,
joint venture or other similar enterprise;
 
(g)      authorize the execution of definitive documentation with respect to any
New Theater offered to the Company by Digiplex with respect to which the Company
exercised its “right of first refusal” pursuant to Section 3.01;
 
(h)      the acquisition of any New Theater (other than any New Theater covered
by the “right of first refusal” set forth in Section 3.01);
 
(i)      the acquisition of a substantial portion of the assets or business of
any Person or any division or line of business thereof or any other acquisition
of material assets;
 
(j)      the sale, transfer, lease, sublease, license or other disposition by
the Company or any Company Subsidiary to a third party of any Company Theater or
Company Subsidiary (or other equity interest in any other Person), or any
material property or asset, real, personal or mixed (including leasehold
interests and intangible assets);
 
(k)      the adoption of any Subsequent Budget or any material revision or
amendment thereto;
 
(l)      any capital expenditure or expense by the Company or any Company
Subsidiary not provided for any Subsequent Budget in an amount that, in the
aggregate, is in excess of 0.5% of the consolidated gross revenues of the
Company Theaters for the trailing twelve (12) month period;
 
(m)            the conduct by the Company or any Company Subsidiary of any
business other than, or the engagement by the Company or any Company Subsidiary
in any transaction not substantially related to, the Company Business;
 
(n)      sell, transfer, license, pledge or encumber any intellectual property
of the Company or any Company Subsidiary, other than licenses granted in the
ordinary course of business;
 
(o)      register any securities of the Company or any Company Subsidiary
pursuant to the Securities Act;
 
(p)      the Company or any Company Subsidiary entering into, amending, waiving
or terminating any agreement, arrangement or transaction (other than any
Management Agreement) with any Officer (other than any employment or similar
agreement, arrangement or transaction for payment of salary, bonus or
reimbursement of reasonable expenses), Affiliate or Member of the Company (or
any relative, beneficiary, employee, officer, director, manager or Affiliate of
such Person);
 
(q)      the commencement or settlement of any litigation or arbitration, other
than (i) for the collection of debts arising in the ordinary course of the
business or (ii) any application for an interim injunction or other interim
application which is urgently required and in the best interests of the Company
or any Company Subsidiary in circumstances where it is not reasonably
practicable to obtain prior consent; and
 
 
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(r)      the entering into of any contract, arrangement, understanding or other
similar agreement with respect to any of the foregoing (a)-(q).
 
SECTION 5.06.  Start Media Vote of Board of Managers Required.  The Company
shall not (and shall cause each Company Subsidiary not to) take any of the
following actions except pursuant to a Start Media Vote:
 
(s)      the determination of whether to exercise the “right of first refusal”
with respect to any New Theater offered to the Company pursuant to Section 3.01;
 
(t)      the Company or any Company Subsidiary entering into, amending, waiving
or terminating any Management Agreement; and
 
(u)      the entering into of any contract, arrangement, understanding or other
similar agreement with respect to any of the foregoing (a)-(b).
 
SECTION 5.07.  Action by Written Consent.  Any action required or permitted to
be taken by the Members or the Board of Managers, either at a meeting or
otherwise, may be taken without a meeting if the Members or the Managers, as the
case may be, by a unanimous vote of the Membership Units or unanimous vote of
the Managers, as the case may be, thereto in writing and the writing or writings
are filed with the minutes of proceedings of the Members or the Managers, as the
case may be.
 
SECTION 5.08.  Telephonic Meetings.  Managers may participate in a meeting of
the Board of Managers by means of a conference telephone or similar
communications equipment through which all persons participating in the meeting
can hear each other, and such participation in a meeting shall constitute
presence in person at such meeting.
 
SECTION 5.09.  Officers.  The Company shall have employees or agents who are
denominated as officers, as the Board of Managers may designate from time to
time (the “Officers”).  The Officers shall be subject to the authority of the
Board of Managers, and the Officers shall be responsible for implementing the
decisions of the Board of Managers and for conducting the ordinary and usual
business and affairs of the Company, subject to the policies and limitations
established by, and the supervision of, the Board of Managers and subject to the
terms of this Agreement.  The Officers shall keep the Board of Managers informed
as to all matters of concern to the Company.
 
ARTICLE VI
ALLOCATIONS; TAX MATTERS
 
SECTION 6.01.  Allocations.  x)  Except as provided in Section 6.01(b), the
Company’s Net Profits and Net Losses, subject to the special allocations
pursuant to Sections 6.02 and 6.03, shall be allocated to the Members for
purposes of determining the Capital Accounts in proportion to and in accordance
with the number of Membership Units held by each such Member, respectively, at
the time of such allocation.
 
 
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(b)      In any Liquidity Event Year, the Company’s Net Profits and Net Losses,
subject to the special allocations pursuant to Sections 6.02 and 6.03, shall be
allocated to the Members so as to cause, to the maximum extent possible, the
Capital Account balance of each Member to be equal to the amount that the Member
would receive if the Company sold all of its properties at that time for cash
equal to their then Asset Values, paid its liabilities and then distributed the
remaining proceeds in accordance with Section 10.04 hereof.
 
SECTION 6.02.  Special Allocations.  xi)  Minimum Gain Chargeback.  Except as
otherwise provided in Section 1.704-2(f) of the Regulations, notwithstanding any
other provision of this Article VI, if there is a net decrease in partnership
minimum gain during any fiscal year, each Member shall be specially allocated
items of Company income and gain for the fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to such Member’s share of the net
decrease in partnership minimum gain, determined in accordance with Regulations
Section l.704-2(g).  Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Member
pursuant thereto.  The items to be so allocated shall be determined in
accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the
Regulations.  This Section 6.02(a) is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
 
(b)      Partner Minimum Gain Chargeback.  Except as otherwise provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of
this Article VI, if there is a net decrease in partner nonrecourse debt minimum
gain attributable to a partner nonrecourse debt during any Fiscal Year, each
Member who has a share of the partner nonrecourse debt minimum gain attributable
to such partner nonrecourse debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specifically allocated items
of Company income and gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Member’s share of the net decrease in
partner nonrecourse debt minimum gain attributable to such partner nonrecourse
debt, determined in accordance with Section 1.704-2(i)(4) of the
Regulations.  Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto.  The items to be so allocated shall be determined in
accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the
Regulations.  This Section 6.02(b) is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be
interpreted consistently therewith.
 
(c)      Qualified Income Offset.  In the event any Member unexpectedly receives
any adjustments, allocations or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or l.704-l(b)(2)(ii)(d)(6) of
the Regulations, items of Company income and gain shall be specially allocated
to each such Member in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the Adjusted Capital Account Deficit of such
Member as quickly as possible, provided that an allocation pursuant to this
Section 6.02(c) shall be made only if and to the extent that such Member would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this Article VI have been tentatively made as if this Section 6.02(c)
were not in the Agreement.
 
 
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(d)      Gross Income Allocation.  In the event any Member has a deficit Capital
Account at the end of any fiscal year which is in excess of the sum of (i) the
amount such Member is obligated to restore pursuant to any provision of this
Agreement, and (ii) the amount such Member is deemed to be obligated to restore
pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Regulations, each such Member shall be specially allocated
items of Company income and gain in the amount of such excess as quickly as
possible; provided that an allocation pursuant to this Section 6.02(d) shall be
made only if and to the extent that such Member would have an Adjusted Capital
Account Deficit in excess of such sum after all other allocations provided for
in this Article VI have been made as if Section 6.02(c) and this Section 6.02(d)
were not in the Agreement.
 
(e)      Nonrecourse Deductions.  Nonrecourse deductions for any fiscal year
shall be allocated to the Members pro rata in accordance with the number of
Membership Units owned by such Member.
 
(f)      Partner Nonrecourse Deductions.  Partner nonrecourse deductions for any
Fiscal Year shall be specially allocated to the Member who bears the economic
risk of loss, or to the Members in the proportions in which they bear the
economic risk of loss, with respect to the partner nonrecourse debt to which
such partner nonrecourse deductions are attributable in accordance with
Section 1.704-2(i)(1) of the Regulations.
 
(g)      Net Loss Limitation.  The Net Losses and items of deduction or loss
allocated pursuant to Sections 6.01 and 6.02 shall not exceed the maximum amount
of Net Losses and items of deduction and loss that can be so allocated without
causing any Member to have an Adjusted Capital Account Deficit at the end of any
Fiscal Year.  All Net Losses and items of deduction or loss in excess of the
limitations set forth in this Section 6.02 shall be allocated to the Members who
do not have Adjusted Capital Account Deficits in proportion to their Adjusted
Capital Accounts.  To the extent that Members have been allocated Net Losses
pursuant to the previous sentence, prior to any allocation of Net Profits
pursuant to Section 6.01(a) such Members shall be allocated Net Profits pro rata
in proportion to such allocated Net Losses.
 
SECTION 6.03.  Curative Allocations.  The allocations set forth in Section 6.02
hereof (the “Regulatory Allocations”) are intended to comply with certain
requirements of the Regulations.  It is the intent of the Members that, to the
extent possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Company
income, gain, loss or deduction pursuant to this Section 6.03.  Therefore,
notwithstanding any other provision of this Article VI (other than the
Regulatory Allocations), the Members shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner they
determine appropriate so that, after such offsetting allocations are made, each
Member’s Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
this Article VI without regard to the Regulatory Allocations.  In exercising
their discretion under this Section 6.03, the Members shall take into account
future Regulatory Allocations under Section 6.02 that, although not yet made,
are likely to offset other Regulatory Allocations previously made under
Section 6.02.
 
 
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SECTION 6.04.  Tax Allocations.  xii)  In accordance with Code Section 704(c)
and the Regulations thereunder, income, gain, loss, and deduction with respect
to any property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its initial Asset Value (computed in accordance with the
definition of Asset Value).
 
(b)      In the event the Asset Value of any Company asset is adjusted pursuant
to subparagraph (ii) of the definition of Asset Value, subsequent allocations of
income, gain, loss, and deduction with respect to such asset shall take account
of any variation between the adjusted basis of such asset for federal income tax
purposes and its Asset Value in the same manner as under Code Section 704(c) and
the Regulations thereunder.
 
(c)      Any elections or other decisions relating to such allocations shall be
made by the tax matters Member in any manner that reasonably reflects the
purpose and intention of this Agreement.  Allocations pursuant to this
Section 6.04 are solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing, any Member’s
Capital Account or share of Net Profit, Net Loss, other items, or distributions
pursuant to any provision of this Agreement.
 
(d)      Except as otherwise provided in this Agreement, all items of Company
gain, loss, deduction, and any other allocations not otherwise provided for
shall be divided among the Members in the same proportions as they share Net
Profit or Net Loss, or amounts specially allocated pursuant to Section 6.02 or
6.03 hereof, as the case may be, for the fiscal year.
 
SECTION 6.05.  Tax Decisions.  The Company shall file as a partnership for
federal and state income tax purposes.  All elections required or permitted to
be made by the Company, and all other tax decisions and determinations relating
to federal, state or local tax matters shall be made by the tax matters Member,
in consultation with the Board of Managers and the Company’s attorneys and/or
accountants.  Tax audits, controversies and litigations shall be conducted under
the direction of the tax matters Member.  The tax matters Member shall submit to
the Board of Managers, for their review and comment, any settlement or
compromise offer with respect to any disputed item of income, gain, loss,
deduction or credit of the Company.  Digiplex shall be the initial tax matters
Member within the meaning of Section 6231(a)(7) of the Code.  The tax matters
Member shall furnish to the Company which shall furnish to the other Members a
copy of all notices or other written communications received by the tax matters
Member from the Internal Revenue Service or any state of local taxing
authority.  The tax matters Member shall cause all tax returns of the Company to
be timely filed.  Copies of such returns shall be kept at the Company’s
principal place of business or at such other place as the tax matters Member
shall determine and shall be available for inspection by the Members or their
duly authorized representatives during regular business hours.  The tax matters
Member shall distribute to the Company which shall distribute to each of the
Members, as soon as practicable after the end of the fiscal year of the Company,
information with respect to the Company necessary for each Member to prepare its
Federal, state and local tax returns.
 
 
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ARTICLE VII
DISTRIBUTIONS
 
SECTION 7.01.  Distribution of Net Cash Flow From Operations.  Subject to
Sections 7.02 and 7.03, the Board of Managers will cause the Company to make
distributions of Net Cash Flow From Operations on at least an annual basis as of
June 30 of each year, and at such other times as determined by the Board of
Managers pursuant to Section 5.05, to the Members, in the following priority:
 
(a)           first, to Start Media (or its Transferee) until Start Media (or
its Transferee) has received distributions which equal Start Media’s (or its
Transferee’s) Class A Preferred Return;
 
(b)           second, to Digiplex (or its Transferee) until Digiplex (or its
Transferee) has received distributions which equal Digiplex’s (or its
Transferee’s) Class B Preferred Return; and
 
(c)           thereafter, pro rata to each Member in accordance with the number
of Membership Units held by such Member as set forth on Schedule 2.01.
 
SECTION 7.02.  Liquidity Event Distribution.  Upon the occurrence of a Liquidity
Event, the Board of Managers will cause the Company to make distributions of
Liquidity Event Net Proceeds to the Members, in the following priority:
 
(a)      first, to Start Media (or its Transferee) until Start Media (or its
Transferee) has received distributions which equal Start Media’s (or its
Transferee’s) Class A Preferred Return;
 
(b)      second, to Start Media (or its Transferee) until Start Media (or its
Transferee) has received distributions which equal Start Media’s (or its
Transferee’s) Class A Capital Contribution;
 
(c)      third, to Digiplex  (or its Transferee) until Digiplex  (or its
Transferee) has received distributions which equal Digiplex’s  (or its
Transferee’s)  Preferred Return;
 
(d)      fourth, to Digiplex (or its Transferee) until Digiplex (or its
Transferee) has received distributions which equal Digiplex’s (or its
Transferee’s) Class B Capital Contribution; and
 
(e)      thereafter, pro rata to each Member in accordance with the number of
Membership Units held by such Member as set forth on Schedule 2.01.
 
 
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SECTION 7.03.  Tax Distributions.  The Company shall make quarterly
distributions, to the extent of available cash, to each Member, in an amount
equal to such Member’s share, pro rata in accordance with their respective
Membership Units, of the Company’s Assumed Tax Liability (“Tax
Distributions”).  For the purposes of this Section 7.03, “Assumed Tax Liability”
means the product of the Company’s taxable income through the payment date
multiplied by the highest combined maximum effective federal, state and local
income tax rate applicable to any Member.  The Board of Managers will make a
good faith estimate of the Assumed Tax Liability each quarter, and cash
distributions will be made, the extent of available cash, to the Members in an
amount equal to the appropriate percentage of such estimate adjusted for prior
distributions on April 14, June 14, September 14 and December 14 of such
year.  A final determination of Assumed Tax Liability will be made no later than
March 1 of the year succeeding the year with respect to which such Assumed Tax
Liability is being calculated, with adjusting payments to be made to or from the
Company by March 15 of such year.  Distributions not made for any reason
pursuant to this Section 7.03 shall accumulate without interest until paid.  In
addition, any distribution made by the Company in excess of the required
distributions for a required distribution date shall be applied towards the next
scheduled distribution.
 
SECTION 7.04.  Distribution Rules.  xiii)  All amounts withheld pursuant to the
Code or any provision of any state or local tax Law with respect to any payment,
distribution or allocation by the Company to the Members shall be treated as
amounts distributed to the Members pursuant to this Article VII for all purposes
of this Agreement.  The Company is authorized and directed to withhold from
distribution, or with respect to allocations, to the Members and to pay over to
any Federal, state or local government any amounts required to be so withheld
pursuant to the Code or any provision of any other Federal, state or local Law
and shall allocate such amounts to those Members with respect to which such
amounts were withheld.  Promptly upon learning of any requirement under any
provision of the Code or any other applicable Law requiring the Company to
withhold any sum from a distribution to a Member or to make any payment to any
taxing authority in respect of such Member, the Company shall give written
notice to such Member of such requirement and, if practicable and if requested
by such Member, shall cooperate with such Member in all lawful respects to
minimize or to eliminate any such withholding or payment.
 
(b)      A Member shall not have the status of, and is not entitled to the
remedies available to, a creditor of the Company with regard to distributions
that such Member becomes entitled to receive pursuant to this Agreement and the
Act.
 
SECTION 7.05.  Limitations on Distribution.  Notwithstanding any provision to
the contrary contained in this Agreement, the Company shall not make a
distribution to any Member on account of its Membership Units if such
distribution would violate Section 18-607 of the Act or other applicable Law.
 
ARTICLE VIII
BOOKS AND RECORDS; FINANCIAL STATEMENTS
 
SECTION 8.01.  Books and Records; Financial Statements.  xiv)  The Company shall
prepare and maintain separate books of account for the Company that shall show a
true and accurate record of all costs and expenses incurred, all charges made,
all credits made and received and all income derived in connection with the
operation of the Company Business in accordance with GAAP consistently applied,
and, to the extent inconsistent therewith, in accordance with this
Agreement.  Such books of account, together with a certified copy of this
Agreement and of the Certificate, shall at all times be maintained at the
principal place of business of the Company and shall be open to inspection and
examination at reasonable times by each Member and its duly authorized
representatives for any purpose reasonably related to such Member’s interest in
the Company.  In addition, any Member shall be entitled to visit any of the
Company Theaters or other facilities of the Company and the Company Subsidiaries
at any time.  The books of account and the records of the Company shall be
audited by and reported upon as of the end of each Fiscal Year by a firm of
independent certified public accountants that shall be selected by the Board of
Managers (the “Auditors”).
 
 
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(b)      The following financial information, prepared in accordance with GAAP
and at the Company’s expense, shall be transmitted by Digiplex to the Board of
Managers and to each other Member at the times hereinafter set forth:
 
(i)           Within ninety (90) days after the close of each Fiscal Year, the
following financial statements, audited by and certified to by the Auditors:
 
(A)   the consolidated balance sheet of the Company as of the close of such
Fiscal Year;
 
(B)   a statement of Company Net Profits and Net Losses for such Fiscal Year;
 
(C)   a statement of the Company’s cash flows for such Fiscal Year; and
 
(D)   a statement of such Member’s Capital Account as of the close of such
Fiscal Year, and changes therein during such Fiscal Year.
 
(ii)           Within sixty (60) days after the close of each Fiscal Year, a
statement indicating such Member’s share of each item of Company income, gain,
loss, deduction or credit for such Fiscal Year for income tax purposes.
 
(iii)           As soon as available and in any event within forty-five (45)
days after the end of each three-month period, consolidated balance sheets of
the Company as of the end of such three-month period and statements of income
and Company Net Profits and Net Losses for the period commencing at the end of
the previous Fiscal Year and ending with the end of such three-month period,
reviewed by the Auditors.
 
(c)      As soon as practicable and in any event within fifteen (15) days
following the end of each calendar month, Digiplex shall (at Digiplex’s cost)
deliver to each other Member a monthly profit and loss statement for each
Company Theater (indicating actual vs. budget).
 
(d)      Each Member shall provide to the Company upon request tax basis
information about contributed assets and other tax information reasonably
requested by the Company.
 
SECTION 8.02.  Reporting Requirements.  The Company shall furnish or cause to be
furnished to each Manager:
 
(a)      as soon as possible and in any event within ten (10) days after the
Company or any Company Subsidiary has received notice of the occurrence of any
default or event of default continuing on the date of such statement under any
agreement relating to any material obligation of the Company or any Company
Subsidiary, a statement of the Company setting forth details of such default or
event of default and the action which the Company or any Company Subsidiary has
taken and proposes to take with respect thereto;
 
 
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(b)      promptly after the sending or filing thereof, copies of all reports
that the Company sends to any of its creditors, and copies of all tax returns
that the Company files with any federal or state taxing authority;
 
(c)      within fifteen (15) days of the filing of the Company’s federal tax
return (Federal Form 1065), a copy of Schedule K-1 of Federal Form 1065
reporting such Member’s allocable share of Net Profits, Net Losses and other
items of income, gain, deductions or loss for such Fiscal Year, and, from time
to time, such additional information as the Member may reasonably require for
tax purposes; and
 
(d)      such other information regarding the condition or operations, financial
or otherwise, of the Company or any Company Subsidiary as any Member may from
time to time reasonably request.
 
ARTICLE IX
 
RESTRICTIONS ON TRANSFER
 
SECTION 9.01.  Certificates; Legends.  xv)  Ownership of Membership Units shall
be evidenced by certificates.  The Company shall issue one or more Membership
Unit certificates to each Member, which Membership Unit certificates need not
bear a seal of the Company but shall be signed by a Manager or other Person
authorized by the Board of Managers to sign such Membership Unit certificates
certifying the number, class and series of Membership Units represented by such
certificate.  The Company shall affix to each certificate evidencing Membership
Units issued to Members a legend in substantially the following form:
 
“THE MEMBERSHIP UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933 OR AN EXEMPTION THEREFROM AND, IN EACH CASE, IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.
 
THE MEMBERSHIP UNITS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN AN OPERATING AGREEMENT DATED AS OF
DECEMBER 10, 2012, AS IT MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.  NO REGISTRATION OF
TRANSFER OF THESE MEMBERSHIP UNITS WILL BE MADE ON THE BOOKS OF THE COMPANY
UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH.”
 
 
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(b)      In the event that the Membership Unit certificates are not required
under applicable securities Laws to bear the legend in the first paragraph of
Section 9.01(a), the Company shall, upon the written request of the holder
thereof, issue to such holder a new certificate evidencing such Membership Units
without such legend; provided, that before issuing a new certificate omitting
such legend, the Company may request an opinion of counsel reasonably
satisfactory to it to the effect such legend is no longer required by such
Laws.  In the event that the Membership Units shall cease to be subject to the
restrictions on transfer set forth in this Agreement, the Company shall, upon
the written request of the holder thereof, issue to such holder a new
certificate evidencing such Membership Units without the legend required by the
second paragraph of Section 9.01(a).
 
SECTION 9.02.  Certain Restrictions on Sale or Encumbrance.  xvi)  Until
December 10, 2015, no Member shall make any Sale of, or create, incur or assume
any Encumbrance with respect to, any Membership Units Beneficially Owned by such
Member, other than any Sale to a Permitted Transferee, without the prior written
consent of all other Members.
 
(b)      From December 10, 2015 and during the effectiveness of this Agreement,
no Member shall make any Sale of, or create, incur or assume any Encumbrance
with respect to, any Membership Units Beneficially Owned by such Member, other
than any Sale to a Permitted Transferee, or any Sale in accordance with this
Article VI.
 
(c)      No Sale of Membership Units to a Permitted Transferee shall be
effective if a purpose or effect of such transfer shall have been to circumvent
the provisions of this Section 9.02.  Each Member shall remain responsible for
the performance of this Agreement by each Permitted Transferee of such Member to
which Membership Units are transferred.  If any Permitted Transferee to which
Membership Units are transferred pursuant to Section 9.02(a) ceases to be a
Permitted Transferee of the Member from which or whom it acquired such
Membership Units pursuant to such provision, such Person shall reconvey such
Membership Units to such transferring Member immediately before such Person
ceases to be a Permitted Transferee of such transferring Member so long as such
Person knows of its upcoming change of status immediately prior thereto.  If
such change of status is not known until after its occurrence, the former
Permitted Transferee shall make such transfer to such transferring Member as
soon as practicable after the former Permitted Transferee receives notice
thereof.
 
(d)      In the case of a Sale or attempted Sale of Membership Units or other
interest in the Company contrary to the provisions of the Agreement, the parties
engaging or attempting to engage in such Sale shall indemnify and hold harmless
the Company and each of the Members from all losses that such indemnified
Persons may incur (including, without limitation, incremented tax liability and
lawyers’ fees and expenses) in enforcing the provisions of this Agreement.
 
 
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SECTION 9.03.  Improper Sale or Encumbrance.  Any attempt not in compliance with
this Agreement to make any Sale of, or create, incur or assume any Encumbrance
with respect to, any Membership Units shall be null and void and of no force and
effect, the purported transferee shall have no rights or privileges in or with
respect to the Company, and the Company shall not give any effect in the
Company’s records to such attempted Sale or Encumbrance.
 
SECTION 9.04.  Rights of First Refusal.  xvii)  If at any time during the term
of this Agreement any Member receives from or otherwise negotiates with a Third
Party a bona fide offer (an “Offer”) to purchase for cash, Cash Equivalents or
Marketable Securities any Membership Units Beneficially Owned or held by such
Member, and such Member intends to sell such Membership Units to such Third
Party, such Member (the “Prospective Seller”) shall provide the Company and each
Member other than the Prospective Seller (each, an “Other Member”) with written
notice of such Offer (an “Offer Notice”).  The Offer Notice shall identify the
Third Party making the Offer, the number of Membership Units covered by the
Offer (the “Offered Membership Units”), the price per Membership Unit at which a
Sale is proposed to be made (the “Offer Price”), the form of consideration
proposed to be paid and all other material terms and conditions of the Offer.
 
(b)      If the Offer Price includes:
 
(i)           any Marketable Securities, the value of such securities shall be
determined by calculating a volume-weighted average of the closing prices of
such securities over the ten (10) trading-day period ending on the Price
Determination Date on the market with the largest trading volume in such
securities; or
 
(ii)           any Cash Equivalents, the value of such Cash Equivalents shall be
determined by reference to the closing price thereof on the market with the
largest trading volume in such securities on the Price Determination Date.
 
(c)      The receipt of an Offer Notice by the Other Members from a Prospective
Seller shall constitute an offer by such Prospective Seller to sell to such
other Members any or all of the Offered Membership Units at the Offer Price pro
rata, in accordance with the following formula.  Each such Other Member shall be
entitled to purchase, upon the terms specified in the Offer Notice, a number of
Membership Units equal to (x) the number of Offered Membership Units plus the
number of Membership Units being sold pursuant to Section 9.05 hereof, if any,
multiplied by (y) a fraction, the numerator of which is the number of Membership
Units Beneficially Owned by such Other Member and the denominator of which is
the number of Membership Units Beneficially Owned by all Other Members who wish
to purchase Offered Membership Units.  If any Other Member wishes to purchase
less than all the Membership Units such Other Member is entitled to purchase in
accordance with the preceding sentence, the Membership Units such Other Member
declines to purchase shall be allocated among the Other Members who wish to
purchase such additional Membership Units according to the same formula, mutatis
mutandis.  Such offer shall remain open and irrevocable until expiration of
thirty (30) days after receipt of such Offer Notice by the Other Members (the
“Offer Period”).  Each Other Member who wishes may accept the offer by sending a
written notice of election (the “Notice of Election”) to the Prospective Seller
and the Company with a copy to the Other Members prior to expiration of the
Offer Period.  The Notice of Election shall specify the maximum number of
Membership Units an Other Member is willing to purchase pursuant to this
Section 9.04, if any, the number of Membership Units it wishes and is entitled
to sell pursuant to Section 9.05, if any, and any other terms and conditions not
inconsistent with this Agreement.  Upon expiration of the Offer Period, the
Prospective Seller shall allocate in accordance with this Article IX any
Membership Units to be sold pursuant to this Article IX and promptly notify each
Member of its determination.
 
 
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(d)      If any Other Member accepts the Prospective Seller’s offer in
accordance with Section 9.04(c) (an “Accepting Party”), and the entire Offered
Membership Units shall be purchased by the Other Members, such Accepting Party
shall purchase from the Prospective Seller, and the Prospective Seller shall
sell to such Accepting Party, such number of Offered Membership Units as to
which such Accepting Party shall have accepted the Prospective Seller’s
offer.  The price per Membership Unit to be paid by such Accepting Party shall
be the Offer Price specified in the Offer Notice, payable in accordance with the
terms of the Offer  In the event the Other Members have not elected to purchase
the entirety of the Offered Membership Units, the Prospective Seller may sell
all of the Offered Membership Units in accordance with Section 9.04(f) as
Remaining Membership Units.
 
(e)      The Prospective Seller and each Accepting Party shall select, for
consummation of the Sale of Offered Membership Units to such Accepting Party, a
date not later than thirty (30) days after expiration of the Offer Period.  At
the consummation of such Sale, the Prospective Seller shall, against delivery by
the relevant Accepting Party of the Offer Price multiplied by the number of
Membership Units being purchased by such Accepting Party, (i) deliver to the
Accepting Party certificates evidencing the Offered Membership Units being sold
plus the Membership Units being sold pursuant to Section 9.05, if any, duly
endorsed in blank or accompanied by written instruments of transfer in form
satisfactory to such Accepting Party duly executed by the Prospective Seller (or
the selling Other Member, as the case may be) free and clear of any and all
Encumbrances (other than this Agreement), and (ii) assign all its rights under
this Agreement with respect to the Offered Membership Units being sold pursuant
to an instrument of assignment reasonably satisfactory to such Accepting Party.
 
(f)      In the event that (i) the Prospective Seller shall not have received
Notices of Election indicating a desire to purchase, in the aggregate, all the
Offered Membership Units prior to expiration of the Offer Period (in which case
the Prospective Seller, pursuant to Section 9.04(d), shall not be obligated to
sell any of the Offered Membership Units to the Other Members) or (ii) an
Accepting Party shall have given a Notice of Election to the Prospective Seller
but shall have failed to consummate, other than as a result of the fault of the
Prospective Seller, a purchase of the Offered Membership Units he elected to
purchase in such Notice of Election within the time frame specified in paragraph
(e) above (and no Other Member shall have indicated an interest upon any such
failure to buy such Membership Units within ten (10) Business Days of their
receipt of a notice of such failure from the Prospective Seller), then nothing
in this Section 9.04 shall limit the right of the Prospective Seller to make
thereafter a Sale of, or create an Encumbrance on, all Offered Membership Units
not accepted for purchase by the Company or the Other Members pursuant to a
Notice of Election (the “Remaining Membership Units”); provided that
 
 
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(A)                 the total number of Membership Units sold by the Prospective
Seller for its own account (i.e., not including Membership Units owned by Other
Members) to the Third Party who made the Offer shall be not more than the number
of Offered Membership Units specified in the Offer Notice; and
 
(B)                 all the Membership Units that are sold or otherwise disposed
of by the Prospective Seller are sold (1) within thirty (30) days after
expiration of the Offer Period, (2) at an amount not less than the Offer Price
included in such Offer Notice, (3) on the terms specified in the Offer Notice
and (4) to the Third Party that made the Offer.
 
(g)      In the event that each Other Member and the Company shall have received
an Offer Notice from a Prospective Seller, the Prospective Seller shall not have
received Notices of Election indicating a desire to buy all the Offered
Membership Units prior to the expiration of the Offer Period and such
Prospective Seller shall not have sold the Remaining Membership Units before the
expiration of the period specified in Section 9.04(f)(B) above, then such
Prospective Seller shall not give another Offer Notice for a period of one year
from the day the Offer Notice was delivered.
 
(h)      Anything in this Section 9.04 to the contrary notwithstanding, the
provisions of this Section 9.04 shall not be applicable to any Sale to a
Permitted Transferee.
 
SECTION 9.05.  Right to Participate in Certain Dispositions.  xviii)  If, at any
time during the term of this Agreement, a Prospective Seller shall determine to
sell Membership Units representing 10% or more of the Company’s then issued and
outstanding Membership Units pursuant to an Offer, the Prospective Seller shall
provide the Offer Notice defined in Section 9.04 to the Company and each of the
Other Members.  Each of the Other Members shall have the right and option, for a
period of thirty (30) days concurrent with the Offer Period specified in
Section 9.04, to sell, pursuant to the Offer, up to the same percentage of
Membership Units held or owned by it as the percentage of Membership Units held
or owned by such Prospective Seller as such Prospective Seller proposes to sell;
provided that such right shall vest only (i) if less than all the Offered
Membership Units are sold to the Other Members pursuant to Section 9.04 and the
Prospective Seller still intends to consummate a Sale to the Third Party
pursuant to the Offer or (ii) the Prospective Seller receives Notices of
Election which, in the aggregate, represent offers to buy all the Offered
Membership Units and all the Membership Units tendered by Other Members pursuant
to this Section 9.05.  Each Other Member desiring to exercise such right shall,
prior to the expiration of the Offer Period, provide the Prospective Seller and
the Other Members with a Notice of Election specifying the number of Membership
Units which such Other Member has an interest in selling pursuant to the Offer.
 
(b)      If the Third Party making the Offer is unwilling to buy all the Offered
Membership Units or Remaining Membership Units, as the case may be, plus all the
Membership Units tendered by Other Members in their Notices of Election, then
the Prospective Seller and each Other Member who indicated the desire to sell in
its Notice of Election shall be entitled to sell a number of Membership Units
equal to (x) the number of Membership Units the Third Party offeror is willing
to buy (which shall not be less than the number of Offered Membership Units),
multiplied by (y) a fraction, the numerator of which is the number of Membership
Units owned by such Other Member or the Prospective Seller, as the case may be,
and the denominator of which is the sum of the total number of Membership Units
owned by all Other Members who wish to sell Membership Units pursuant to the
Offer and the Prospective Seller.  If any Other Member wishes to sell less than
all the Membership Units it is entitled to sell in accordance with the preceding
sentence, the Membership Units it declines to sell shall be allocated among the
Prospective Seller and the Other Members who wish to sell additional Membership
Units according to the same formula, mutatis mutandis.  The Prospective Seller
shall not effect the Sale of any Membership Units pursuant to the Offer unless
all the Offered Membership Units and all of the Membership Units tendered to the
Prospective Seller and entitled to be sold pursuant to this Section 9.05 are
simultaneously sold.
 
 
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(c)      As promptly as practicable after the consummation of any Sale or other
disposition of Membership Units to the Third Party pursuant to this
Section 9.05, the Prospective Seller shall remit to each of the Other Members
the total sales price of the Membership Units of such Other Members sold
pursuant thereto (taking into account the rights, powers and duties of the
classes of Membership Units sold, but without applying a minority discount).
 
(d)      If at the end of the Offer Period any Other Member shall not have given
a Notice of Election indicating an interest in selling all of the Membership
Units such Other Member would have been entitled to sell in accordance with
Section 9.05(a) above, such Other Member shall be deemed to have waived all its
rights under this Section 9.05 with respect to the Sale pursuant to the Offer
for such Membership Units.
 
(e)      Except as expressly provided in this Section 9.05, no Prospective
Seller shall have any obligation to any Other Member with respect to the Sale or
other disposition of any Membership Units owned by such Other Member in
connection with this Section 9.05.  Anything herein to the contrary
notwithstanding and irrespective of whether any Notice of Election shall have
been given, no Prospective Seller shall have any obligation to any Other Member
to sell or otherwise dispose of any Offered Membership Units pursuant to this
Section 9.05 as a result of any decision by such Prospective Seller not to
accept or consummate any Offer or Sale or other disposition with respect to the
Offered Membership Units (it being understood that  any and all such decisions
shall be made by such Prospective Seller in its sole discretion).  No Other
Member shall be entitled to sell or otherwise dispose of Membership Units
directly to any Third Party pursuant to an Offer (it being understood that all
such Sales and other dispositions shall be made only on the terms and pursuant
to the procedures set forth in this Article IX).
 
(f)      Anything in this Section 9.05 to the contrary notwithstanding, the
provisions of this Section 9.05 shall not be applicable to any transfer to a
Permitted Transferee.
 
SECTION 9.06.  Start Media Put Right Upon Digiplex Change of Control.  xix)  In
the event of a Change of Control of Digiplex, Digiplex will, promptly following
such Change of Control, notify each other Member in writing thereof, setting
forth the date and circumstances of the Change of Control (including the amount
and form of consideration paid or payable in connection with such Change of
Control and the identity of the Third Party purchaser(s)).  During the ninety
(90) day period commencing on the date of receipt of such notice, Start Media
(or its Transferee) shall have the right to require Digiplex (or its successor
entity) to purchase all, but not less than all, of such Member’s Membership
Units (the “Put Right”) at a purchase price equal to the amount such Member
would receive upon a dissolution of the Company pursuant to Section 10.04 at the
valuation of the Company implied by such Change of Control.  Any Member electing
to exercise the Put Right pursuant to the provisions of this Section 9.06 must
give written notice of such election to Digiplex or its successor entity  within
the time period specified in this Section 9.06(a).
 
 
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(b)      Following the election by the applicable Member to exercise the Put
Right, Digiplex or its successor entity shall deliver the purchase price in cash
(or such other form of consideration paid in the Change of Control transaction)
to the selling Member(s) at a closing on a date mutually agreed upon by the
parties and, in any event, within twenty (20) days of the date of such
election.  At the closing, the selling Member(s) shall deliver to Digiplex or
its successor entity the certificate or certificates evidencing the Membership
Units to be sold pursuant to such Sale by such Member(s), duly endorsed in blank
or accompanied by written instruments of transfer in form reasonably
satisfactory to Digiplex or its successor entity, duly executed by such selling
Member(s).  Notwithstanding the foregoing, if all or part of the consideration
payable in connection with the Change of Control transaction is unregistered
securities of any Person subject to restrictions on transfer as a result of any
applicable contractual provisions or the provisions of the Securities Act, then
the selling Member(s) may elect to receive the purchase price either (i) in such
unregistered securities, provided such securities are subject to customary
“demand” and “piggy-back” registration rights reasonably acceptable to the
Person receiving such securities as consideration in a transaction pursuant to
Article IX hereof or (ii) in cash.
 
(c)      For the purposes of this Section 9.06, “Change of Control” with respect
to a Member means the occurrence of any of the following at any time after the
date hereof:
 
(i)           any Person or group (within the meaning of Rule 13d-1 under the
Exchange Act) of Persons (A) shall have become the Beneficial Owner of more than
50% of the then outstanding voting securities of any such Member or Affiliate
Controlling such Member or (B) shall have acquired, directly or indirectly, the
power to vote for the election of a majority of the board of directors (or
similar governing body) of such Member or any Affiliate Controlling such Member;
or
 
(ii)           the board of directors (or similar governing body), or if
applicable the shareholders, of the Member or any Affiliate Controlling such
Member, as the case may be, shall have approved the sale of all or substantially
all the assets of such Member or Affiliate Controlling such Member in one
transaction or a series of related transactions.
 
SECTION 9.07.  Transferees to Execute Agreement.  Each Member agrees that it
will not, during the term of this Agreement, directly or indirectly, make any
Sale of any Membership Units Beneficially Owned by such Member unless prior to
the consummation of any such Sale, the Person to whom such Sale is proposed to
be made (a “Prospective Transferee”) (i) executes and delivers this Agreement to
the Company and each Member and (ii) unless such Prospective Transferee is a
recognized institutional investor, delivers to the Company an opinion of
counsel, satisfactory in form and substance to the Company, to the effect that
the execution of this Agreement by such Prospective Transferee makes this
Agreement a legal, valid and binding obligation of such Prospective Transferee
enforceable against such Prospective Transferee in accordance with its
terms.  Upon the execution and delivery by such Prospective Transferee of this
Agreement and, if required, the delivery of the opinion of counsel referred to
in clause (ii) of the preceding sentence, such Prospective Transferee shall be
deemed a “Member” for purposes of this Agreement and shall have the rights and
be subject to the obligations of a Member under this Agreement with respect to
the Membership Units owned by such Prospective Transferee.
 
 
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ARTICLE X
DISSOLUTION, LIQUIDATION AND TERMINATION
 
SECTION 10.01.  No Dissolution.  The Company shall not be dissolved by the
admission of additional Members in accordance with the terms of this Agreement.
 
SECTION 10.02.  Events Causing Dissolution.  The Company shall be dissolved and
its affairs shall be wound up upon the occurrence of any of the following
events:
 
(a)      the Majority Vote of the Board of Managers to dissolve, wind up and
liquidate the Company;
 
(b)      the sale of all or substantially all the assets of the Company; or
 
(c)      the entry of a decree of judicial dissolution under Section 18-802 of
the Act.
 
SECTION 10.03.  Notice of Dissolution.  Upon the dissolution of the Company, the
Person or Persons approved by the Members holding a majority of the remaining
Membership Units to carry out the winding up of the Company (the “Liquidating
Trustee”) shall promptly notify the Members of such dissolution.
 
SECTION 10.04.  Liquidation.  Upon dissolution of the Company, the Liquidating
Trustee shall immediately commence to wind up the Company’s affairs; provided
however, that a reasonable time shall be allowed for the orderly liquidation of
the assets of the Company and the satisfaction of liabilities to creditors so as
to enable the Members to minimize the normal losses attendant upon a
liquidation.  The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
 
(a)      first, to creditors of the Company (including holders of Membership
Units that are creditors to the extent otherwise permitted by Law), in
satisfaction of the liabilities of the Company (whether by payment or the making
of reasonable provision for payment thereof), other than liabilities for
distributions to holders of Membership Units; and
 
(b)      thereafter, to be distributed among the Members in accordance with
Section 7.02.
 
SECTION 10.05.  Termination.  The Company shall terminate when all of the assets
of the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the holders of
Membership Units in the manner provided for in this Article X, and the
Certificate shall have been cancelled in the manner required by the Act.
 
 
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SECTION 10.06.  Claims of the Members.  The Members shall look solely to the
Company’s assets for the return of their Capital Contributions, and if the
assets of the Company remaining after payment of or due provision for all debts,
liabilities and obligations of the Company are insufficient to return such
Capital Contributions, the Members shall have no recourse against the Company or
any other Member or any other Person.  No Member with a negative balance in such
Member’s Capital Account shall have any obligation to the Company or to the
other Members or to any creditor or other Person to restore such negative
balance upon dissolution or termination of the Company or otherwise.
 
ARTICLE XI
LIABILITY AND INDEMNIFICATION
 
SECTION 11.01.  Liability of Members.  Except as otherwise provided by the Act
or this Agreement, the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the Company, and no Covered Person shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Covered Person.
 
SECTION 11.02.  Indemnification by the Company.  xx)  The Company shall, to the
fullest extent permitted by applicable law, indemnify and hold harmless each
Covered Person from and against any and all claims, suits, judgments, losses,
damages, fines or costs (including reasonable legal fees and expenses)
(“Losses”) incurred by such Covered Person by reason of any act or omission
performed or omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of authority
conferred on such Covered Person by this Agreement, including without
limitation, any Losses arising out of or relating to any guarantee of any
obligations of the Company or of any of the Company Theaters provided by such
Covered Person that was pre-approved in writing by the Board of Managers
(including, without limitation, lease obligations and film rent); except that no
Covered Person shall be entitled to be indemnified if a judgment or other final
adjudication adverse to such Covered Person establishes that (i) the such
Covered Person acts were committed in bad faith or were the result of active and
deliberate dishonesty, gross negligence and were material to the cause of action
so adjudicated or (ii)  such Covered Person personally gained in fact a
financial profit or other advantage to which such Covered Person was not legally
entitled or (iii) with respect to indemnification for any guarantee, the Losses
for which indemnification is sought arose out of or were incurred in connection
with the Covered Person’s breach of any representation, warranty or covenant
contained in any Management Agreement (other than any such breach arising out of
the failure of any Company Subsidiary to maintain sufficient funds in the
operating accounts pursuant to the terms and conditions of any Management
Agreement); provided however, that any indemnity under this Section 11.02 shall
be provided out of and to the extent of Company assets only, and no other
Covered Person shall have any personal liability on account thereof.
 
 
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(b)           The Company shall not be liable for any settlement of any claim,
demand, action, suit or proceeding against any Covered Person effected without
its written consent (which consent shall not be unreasonably withheld or
delayed).  The Company shall not effect any settlement of any pending or
threatened claim, demand, action, suit or proceeding in respect of which any
Covered Person is seeking indemnification hereunder without the prior written
consent of each such Covered Person (which consent shall not be unreasonably
withheld or delayed by any such Covered Person), unless such settlement includes
an unconditional release of each such Covered Person from all liability and
claims that are the subject matter of such claim, demand, action, suit or
proceeding.
 
(c)           No amendment or repeal of any of this Section 11.02 or any other
provisions of this Agreement shall limit or eliminate any rights to
indemnification of a Covered Person existing at the time of such amendment or
repeal with respect to any acts or omissions occurring prior to such amendment
or repeal.
 
ARTICLE XII
OTHER AGREEMENTS
 
SECTION 12.01.  Further Assurances.  Each of the Members hereto shall use
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate and make effective the
transactions contemplated hereunder, including, without limitation, using
reasonable efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of the competent governmental
entities.  Each of the parties shall cooperate with the other parties when
required in order to effect the transactions contemplated hereunder.
 
SECTION 12.02.  Transactions Between the Company and the Members or Their
Affiliates.  Subject to obtaining approval, if any, required under Section 5.05
or 5.06, no transaction between the Company, on the one hand, and any Member or
its Affiliates, on the other hand, shall be entered into or conducted, and no
material terms thereof shall be changed or waived, unless the terms of such
transaction or any such proposed change or waiver are disclosed to each of the
Members not involved (whether directly or through an Affiliate) in such
transaction and are approved by each such uninvolved Member.  No determination
by the Company as to the pursuit by the Company of any legal remedy in respect
of any transaction between the Company, on the one hand, and any Member or its
Affiliates, on the other hand, shall be made without approval of each
disinterested Member.
 
ARTICLE XIII
MISCELLANEOUS
 
SECTION 13.01.  Confidential Information.  xxi)  Each party hereto (a
“Restricted Party”) (i) shall, and shall cause its officers, directors,
employees, attorneys, managers, equity holders, accountants, auditors and agents
(collectively, “Representatives”) and its Affiliates and their Representatives
to maintain in strictest confidence the terms of this Agreement and any and all
confidential information relating to any other party hereto or the Company that
is proprietary to such other party or the Company or otherwise not available to
the general public (“Confidential Information”) and (ii) shall not disclose, and
shall cause its Representatives, its Affiliates and their Representatives, not
to disclose, Confidential Information to any Person other than to the other
Members and the Company and its Representatives, except only to the extent such
disclosure is required by Law, in which event the party making such disclosure
or whose Affiliates or Representatives are making such disclosure, shall so
notify the other parties hereto and the Company as promptly as practicable (and
if possible, prior to making such disclosure) and shall seek confidential
treatment of such information.
 
 
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(b)      Notwithstanding Section 13.01(a):
 
(i)           Any Restricted Party or any Representative thereof may disclose
any Confidential Information for bona fide business purposes on a strict “need
to know” basis to its Affiliates, its board of directors (or equivalent
governing body), its Representatives and its lenders, provided that in each such
case, (i) each such Person agrees to keep such Confidential Information
confidential in the manner set forth in this Section 13.01 and (ii) such
Restricted Party shall be responsible for any breach by any such Person of its
confidentiality obligations; and
 
(ii)           The provisions of Section 13.01(a) shall not apply to, and
Confidential Information shall not include:
 
(A)   any information that is or has become generally available to the public
other than as a result of a disclosure by any Restricted Party or any Affiliate
or Representative thereof in breach of any of the provisions of this Section
13.01;
 
(B)   any information that has been independently developed by such Restricted
Party (or any Affiliate thereof) without violating any of the confidentiality
provisions of this Agreement or any other similar contract or other obligation
of confidentiality to which such Restricted Party, or any Affiliate thereof or
any of their respective Representatives, is or are bound; or
 
(C)    any information made available to such Restricted Party (or any Affiliate
thereof), on a non-confidential basis by any Third Party, without violating any
confidentiality agreement or other obligation of confidentiality with respect to
such information.
 
(c)      Except as otherwise provided for in this Section 13.01, Confidential
Information received hereunder shall be used by each Member and its Affiliates
and their respective Representatives solely for use in connection with such
Member’s investment in the Company and with respect to the Company.
 
(d)      The obligations of each Member under this Section 13.01 shall survive
for so long as such Member remains a Member, and for five (5) years after such
Member ceases to be a Member, notwithstanding the termination of the Company,
such Member’s Sale of its Membership Units, the withdrawal by such Member from
the Company and/or any Person ceasing to be an Affiliate of such Member.
 
SECTION 13.02.  Notices.  All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by courier
service, by email (return receipt requested), by fax or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specification notice given in accordance with this Section 13.02:
 
 
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(a)      If to the Company:
 
C/O Digital Cinema Destinations Corp.
250 East Broad Street
Westfield, NJ 07090
Fax No.:  (908) 396-1361
Attention:  Board of Managers

With a copy to:
Start Media, LLC
375 Hudson Street, 12th Floor
New York, NY 10014
Attention:  Michael J. Maher/Vinay S. Kolla

(b)      if to a Member, then to the address or fax number set forth opposite
such Member’s name on Schedule 2.01 hereto.
 
SECTION 13.03.  Public Announcements.  Except as required by Law or by the
requirements of any securities exchange on which the securities of a party
hereto are listed, no party to this Agreement shall make, or cause to be made,
any press release or public announcement in respect of this Agreement or
otherwise communicate with any news media without the prior written consent of
the other parties, and the parties shall cooperate as to the timing and contents
of any such press release or public announcement.
 
SECTION 13.04.  Cumulative Remedies.  The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies.  Said
rights and remedies are given in addition to any other rights the parties may
have by Law, statute, ordinance or otherwise.
 
SECTION 13.05.  Binding Effect.  This Agreement shall be binding upon and inure
to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, executors, administrators, heirs, legal
representatives and assigns.
 
SECTION 13.06.  Interpretation.  Throughout this Agreement, nouns, pronouns and
verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable.  Unless otherwise specified, all references
herein to “Articles,” “Sections” and paragraphs shall refer to corresponding
provisions of this Agreement.
 
SECTION 13.07.  Severability.  If any term or other provision of this Agreement
is held to be invalid, illegal or incapable of being enforced by any rule of
Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions is not affected in any manner materially
adverse to any party.  Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
 
 
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SECTION 13.08.  Counterparts.  This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
 
SECTION 13.09.  Entire Agreement.  This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
 
SECTION 13.10.  Governing Law; Submission to Jurisdiction.  xxii)  This
Agreement shall be governed by, and construed in accordance with, the Laws of
the State of New York.
 
(b)      Any claim, action, suit or proceeding seeking to enforce any provision
of, or based on any matter arising out of or in connection with, this Agreement
or the transactions contemplated hereby shall be heard and determined in any New
York State or federal court sitting in the City of New York, County of New York,
and each of the parties hereto hereby consents to the exclusive jurisdiction of
such courts (and of the appropriate appellate courts therefrom in any such
claim, action, suit or proceeding) and irrevocably waives, to the fullest extent
permitted by Law, any objection which it may now or hereafter have to the laying
of venue of any such claim, action, suit or proceeding in any such court or that
any such claim, action, suit or proceeding which is brought in any such court
has been brought in an inconvenient forum.
 
(c)      Subject to applicable Law, process in any such claim, action, suit or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.  Without limiting the foregoing and
subject to applicable Law, each party agrees that service of process on such
party as provided in Section 13.01 shall be deemed effective service of process
on such party.  Nothing herein shall affect the right of any party to serve
legal process in any other manner permitted by Law or at equity.  WITH RESPECT
TO ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT, EACH OF THE
PARTIES IRREVOCABLY WAIVES AND RELEASES TO THE OTHER ITS RIGHT TO A TRIAL BY
JURY, AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN ANY SUCH PROCEEDING.
 
SECTION 13.11.  Specific Performance.  The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties hereto shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at Law or in equity.
 
 
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SECTION 13.12.  Expenses.  Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
 
SECTION 13.13.  Amendments and Waivers; Assignment.  xxiii)  Any provision of
this Agreement may be amended only upon Majority Vote; provided however, that
Schedule 2.01 to this Agreement shall be deemed amended from time to time to
reflect the admission of a new Member and the adjustment of the Membership Units
resulting from any Sale or other disposition of a Membership Unit, in each case,
that is made in accordance with the provisions hereof.
 
(b)      Any provision of this Agreement may be waived if, and only if, such
waiver is in writing and signed by the party or parties against whom the waiver
is to be effective.
 
(c)      No failure or delay by any party in exercising any right, power or
privilege hereunder (other than a failure or delay beyond a period of time
specified herein) shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Law.
 
(d)      This Agreement shall not be assigned without the express written
consent of all the parties to (which consent may be granted or withheld in the
sole discretion of any party), except in connection with any Sale of Membership
Units permitted under Article IX.
 
SECTION 13.14.  No Third Party Beneficiaries.  This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and successors and nothing herein, express or implied, is intended to or
shall confer upon any other Person or entity, any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except for the rights to indemnification conferred upon Covered Persons in
accordance with Article XI of this Agreement.  Without limiting the foregoing,
any obligation of the Members to make Capital Contributions to the Company under
this Agreement is an agreement only between the Members and no other person or
entity, including the Company, shall have any rights to enforce such
obligations.
 
SECTION 13.15.  Headings.  The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
 
SECTION 13.16.  Construction.  Each party hereto acknowledges and agrees it has
had the opportunity to draft, review and edit the language of this Agreement and
that no presumption for or against any party arising out of drafting all or any
part of this Agreement will be applied in any dispute relating to, in connection
with or involving this Agreement.  Accordingly, the parties hereby waive the
benefit of any rule of Law or any legal decision which would require that in
cases of uncertainty, the language of a contract should be interpreted most
strongly against the party who drafted such language.
 
SECTION 13.17.  Member Representations.  Each Member represents and warrants to
each other Member as follows:
 
 
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(a)           Organization and Authority.  Such Member is duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all necessary power
and authority to enter into this Agreement, to carry out its obligations
hereunder and to perform the actions contemplated hereby.  Such Member is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary, except to the
extent that the failure to be so licensed or qualified would not prevent or
materially hinder the performance of the actions contemplated by this
Agreement.  The execution and delivery of this Agreement by such Member, the
performance by it of its obligations hereunder and the performance by it of the
actions contemplated hereby have been duly authorized by all requisite action on
its part.  This Agreement has been duly executed and delivered by such Member,
and (assuming due authorization, execution and delivery by the other Persons
signatory hereto) this Agreement constitutes a legal, valid and binding
obligation of such Member enforceable against it in accordance with its terms.
 
(b)           No Conflict.  The execution, delivery and performance of this
Agreement by such Member do not and will not (i) violate, conflict with or
result in the breach of any provision of its charter or by-laws (or similar
organizational documents), to the extent it has such, (ii) conflict with or
violate any law, governmental regulation or governmental order applicable to
such party or any of its assets, properties or businesses or (iii) conflict
with, result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights pursuant to, any
contract, agreement or arrangement by which such party is bound, except to the
extent that any conflict under (ii) or (iii) above would not prevent or
materially hinder the performance of the actions contemplated by this Agreement.
 
(c)           Governmental Consents and Approvals.  The execution, delivery and
performance of this Agreement by such party do not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to, any governmental authority.
 
(d)           Investor Status.  The Membership Units to be acquired by such
Member pursuant to this Agreement are being acquired for such Member’s own
account, for investment purposes only and not with a view to the resale or
distribution thereof within the meaning of the Securities Act.  Such Member will
only resell the Membership Units or any part thereof pursuant to a registration
or an available exemption under applicable law.  Such Member acknowledges that
the offer and sale of the Membership Units have not been registered under the
Securities Act or the securities laws of any state or other jurisdiction, and
that the Membership Units are being offered and sold pursuant to an exemption
from registration contained in the Securities Act, and that it understands the
limitations on transfer described herein, and the Membership Units cannot be
disposed of unless they are subsequently registered under the Securities Act and
any applicable state laws or an exemption from such registration is
available.  Such Member understands that no public market now exists for the
Membership Units and that it is uncertain whether a public market will ever
exist for the Membership Units. Such Member (i) is an experienced investor in
securities and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and economic risks of its
investment in the Membership Units, (ii) is able to bear the economic risk of
its investment in the Membership Units and (iii) is an “accredited investor” as
such term is defined in Rule 501 promulgated under the Securities Act.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have entered into this Operating
Agreement or have caused this Agreement to be duly executed by their respective
authorized officers, in each case as of the date first above stated.
 

 
START MEDIA, LLC
         
 
By:
       
Name: Michael J. Maher
     
Title: CEO/ Member
           
DIGITAL CINEMA DESTINATIONS CORP.
           
By:
       
Name: A. Dale Mayo
     
Title: CEO
 

 
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