**Exhibit10.3**

 

EXECUTION VERSION

 

 

 

 

**DIGITALCINEMA IMPLEMENTATION PARTNERS, LLC**

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**AMENDEDAND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT**

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**DATED ASOF MARCH 10, 2010**

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**TABLE OF CONTENTS**

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| ** ** | ** **                                     | **Page** |
|------------|------------------------------------------------|----------|
|       |                                           |     |
| ARTICLE 1  | DEFINITIONS                                    | 1        |
| 1.1        | Defined Terms                                  | 1        |
| 1.2        | Other Definitional  Provisions; Interpretation | 11       |
| ARTICLE 2  | FORMATION                                      | 11       |
| 2.1        | Formation; Qualification                       | 11       |
| 2.2        | Name                                           | 12       |
| 2.3        | Term                                           | 12       |
| 2.4        | Headquarters Office                            | 12       |
| 2.5        | Registered Agent and Office                    | 12       |
| 2.6        | Purposes                                       | 12       |
| 2.7        | Powers                                         | 13       |
| ARTICLE 3  | MEMBERS AND INTERESTS                          | 13       |
| 3.1        | Members                                        | 13       |
| 3.2        | Meeting of Members                             | 14       |
| 3.3        | Certain Duties and Obligations of the Members  | 15       |
| 3.4        | Units                                          | 15       |
| 3.5        | Authorization and Issuance of Additional Units | 15       |
| 3.6        | Business Opportunities                         | 16       |
| ARTICLE 4  | MANAGEMENT AND OPERATIONS                      | 16       |
| 4.1        | Management of the Company                      | 16       |
| 4.2        | Composition of the Board                       | 17       |
| 4.3        | Board Committees                               | 19       |
| 4.4        | Board Meetings                                 | 19       |
| 4.5        | Matters Requiring Board Approval               | 20       |
| 4.6        | Officers                                       | 23       |
| 4.7        | Officers and Directors Insurance               | 24       |
| 4.8        | Budget                                         | 24       |
| 4.9        | Limitation of Liability; Exculpation           | 24       |
| 4.10       | Indemnification                                | 25       |
| 4.11       | Title to Assets                                | 26       |
|            |                                                |          |  |

 

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| ** ** | ** **                                            | **Page** |
|------------|-------------------------------------------------------|----------|
|       |                                                  |     |
| ARTICLE 5  | CAPITAL CONTRIBUTIONS; DISTRIBUTIONS                  | 27       |
| 5.1        | Capital Contributions                                 | 27       |
| 5.2        | Loans from Members                                    | 29       |
| 5.3        | Loans from Third Parties                              | 29       |
| 5.4        | Non-Funding Member                                    | 29       |
| 5.5        | Distributions                                         | 30       |
| 5.6        | Valuation                                             | 31       |
| ARTICLE 6  | BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS; ALLOCATIONS | 31       |
| 6.1        | General Accounting Matters                            | 31       |
| 6.2        | Certain Tax Matters                                   | 32       |
| 6.3        | Elections                                             | 33       |
| 6.4        | Tax Year                                              | 33       |
| 6.5        | Withholding Requirements                              | 33       |
| 6.6        | Reports to Members                                    | 33       |
| 6.7        | Auditors                                              | 34       |
| 6.8        | Transfers During Year                                 | 34       |
| 6.9        | Code Section 754  Election                       | 35       |
| 6.10       | Tax Classification                                    | 35       |
| ARTICLE 7  | DISSOLUTION                                           | 35       |
| 7.1        | Dissolution                                           | 35       |
| 7.2        | Winding-Up                                            | 35       |
| 7.3        | Final Distribution                                    | 36       |
| ARTICLE 8  | TRANSFER; SUBSTITUTION; ADJUSTMENTS                   | 37       |
| 8.1        | Restrictions on Transfer                              | 37       |
| 8.2        | Substituted Members                                   | 38       |
| 8.3        | Transfers to Permitted Transferees                    | 38       |
| 8.4        | Effect of Void Transfers                              | 39       |
| 8.5        | Third Party Transferee                                | 39       |
| 8.6        | Rights of First Offer                                 | 39       |
| ARTICLE 9  | WITHDRAWAL OF MEMBER                                  | 41       |
| 9.1        | Withdrawal of a Founding Member                       | 41       |
| 9.2        | Effect of Withdrawal                                  | 42       |
|            |                                                       |          |  |

 

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| ** ** | ** **                                 | **Page** |
|------------|--------------------------------------------|----------|
|       |                                       |     |
| ARTICLE 10 | MISCELLANEOUS                              | 42       |
| 10.1       | Agreement to Cooperate; Further Assurances | 42       |
| 10.2       | Amendments                                 | 42       |
| 10.3       | Confidentiality                            | 42       |
| 10.4       | Injunctive Relief                          | 43       |
| 10.5       | Successors, Assigns and Transferees        | 44       |
| 10.6       | Notices                                    | 44       |
| 10.7       | Integration                                | 44       |
| 10.8       | Severability                               | 44       |
| 10.9       | Counterparts                               | 45       |
| 10.10      | Governing Law;  Submission to Jurisdiction | 45       |
|            |                                            |          |  |

 

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**AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATINGAGREEMENT**

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**OF**

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**DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC**

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This Amended and RestatedLimited Liability Company Operating Agreement (this “**Agreement**”) of Digital Cinema Implementation Partners, LLC, a Delaware limitedliability company (the “**Company**”),is made and entered into as of March 10, 2010, by and among each of theparties hereto.

 

**RECITALS**

** **

WHEREAS, AmericanMulti-Cinema, Inc., a Missouri corporation (“**AMC**” or the “**AMCFounding Member**”), Regal/DCIP Holdings, LLC, a Delaware limitedliability company (“**Regal**”or the “**Regal Founding Member**”),and Cinemark Media, Inc., a Delaware corporation (“**Cinemark Media**” or the “**Cinemark Founding Member**”) formed theCompany and entered into the original limited liability company operatingagreement as of February 12, 2007 (the “**OriginalAgreement**”) for the purposes of (i) engaging in the DigitalCinema Business and acquiring, holding, managing and otherwise dealing with theassets and liabilities associated therewith, and (ii) engaging in suchother business activities as determined under the terms of this Agreement;

 

WHEREAS, AMC, Regal andCinemark Media have made Capital Contributions to the Company in the amountslisted on Exhibit A hereto;

 

WHEREAS, each of AMC, Regaland Cinemark Media desire to amend and restate the Original Agreement on theterms set forth herein; and

 

WHEREAS, the respectiveboard of directors and manager of each of AMC, Regal and Cinemark Media,respectively, have approved this Agreement.

 

NOW, THEREFORE, the partieshereto agree as follows:

 

# **ARTICLE 1**

 

# **DEFINITIONS**

 

**1.1**          **Defined Terms.**  The following terms shall have the followingmeanings in this Agreement:

 

“**AdditionalRequired Funding Notice**” has the meaning set forth in the EquityContribution Agreement.

 

“**Affiliate**” means with respect to anyPerson, any Person that directly or indirectly, through one or moreintermediaries, Controls, is Controlled by or is under common Control with suchPerson.  Notwithstanding the foregoing, (i) noMember shall be deemed an 

 

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Affiliateof the Company, (ii) the Company shall not be deemed an Affiliate of anyMember, (iii) no stockholder of REG, or any of such stockholder’sAffiliates (other than REG and its Subsidiaries) shall be deemed an Affiliateof any Member or the Company, (iv) no stockholder of Marquee Holdings, orany of such stockholder’s Affiliates (other than Marquee Holdings and itsSubsidiaries) shall be deemed an Affiliate of any Member or the Company, and (v) nostockholder of Cinemark, or any of such stockholder’s Affiliates (other thanCinemark and its Subsidiaries) shall be deemed an Affiliate of any Member orthe Company.

 

“**Agreement**” has the meaning set forthin the preamble of this Agreement, as the same may be amended, supplemented orotherwise modified from time to time.

 

“**Allocations Exhibit**”means Exhibit B to this Agreement.

 

“**AMC**” has the meaning set forth in theRecitals of this Agreement or its successor.

 

“**AMC Director**” has the meaning set forthin Section 4.2(a)(i) of this Agreement.

 

“**AMC Founding Member**” has the meaningset forth in the Recitals of this Agreement.

 

“**Beneficial Owner**” or “**beneficial owner**” (including, withcorrelative meanings, the terms “**beneficialownership**” and “**beneficially owns**”)has the meaning attributed to it in Rules 13d-3 and 13d-5 under theExchange Act, whether or not applicable, except that a Person shall be deemedto have Beneficial Ownership of all Units that any such Person has the right toacquire, whether such right is exercisable immediately or only after thepassage of time or is exercisable only upon the occurrence of a subsequentcondition.

 

“**Board**” means the Board of Directors ofthe Company.

 

“**Budget**” means an annual operating andcapital budget of the Company, including, among other things, anticipatedrevenues, expenditures (capital and operating), and cash and capitalrequirements (including any additional Capital Contributions) of the Companyfor the following year.

 

“**Budget Deadlock**” has the meaning setforth in Section 4.5 of this Agreement.

 

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

 

“**Capital Account**” has the meaning setforth in the Allocations Exhibit.

 

“**Capital Contribution**” means the totalamount contributed (or deemed to be contributed) to the Company in Cash and thevalue of Contributed Equipment set forth in the applicable InstallationAgreement, and all other assets (at the agreed fair market value (net of allliabilities secured by such assets that the Company is considered to assume ortake subject to Section 752 of the Code)) contributed to the Company by aMember.

 

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“**Cash**”means cash, amounts credited to deposit accounts and other immediatelyavailable funds that are denominated in Dollars.

 

“**Cash Equivalents**” means (i) directobligations of, or obligations the principal of and interest on which areunconditionally guaranteed by, the United States of America (or any agencythereof to the extent such obligations are backed by the full faith and creditof the United States of America), in each case maturing within one year fromthe date of acquisition thereof; (ii) investments in commercial papermaturing within 270 days from the date of acquisition thereof and having, atsuch date of acquisition, the highest credit rating obtainable from Standard &Poor’s Corporation or any successor rating agency (“**S&P**”) orMoody’s Investors Service, Inc. or any successor rating agency (“**Moody’s**”);(iii) investments in certificates of deposit, banker’s acceptances andtime deposits maturing within 180 days from the date of acquisition thereofissued or guaranteed by or placed with, and money market deposit accountsissued or offered by, any domestic office of any commercial bank organizedunder the laws of the United States of America or any State thereof that (1) hasa combined capital and surplus and undivided profits of not less than$500,000,000, (2) has a long-term unsecured debt rating of “Aa3” or betterby Moody’s or, if not rated by Moody’s then otherwise approved by Moody’s, and (3) whosedeposits are insured by the FDIC; (iv) fully collateralized repurchase agreementswith a term of not more than 30 days for securities described in clause (i) aboveand entered into with a financial institution satisfying the criteria describedin clause (iii) above; (v) money market funds that (A) complywith the criteria set forth in Rule 2a 7 under the Investment Company Actof 1940, (B) are rated AAA by S&P and Aaa by Moody’s, and (C) haveportfolio assets of at least $5,000,000,000; and (vi) in the case of anyForeign Subsidiary, other short-term investments that are analogous to theforegoing, are of comparable credit quality and are customarily used bycompanies in the jurisdiction of such Foreign Subsidiary for cash managementpurposes.

 

“**Cause**” means (i) willfulmalfeasance or willful misconduct by a Director or Officer in connection withthe performance of his or her duties as such, (ii) the commission by aDirector or Officer of (A) any felony or (B) a misdemeanor involvingmoral turpitude or (iii) a determination by a court of competentjurisdiction in the United States that such Director or Officer, as such or inany other capacity (whether or not relating to the Company), breached afiduciary duty owed by him or her to another Person.

 

“**CEO**” has the meaning set forth in Section 4.6(b)(i) ofthis Agreement.

 

“**CEO Director**” has the meaning set forthin Section 4.2(a)(iv) of this Agreement.

 

“**Certificate**” has the meaning set forthin Section 2.1(a) of this Agreement.

 

“**Chairman**” has the meaning set forth in Section 4.2(b) of thisAgreement.

 

“**Change of Control**” with respect to anyPerson that is not an individual, means (i) any merger or consolidationwith or into any other entity or any other similar transaction, whether in asingle transaction or series of related transactions, where (A) themembers or stockholders of such Person immediately prior to such transaction inthe aggregate cease to own 

 

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atleast 50% of the voting securities of the entity surviving or resulting fromsuch transaction (or its stockholders or the Ultimate Parent thereof) or (B) anyPerson or Group becomes the beneficial owner of more than 50% of the votingsecurities of the entity surviving or resulting from such transaction (or itsstockholders or the Ultimate Parent thereof), (ii) any transaction orseries of related transactions in which in excess of 50% of such Person’svoting power is Transferred to any other Person or Group or (iii) the saleor Transfer by such Person of all or substantially all of its assets.

 

“**Cinemark**” means Cinemark Holdings, Inc.or its successor or any Person that wholly owns Cinemark, directly orindirectly, in the future.

 

“**Cinemark Director**” has the meaning setforth in Section 4.2(a)(ii) of this Agreement.

 

“**Cinemark Founding Member**” has themeaning set forth in the Recitals of this Agreement.

 

“**Cinemark Media**” has the meaning setforth in the Recitals of this Agreement or any successor of Cinemark Media.

 

“**ClosingDate**” has the meaning set forth in the Kasima Parent HoldingsLLC Agreement.

 

“**Code**” means the Internal Revenue Codeof 1986, as amended from time to time, or any successor statute and the rules andregulations thereunder in effect from time to time.  Any reference herein to a specific provisionof the Code shall mean, where appropriate, the corresponding provision in anysuccessor statute.

 

“**Company**” has the meaning set forth inthe preamble of this Agreement.

 

“**Company Rejection**” has the meaning setforth in Section 8.6(c) of this Agreement.

 

“**Confidential Information**” has themeaning set forth in Section 10.3(a) of this Agreement.

 

“**ContributedEquipment**” has the meaning set forth in the applicableInstallation Agreement.

 

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

 

“**Digital Cinema Business**” means theadministration of all functions required of the Company or any Subsidiary ofthe Company under the Transaction Documents.

 

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“**DigitalSystem**” has the meaning set forth in the Equipment LeaseAgreement.

 

“**Director**” means a member of the Board.

 

“**Equipment**”has the meaning set forth in the Equipment Lease Agreement.

 

“**EquipmentLease Agreements**” means (a) the Master Equipment LeaseAgreement, dated as of March 10, 2010, by and between Kasima, LLC andRegal, (b) the Master Equipment Lease Agreement, dated as of March 10,2010, by and between Kasima, LLC and Cinemark and (c) the Master EquipmentLease Agreement, dated as of March 10, 2010, by and between Kasima, LLCand AMC.

 

“**EquityContribution Agreement**” means that certain Equity ContributionAgreement dated as of March 10, 2010, by and between the Company andKasima Parent Holdings, LLC.

 

“**Equity Interests**” means, with respectto any Person, any and all shares, interests, participations or otherequivalents (however designated, whether voting or non-voting) of capitalstock, partnership interests (whether general or limited), limited liabilitycompany interests or equivalent ownership interests in or issued by, orinterests, participations or other equivalents to share in the revenues orearnings of (except as provided in any service agreement that includes arevenue-sharing component entered into in the ordinary course of business),such Person or securities convertible into, or exchangeable or exercisable for,such shares, interests, participations or other equivalents and options,warrants or other rights to acquire such shares, interests, participations orother equivalents; provided that discounts and rebates granted in theordinary course of business shall not in any event constitute an EquityInterest.

 

“**ERISA**” means the Employee RetirementIncome Security Act of 1974, as amended, and the rules and regulationspromulgated thereunder, as the same may be amended from time to time.

 

“**ExcessCosts**” shall have the meaning set forth in the Kasima ParentHoldings LLC Agreement.

 

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

 

“**Exhibitor**”means AMC, Cinemark USA, Inc., a Texas corporation, and RegalEntertainment Group, a Delaware corporation.

 

“**ExhibitorEscrow Account**” means an escrow account established by Kasima,LLC for the purpose of holding proceeds of Capital Contributions made pursuantto Sections 5.1(c) and (d).

 

“**Fiscal Period**” means (a) theperiod commencing on January 1 and ending on March 31, 2010 and (b) anysubsequent three month period commencing on each of January 1, 

 

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April 1,July 1 or October 1 and ending on the succeeding March 31, June 30,September 30 and December 31.

 

“**Fiscal Year**” means (a) the periodcommencing on January 1 and ending on December 31, 2010 and (b) anysubsequent twelve month period commencing on January 1 and ending on thesucceeding December 31.

 

“**ForeignSubsidiary**” means any Subsidiary that is not a Subsidiaryincorporated or organized under the laws of the United States of America, anyState thereof or the District of Columbia.

 

“**Founding Member(s)**” means each of theAMC Founding Member, the Cinemark Founding Member and the Regal FoundingMember, and any of their respective replacements as provided in Section 3.1(e).

 

“**FundingNotice**” has the meaning set forth in the Equity ContributionAgreement.

 

“**GAAP**” means generally acceptedaccounting principles in the United States in effect from time to time.

 

“**Governmental Authority**” means anynation or government, any state or other political subdivision thereof, and anyentity exercising executive, legislative, judicial, regulatory oradministrative functions of or pertaining to government.

 

“**GrossAsset Value**” has the meaning set forth in the AllocationsExhibit.

 

**“Group**” has themeaning set forth in Section 13(d)(3) and Rule 13d-5 of theExchange Act.

 

“**Indebtedness**” means, with respect toany Person, at any date, without duplication, (i) all obligations of suchPerson for borrowed money, (ii) all obligations of such Person evidencedby bonds, debentures, notes or other similar instruments issued by such Person,(iii) all obligations of such Person to pay the deferred purchase pricefor property or services, except trade accounts payable arising in the ordinarycourse of business and consistent with past practice, (iv) all reimbursementobligations of such Person in respect of letters of credit or other similarinstruments, (v) all Indebtedness of others secured by any lien,encumbrance or mortgage on any asset of such Person, and (vi) allIndebtedness of others guaranteed (whether by virtue of partnershiparrangements, agreements to keep well, agreements to purchase assets, goods,securities or services, agreements to take-or-pay or agreements to maintain aminimum net worth, financial ratio or similar requirements, or otherwise) bysuch Person.

 

“**Indemnitee**” has the meaning set forthin Section 4.9(a) of this Agreement.

 

“**InstallationAgreements**” means each of (a) the Installation Agreementdated as of March 10, 2010, between Kasima, LLC and AMC, (b) theInstallation Agreement dated as of March 10, 2010, between Kasima, LLC andRegal, and (c) the Installation Agreement dated as of March 10, 2010,between Kasima, LLC and Cinemark USA, Inc.

 

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“**Intellectual Property**” means all U.S.,state and foreign intellectual property, including but not limited to all (i) (a) patents,inventions, discoveries, processes and designs; (b) copyrights and worksof authorship in any media; (c) trademarks, service marks, trade names,trade dress and other source indicators and the goodwill of the businesssymbolized thereby;  (d) software;and (e) trade secrets and other confidential or proprietary documents,ideas, plans and information; (ii) registrations, applications andrecordings related thereto; (iii) rights to obtain renewals, extensions,continuations or similar legal protections related thereto; and (iv) rightsto bring an action at law or in equity for the infringement or other impairmentthereof.

 

“**Interest**” means a limited liabilitycompany interest in the Company as provided in this Agreement and under the LLCAct and, in addition, any and all rights and benefits to which a Member isentitled under this Agreement, together with all obligations of such Person tocomply with, and rights to benefit from, the terms and provisions of thisAgreement.  Interests shall be expressedas a number of Units and as a number of any additional Interests issued by theCompany pursuant to Section 3.5.

 

“**Joint Venture Agreements**” means,collectively, this Agreement and the Software License Agreement.

 

“**Joint Venture Purposes**” has the meaningset forth in Section 2.6(b) of this Agreement.

 

“**KasimaParent Holdings LLC**” means Kasima Parent Holdings, LLC, aDelaware limited liability company.

 

“**KasimaParent Holdings LLC Agreement**” means that certain LimitedLiability Agreement of Kasima Parent Holdings, LLC, dated as of March 10,2010, as amended, supplemented, restated or otherwise modified from time totime.

 

“**Liabilities**” has the meaning set forthin Section 4.10(a) of this Agreement.

 

“**Liquidator**” has the meaning set forthin Section 7.2 of this Agreement.

 

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

 

“**Majority Director Vote**” means the voteof six (6) Directors (assuming a total of seven (7) Directors asprovided herein) present or represented by a valid written proxy at any meetingof the Board at which a quorum is present, except in the event that anyFounding Member is a Selling Member or a Non-Funding Member, as applicable, theDirectors designated by such Founding Member will be excluded from voting onmatters set forth in Sections 4.5(t), 4.5(v) and 5.4(a), as applicable,and in such cases the vote of four (4) out of five (5) remainingDirectors present or represented by a valid written proxy at any meeting of theBoard at which a quorum is present will be required.

 

“**MajorityMember Vote**” means the affirmative vote by both:  (a) holders of Units representing a majorityof all the Units then issued and outstanding and (b) each Founding Member.

 

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“**ManagementServices Agreements**” means each of (a) thatcertain Management Services Agreement, dated as of March 10,2010, by and among the Company, Kasima Parent Holdings, LLC and theExhibitors and (b) that certain Management Services Agreement, datedas of March 10, 2010, by and among the Company, Kasima Holdings, LLC,Kasima, LLC and the Exhibitors.

 

“**Marquee Holdings**” means MarqueeHoldings Inc. or its successor or any Person that wholly owns Marquee Holdings,directly or indirectly, in the future.

 

“**Member**” means each Person admitted tothe Company as a member in accordance with the provisions of this Agreementthat has not ceased to be a Member as provided in Section 3.1(c) ofthis Agreement.

 

“**Member Information**” has the meaning setforth in Section 10.3(c) of this Agreement.

 

“**NCM**”means National CineMedia, LLC, a Delaware limited liability company.

 

“**Net Profits or Net Loss**” has themeaning set forth in the Allocations Exhibit.

 

“**Non-Funding Member**” has the meaning setforth in Section 5.4(a) of this Agreement.

 

“**Offer**” has the meaning set forth in Section 8.6(b) ofthis Agreement.

 

“**Offer Price**” has the meaning set forthin Section 8.6(a) of this Agreement.

 

“**Offered Units**” has the meaning setforth in Section 8.6(a) of this Agreement.

 

“**Offeree Member(s)**” has the meaning setforth in Section 8.6(a) of this Agreement.

 

“**Officer**” has the meaning set forth in Section 4.6(a) ofthis Agreement.

 

“**OptionalFunding Notice**” has the meaning set forth in the EquityContribution Agreement.

 

“**Percentage Interest**” means thepercentage determined for each Member by dividing the amount of each Member’spositive Capital Account by the aggregate positive Capital Accounts of allMembers, as determined from time to time; provided, however, that if any Member’sCapital Account is negative at the time of determination, then the PercentageInterests shall be determined by the Board.

 

“**Permitted Transferee**” means (i) inthe case of any Member and any Permitted Transferee of any Member, anAffiliate of such Member or Permitted Transferee, or (ii) in the case ofany Founding Member and any Permitted Transferee of a Founding Member, anon-Affiliate of such Founding Member or Permitted Transferee if more than 50%of the non-Affiliate’s general voting power is owned directly or indirectlythrough one or more entities that 

 

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arethe same entities that own 50% or more of the general voting power of theUltimate Parent of such Founding Member.

 

“**Person**” means any individual, corporation,limited liability company, partnership (general or limited), trust, joint stockcompany, business or statutory trust, unincorporated association, jointventure, Governmental Authority or other entity or organization of any naturewhatsoever or any Group of two or more of the foregoing.

 

“**Prime Rate**” has the meaning set forthin Section 5.4(a)(i) of this Agreement.

 

“**ProjectedOptional Capital Contribution Amount**” has the meaning set forthin Section 5.1(d) of this Agreement.

 

“**Proprietary Information**” means allIntellectual Property, including but not limited to information of atechnological or business nature, whether written or oral, and if written,however produced or reproduced, received by or otherwise disclosed to thereceiving party from or by the disclosing party that is marked proprietary orconfidential or bears a marking of like import, or that the disclosing partystates is to be considered proprietary or confidential, or that a reasonableperson would consider proprietary or confidential under the circumstances ofits disclosure.

 

“**REG**” means Regal Entertainment Group orits successor or any Person that wholly owns REG, directly or indirectly, inthe future.

 

“**Regal**” has the meaning set forth in theRecitals of this Agreement or any successor of Regal.

 

“**Regal Cinemas**” means Regal Cinemas, Inc.,a Tennessee corporation, or its successor.

 

“**Regal Director**” has the meaning setforth in Section 4.2(a)(iii) of this Agreement.

 

“**Regal Founding Member**” has the meaningset forth in the Recitals of this Agreement.

 

“**Response Notice**” has the meaning setforth in Section 8.6(b) of this Agreement.

 

“**Screen**”has the meaning set forth in the Kasima Parent Holdings LLC Agreement.

 

“**Secondary Response Notice**” has themeaning set forth in Section 8.6(d) of this Agreement.

 

“**Seller’s Notice**” has the meaning setforth in Section 8.6(a) of this Agreement.

 

“**Selling Member**” has the meaning setforth in Section 8.6(a) of this Agreement.

 

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“**Senior Officer**” has the meaning setforth in Section 4.6(b)(ii) of this Agreement.

 

**“****Software License Agreement**” means the Second Amendedand Restated Software License Agreement, dated on or about the date hereof, byand among the Company, AMC, Regal CineMedia Corporation, Cinemark USA, Inc.,and NCM, as the same may be amended, supplemented or otherwise modified fromtime to time.

 

“**Subsidiary**” means, with respect to anyPerson, (i) a corporation a majority of whose capital stock with thegeneral voting power under ordinary circumstances to vote in the election ofdirectors of such corporation (irrespective of whether or not, at the time, anyother class or classes of securities shall have, or might have, voting power byreason of the happening of any contingency) is at the time beneficially ownedby such Person, by one or more Subsidiaries of such Person or by such Personand one or more Subsidiaries thereof or (ii) any other Person (other thana corporation), including a joint venture, a general or limited partnership ora limited liability company, in which such Person, one or more Subsidiariesthereof or such Person and one or more Subsidiaries thereof, directly orindirectly, at the date of determination thereof, beneficially own at least amajority ownership interest entitled to vote in the election of directors,managers or trustees thereof (or other Persons performing such functions) oract as the general partner or managing member of such other Person.

 

“**Tax****Item**”has the meaning set forth in the Allocations Exhibit.

 

“**Tax Matters Member**” has the meaning setforth in Section 6.2 of this Agreement.

 

“**Third Party Transferee**” has the meaningset forth in Section 8.5 of this Agreement.

 

“**TransactionDocuments**” has the meaning set forth in the Kasima ParentHoldings LLC Agreement.

 

“**Transfer**” (including the terms “**Transferred**” and “**Transferring**”) means, directly orindirectly, to sell, transfer, give, exchange, bequest, assign, pledge,encumber, hypothecate or otherwise dispose of, either voluntarily orinvoluntarily (including upon the foreclosure under any pledge or hypothecationpermitted by clause (b) below that results in a change of title), anyUnits or other assets beneficially owned by a Person or any interest in anyUnits or other assets beneficially owned by a Person.  Notwithstanding the foregoing:  (a) the Change of Control of any Memberor Permitted Transferee or any Affiliate of such Member or Permitted Transferee(or any holder of equity in a Member or an Affiliate of a Member) or a FoundingMember’s Ultimate Parent or its stockholders shall not be deemed to be aTransfer hereunder, and (b) a bona fide pledge of Units by any Member orits Affiliates shall not be deemed to be a Transfer hereunder.

 

“**Transferring Member**” has the meaningset forth in Section 8.1(a) of this Agreement.

 

10

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“**Ultimate Parent**” means (i) MarqueeHoldings in the case of AMC, (ii) Cinemark in the case of Cinemark Media,and (iii) REG in the case of Regal.

 

“**Unit**” means a fractional share of theInterests of all Members issued in accordance with the terms of this Agreement,including any additional Units issued by the Company pursuant to Section 3.5representing such rights and obligations as shall be determined by theBoard.  The number of Units outstandingand the holders thereof shall be set forth on Exhibit A, as suchmay be amended from time to time in accordance with this Agreement.

 

“**Unwinding Event**” has the meaning setforth in Section 8.3(c) of this Agreement.

 

“**Wholly Owned Subsidiary**” of any Personmeans a Subsidiary which is 100% owned, directly or indirectly, by such Person.

 

“**Withdrawal Notice**” has the meaning setforth in Section 9.1 of this Agreement.

 

**1.2          Other Definitional Provisions;Interpretation.**

## ** **

### (a)           The words “hereof,” “herein” and “hereunder”and words of similar import when used in this Agreement will refer to thisAgreement as a whole, including the Exhibits and Schedules attached hereto, andnot to any particular provision of this Agreement.  Articles, section and subsection referencesare to this Agreement unless otherwise specified.

###  

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

###  

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

###  

### (d)           The meanings given to capitalizedterms defined herein will be equally applicable to both the singular and pluralforms of such terms.  Whenever thecontext may require, any pronoun shall include the corresponding masculine,feminine and neuter forms.

###  

# **ARTICLE 2**

 

# **FORMATION**

 

**2.1          Formation; Qualification.**

## ** **

### (a)           A Certificate of Formation of theCompany (the “**Certificate**”)was executed by an authorized person and filed with the Secretary of State ofthe State of Delaware on even date with the execution of the Original Agreementto form the Company as a limited liability company pursuant to the LLC Act.  This Agreement completely amends and restatesthe Original Agreement in its entirety. The rights, duties and liabilities of the Members shall be as providedin the LLC Act, except as otherwise provided in this Agreement.

 

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### (b)           The Company shall be qualified orregistered under foreign limited liability company statutes or assumed orfictitious name statutes or similar laws in any jurisdiction in which theCompany owns property or transacts business to the extent, in the judgment ofthe Board, such qualification or registration is necessary or advisable inorder to protect the limited liability of the Members or to permit the Companylawfully to own property or transact business. The Board shall, to the extent necessary in the judgment of the Board,maintain the Company’s good standing in each such jurisdiction.

###  

### (c)           Each Director and each Senior Officeris an “authorized person” within the meaning of § 18-204(a) of theLLC Act, and shall have the power and authority to execute, file and publishany certificates, notices, statements or other documents (and any amendments orrestatements thereof) necessary to permit the Company to conduct business as alimited liability company in each jurisdiction where the Company elects to dobusiness.

###  

**2.2          Name.**  The name of the limited liability companyformed by the filing of the Certificate is “Digital Cinema ImplementationPartners, LLC.”  However, the business ofthe Company may be conducted upon compliance with all applicable laws under anyother name designated by the Board.

 

**2.3          Term.**  The term of the Company shall commence as ofthe date of filing the Certificate and will continue in perpetuity; providedthat the Company may be dissolved in accordance with the provisions of thisAgreement or by the LLC Act.

 

**2.4          Headquarters Office.**  The Company’s headquarters office shallinitially be located in Mahwah, New Jersey. The Board may determine to open, close or move any office at any time inits absolute discretion.

 

**2.5          Registered Agent and Office.**  The address of the Company’s registeredoffice in the State of Delaware is Corporation Service Company, with itsaddress at 2711 Centerville Road, Suite 400, Wilmington, Delaware,19808.  The name of the Company’sregistered agent at such address is Corporation Service Company.  The Board may at any time designate anotherregistered agent or registered office or both.

 

**2.6          Purposes.**  The purposes of the Company are to:

## ** **

### (a)           enter into, be a party to, andperform its obligations under each of the Transaction Documents to which it isor is contemplated to be a party; and

###  

### (b)           engage in all transactions andactivities contemplated by the Transaction Documents to which it is a party,including, without limitation, (i) performing the services contemplated inthe Management Services Agreements (as defined under the Kasima Parent HoldingsLLC Agreement), (ii) taking all actions (or, as applicable, instructingall designees on the board of directors or comparable managing body of itsSubsidiaries to take all actions) required or contemplated by the TransactionDocuments, and (iii) executing and delivering any other agreements,documents, instruments, certifications and reports as are contemplated by theTransaction Documents or are necessary or ancillary to the transactionscontemplated or permitted thereby (the purposes set forth in clauses (a) and(b) collectively, the “**Joint VenturePurposes**”).

 

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**2.7          Powers.**  The Company shall have the power andauthority to take any and all actions necessary, appropriate, desirable,advisable, incidental or convenient to, or for the furtherance of, the JointVenture Purposes, alone or with other Persons.

 

# **ARTICLE 3**

 

# **MEMBERS AND INTERESTS**

 

**3.1          Members.**

## ** **

### (a)           Exhibit A hereto containsthe name, address and number of Units owned by each Member as of the datehereof.  The Company shall revise Exhibit A (i) fromtime to time to reflect the issuance, conversion (if applicable) or Transfer ofUnits in accordance with the terms of this Agreement and other modifications toor changes in the information set forth therein, and (ii) in accordancewith Section 5.4.  Any amendment orrevision to Exhibit A or to the Company’s records as contemplatedby this Agreement to reflect information regarding Members or under Section 5.4shall be deemed to amend this Agreement, but shall not require the approval ofthe Board or any Member (and Section 10.2 shall not apply to any suchamendment).  The Company shall send toeach Member a copy of Exhibit A each time it is amended pursuant tothis Section 3.1.

###  

### (b)           One or more additional Persons may beadmitted as a Member of the Company only upon (i) an issuance of Unitspursuant to Section 3.5 or a Transfer of Units pursuant to Article 8,and (ii) the execution and delivery by such Person of a counterpart tothis Agreement or other written agreement, in a form satisfactory to the Board,to be bound by all the terms and conditions of this Agreement.  Upon such execution and compliance with theother provisions hereof, the Company shall amend Exhibit A andshall amend this Agreement as the Board may reasonably determine is necessary,to reflect the admission of such Person as a Member and such other informationof such Person as indicated in Exhibit A.  Unless admitted to the Company as a Member asprovided in this Section 3.1 or Section 8.2, no Person is, or will beconsidered to be, a Member.

###  

### (c)           Subject to the other provisions ofthis Section 3.1 and Section 8.2, each Person that receives Units incompliance with the terms of this Agreement shall be a Member.  A Member will cease to be a Member when suchPerson ceases to own any Units in the Company or as otherwise provided byapplicable law or herein, in which case Exhibit A shall be amendedto reflect that such Person is no longer a Member.

###  

### (d)           Except as provided in the LLC Act, inno event shall any Member (or any former Member), by reason of its status as aMember (or former Member), have any liability for (i) the debts, duties orany other obligations of the Company, (ii) the making or repayment of anyCapital Contribution of any other Member or (iii) any act or omission ofany other Member.

###  

### (e)           If a Founding Member and one or moreof its Permitted Transferees hold Units at the same time, such Founding Memberand Permitted Transferees shall designate one of them to act on behalf of allof them and vote all of their Units with respect to any matter requiring aMajority Member Vote.  A Person that is aFounding Member shall remain a 

 

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### Founding Member so long assuch Person owns any Units.  If a Personthat is a Founding Member transfers all of its Units such Person shall cease tobe a Founding Member hereunder and shall be replaced as such Founding Memberhereunder by a Permitted Transferee (if there is one) of such Person designatedby the holders of a majority of the Units held by such Person’s PermittedTransferees.

 

**3.2          Meeting of Members.**

 

### (a)           Annual Meeting.  Subject to Section 3.2(g), an annualmeeting of Members shall be held on such date and at such time as (i) shallbe designated from time to time by the Board, but no less often than onceduring each calendar year, and (ii) stated in the notice of the meeting,at which meeting the Members entitled to vote shall transact such business asmay properly be brought before the meeting. At each annual meeting of the Members (i) the Board shall discussthe matters and affairs of the Company, (ii) the Founding Members shalldesignate their respective Directors to serve on the Board until the nextannual meeting or until successors are duly designated, and (iii) theBoard shall determine who will serve as Chairman until the next annual meetingor until such successor is duly designated.

###  

### (b)           Special Meetings.  A special meeting of Members, for any purposeor purposes, may be called by the Board and shall be called by the Board uponthe receipt by the Board of the written request of any Founding Member.  Such request shall state the purpose orpurposes of the proposed meeting.

###  

### (c)           Place and Conduct of Meetings.  Meetings of the Members for the election ofDirectors or for any other purpose shall be held at such time and place, eitherwithin or without the State of Delaware, as shall be designated from time totime by the Board and stated in the notice of the meeting or in a duly executedwaiver of notice thereof.  All meetingsshall be conducted by the Chairman or such other Person as the Board may appointpursuant to such rules for the conduct of the meeting as the Board or suchother Person deems appropriate.  Suchmeetings may be held in person, by teleconference or by any other reasonablemeans, in each case at the discretion of the Board.

###  

### (d)           Notice of Meetings.  Written notice of an annual meeting orspecial meeting stating the place, date and hour of the meeting and in the caseof a special meeting, the purpose or purposes for which the meeting is called,shall be given not less than five calendar days nor more than 60 calendardays before the date of the meeting to each Member entitled to vote at suchmeeting, unless waived by each such Member.

###  

### (e)           Quorum.  The presence of both (a) the holders ofa majority of all the Units then issued and outstanding and entitled to votethereat and (b) each Founding Member, whether in person or represented bya valid written proxy, shall constitute a quorum at all meetings of the Membersfor the transaction of business.  If,however, such quorum shall not be present or represented at any meeting of the Members,the Members entitled to vote thereat, present in person or represented byproxy, shall have power to adjourn the meeting from time to time, withoutnotice other than announcement at the meeting, until a quorum shall be presentor represented.  Each Member shall make areasonable good faith effort to attend each duly called meeting of Memberseither in person or represented by a valid written proxy.

 

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### (f)            Voting.  All matters submitted to the vote of theMembers shall be decided by a Majority Member Vote.  Such votes may be cast in person or by validwritten proxy, but no proxy shall be voted after three years from its date,unless such proxy provides for a longer period.

###  

### (g)           Action by Consent.  Any consent required herein or actionrequired to be taken at any annual or special meeting of Members, or any actionwhich may be taken at any annual or special meeting of such Members, may betaken without a meeting, without a vote, and with a consent in writing signedby Members who are holders of outstanding Units having not less than theminimum number of votes that would be necessary to authorize or take suchaction at a meeting at which all Units entitled to vote thereon were presentand voted.  Prompt notice of the takingof the action without a meeting by less than unanimous written consent shall begiven to those Members who are holders of Units and who have not consented inwriting; provided that the failure to give any such notice shall notaffect the validity of the action taken by such written consent.

###  

**3.3          Certain Duties and Obligations ofthe Members.**  The Companyshall be a partnership only for income tax purposes, and this Agreement doesnot and shall not be deemed to create a partnership, joint venture, agency orother relationship among the Members creating fiduciary or quasi-fiduciaryduties or similar duties and obligations or to subject the Members to joint andseveral or vicarious liability or to impose any duty, obligation or liability thatwould arise therefrom with respect to any or all of the Members or theirAffiliates.  Except as otherwise providedin this Agreement, no Member shall have any authority to act for, bind, commitor assume any obligation or responsibility on behalf of the Company, itsproperties or any other Member.  NoMember, in its capacity as a Member under this Agreement, shall be responsibleor liable for any Indebtedness or obligation of another Member.  The Company shall not be responsible orliable for any Indebtedness or obligation of any Member, incurred either beforeor after the execution and delivery of this Agreement by such Member, except asto those responsibilities, liabilities, Indebtedness or obligations incurredpursuant to and as limited by the terms of this Agreement and the LLC Act.

## ** **

**3.4          Units.**

## ** **

### (a)           Units shall constitute equalfractional units into which Interests in the Company shall be divided (and mayinclude fractions of Units as well as whole Units).

###  

### (b)           Units may be Transferred only inaccordance with Article 8.

###  

**3.5          Authorization and Issuance ofAdditional Units.**  TheCompany shall only be permitted to issue additional Units in the Company to thePersons and on the terms and conditions set forth herein and as otherwisedetermined by the Board in accordance with Section 4.5(f).  If the Board determines to cause the Companyto issue additional Units, the Company shall amend any provision of thisAgreement (and the Members shall execute any such amendment to this Agreement)to authorize any additional Units, having such designations, preferences andrelative, participating or other special rights, powers and duties, as theBoard shall determine in its sole discretion. Section 10.2 shall not apply to any such amendment.

 

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**3.6          Business Opportunities.**  Except as may be otherwise provided in anywritten agreement with the Company to which it is a party, any Member, anyAffiliate thereof, any Director designated by a Founding Member and anystockholder of REG, Marquee Holdings or Cinemark (from time to time and atpresent, including CCMP Capital, Apollo Management, The Anschutz Company,Madison Dearborn Capital Partners, Syufy Enterprises LP, Bain Capital, TheCarlyle Group, Spectrum Equity Group, the Mitchell Special Trust and Lee RoyMitchell) may have other business interests or may engage in other businessventures of any nature or description whatsoever, whether currently existing orhereafter created, and may compete, directly or indirectly, with the businessof the Company, and none of the Company, the Founding Members, nor the otherMembers shall have any right to participate in such other business interests,ventures or competitive activities or to receive or share in any income orprofits derived therefrom.

 

# **ARTICLE 4**

 

# **MANAGEMENT AND OPERATIONS**

 

**4.1          Management of the Company.**

 

### (a)           The Company shall have a Board, whichshall consist of Directors who shall constitute “managers” within the meaningof the LLC Act and whose power and authority is expressly set forthherein.  The Board shall have full powerand authority and absolute discretion to do all things deemed necessary ordesirable by it to conduct the business of the Company in the name of theCompany in accordance with Section 2.7. It is the intention of the Members, subject to the express provisions ofthis Agreement, that the Board’s powers be as broad as the LLC Act may now orhereafter envision, and that any powers that may be conferred only by contractare deemed to be explicitly conferred hereby. In connection therewith, the Board may appoint Officers as provided in Section 4.6.  The day-to-day management, control andoperation of the Company shall be vested in the Officers in accordance with Section 4.6.  Except as otherwise expressly providedherein, the Members shall not take part in the day-to-day management, operationor control of the business and affairs of the Company, and the Members shallonly be entitled to vote on or consent to matters as expressly provided hereinor as required by mandatory provisions of the LLC Act.

###  

### (b)           No single Member (in its capacity asa Member) shall have the authority to bind the Company, and no single Member(in its capacity as a Member) shall have any right to participate in or toexercise control or management power over the business and affairs of theCompany; provided, however, the Founding Members shall have (i) theauthority to bind the Company and (ii) the right to participate in or toexercise control or management power over the business and affairs of theCompany when acting unanimously and when all Founding Members execute any andall instruments and documents necessary to carry out any action of the Company.

###  

### (c)           Each Director shall, in theperformance of his or her duties, be fully protected in relying in good faithupon the records of the Company and upon such information, opinions, reports orstatements presented to such Director by any Person (including, withoutlimitation, legal counsel and public accountants) as to matters that such Directorreasonably 

 

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### believes are within suchPerson’s professional or expert competence and who has been selected withreasonable care by or on behalf of the Board. A Director may vote on a matter or transaction in which such Directorhas an interest so long as such interest is disclosed to the Directors presentat the meeting during which such vote is taken.

###  

### (d)           The Founding Members recognize thatthey, or their Affiliates, are competitors in certain lines of business (andwill remain so after the date hereof) and that compliance with federal andstate antitrust laws requires appropriate limitations on the disclosure andexchange of non-public information and on certain concerted conduct between andamong the Company and its Members (including Founding Members and otherMembers).  Accordingly, the Board shalladopt and provide for the implementation of arrangements, procedures andpractices by the Company governing the disclosure and exchange of non-publicinformation and concerted conduct between and among the Company and Members(including Founding Members and other Members) in order to assure compliancewith applicable antitrust laws.  Suchprocedures and practices may include (by way of illustration and not as alimitation or exclusion) procedures and safeguards for communications andinformation sharing, and for the planning and conduct of meetings and otheractivities of the Company.

###  

**4.2          Composition of the Board.**

## ** **

### (a)           Size and Designation.  The entire Board shall consist of seven (7) Directors.  The Board may, subject to Section 4.5(q),increase or, subject to the other provisions of this Section 4.2, decreasethe number of Directors comprising the entire Board (and, if applicable, amendthe definition of Majority Director Vote). Section 10.2 shall not apply to any such amendment.  Subject to the other provisions of this Article 4and Section 5.4:

###  

#### (i)            the AMC Founding Member shall beentitled to designate two (2) Directors (each an “**AMC Director**”);

####  

#### (ii)           the Cinemark Founding Member shall beentitled to designate two (2) Directors (each a “**Cinemark Director**”);

####  

#### (iii)          the Regal Founding Member shall beentitled to designate two (2) Directors (each a “**Regal Director**”); and

####  

#### (iv)          The CEO shall be the seventh Director(the “**CEO Director**”), whichshall be Travis Reid until his resignation, retirement, disability, death, orremoval as a Director or CEO in accordance with Section 4.2(e).

####  

With respect to eachFounding Member’s right to designate two (2) Directors to the Board, atleast one such designated Director will be a member of senior management of atleast one of such Founding Member’s theatre operating Affiliates.

 

If one or more additionalPersons are admitted as a Member of the Company in accordance with Section 3.1after the date hereof, the Founding Members may, with the approval of 100% ofthe Members as of such date, amend this Agreement to increase the number ofDirectors on the Board.  Section 10.2shall not apply to any such amendment.

 

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### (b)           Chairman.  The chairman of the Board (the “**Chairman**”) shall be initially TravisReid.  With respect to any Chairman, suchDirector shall remain in that position until re-designated on an annual basisin accordance with Section 3.2(a), his removal as a Director in accordancewith Section 4.2(e), his resignation, retirement, disability or death, orhis removal as the Chairman by the Board. Upon the removal, resignation, retirement, disability or death of theChairman, a new Chairman shall be designated by the Board.

###  

### (c)           Designation; Election.  The Directors shall be determined inaccordance with Section 3.2(a) and Section 4.2(a) without avote of the Members, and each such Director shall serve until his earlierresignation, death, retirement, disability or removal.

###  

### (d)           Vacancies.

###  

#### (i)            Vacancies created on the Board atany time resulting from the resignation, death, retirement, disability orremoval (with or without Cause) of any Director designated by a Founding Membershall be filled by an individual designated in the manner specified in Section 4.2(a) bythe Founding Member who originally designated such former Director, without avote of the Members, and such replacement Director shall serve until hisearlier resignation, death, retirement, disability or removal.

####  

#### (ii)           Vacancies created on the Board at anytime resulting from an increase in the number of Directors comprising theentire Board shall be filled by the Board in accordance with the provisions of Section 4.5(q),or by a sole remaining Director, and the Directors so chosen shall hold officeuntil the next annual election by the Members and until their successors areduly elected and qualified, or until their earlier resignation, death,retirement, disability or removal.

####  

### (e)           Removal.

###  

#### (i)            Any Director may be removed at anytime (with or without Cause) by the Founding Member that designated suchDirector pursuant to Section 4.2(a) without a vote of the Board orthe Members.  No removal of a Directorpursuant to this Section 4.2(e)(i) shall affect any of the rights ofthe applicable Founding Member to designate a different or replacementDirector.

####  

#### (ii)           Any Director may be removed for Causeby a Majority Member Vote.  No removal ofa Director pursuant to this Section 4.2(e)(ii) shall affect any of therights of the applicable Founding Member to designate a different orreplacement Director.

####  

#### (iii)          The CEO Director may be removed at anytime (with or without Cause) by the Board in accordance with Section 4.5(q).

####  

### (f)            Termination of Designation Rights.  Subject to Section 5.4(a)(iii), eachFounding Member’s right to appoint two (2) Directors pursuant to Section 4.2(a) shallcontinue for so long as such Founding Member and its Affiliates andSubsidiaries continue to beneficially own Units.

 

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**4.3          Board Committees.**  Subject to the other provisions of thisAgreement, the Board may submit and delegate any matter, function orresponsibility to any special committee established by the Board as it deemsappropriate under guidelines which it may determine.  The composition of any such committee shallbe determined by the Board, but in no event shall any such committee becomprised of less than three (3) Directors, one of whom shall be an AMCDirector, one of whom shall be a Cinemark Director and one of whom shall be aRegal Director.

 

**4.4          Board Meetings.**

 

### (a)           Regular Meetings.  Unless otherwise agreed by the Board, theBoard shall meet at least once every Fiscal Period.  The dates and venues of such meetings shallbe determined and notified in writing to each Director of the Board inaccordance with clause (c) below.

###  

### (b)           Special Meetings.  In addition, at any time, any Director mayrequest the Chairman in writing to convene a meeting of the Board.  If the Chairman fails to convene a meeting ofthe Board to be held within five Business Days after the date of such writtenrequest, then such requesting Director shall have the right and authority toconvene a meeting of the Board.  Therequesting Director shall be entitled to set the agenda for any meetingrequested or convened by such Director. Matters voted on at a special meeting of the Board shall be limited tothose relating to the purpose or purposes for which such special meeting iscalled.

###  

### (c)           Notice and Manner of Meeting.

###  

#### (i)            Unless otherwise agreed by the Boardin the event of an emergency, a notice convening a meeting of the Board shallbe given to each Director at least 24 hours prior to (but excluding) the dateupon which the meeting is to be held and shall be accompanied by an agenda andany other issues to be considered at such meeting together with all relevantsupporting reports and documentation.

####  

#### (ii)           Notice of a meeting need not be givento any Director if a written waiver of notice, executed by such Director beforeor after the meeting, is filed with the records of the meeting, or to anyDirector who attends the meeting without protesting, prior thereto or at itscommencement, the lack of notice.  Awaiver of notice need not specify the purposes of the meeting.

####  

#### (iii)          All meetings of the Board may be heldin person or by conference telephone or similar communications equipment bymeans of which all persons participating in the meeting can hear and speak toeach other or by any other means of communications acceptable to the Board.

####  

### (d)           Quorum.  At all meetings of the Board, the presence ofthe lesser of six (6) Directors or one (1) Director from eachFounding Member shall constitute a quorum for the transaction of business,except in the event that any Founding Member is a Selling Member or aNon-Funding Member, as applicable, and a meeting is called solely to considerand vote on matters set forth in Sections 4.5(t), 4.5(v) and 5.4(a), asapplicable, in which case the presence of four (4) Directors shallconstitute a quorum for the transaction of such business.  Participation by a Director in a meeting inaccordance with Section 4.4(c)(iii), or pursuant to a valid written 

 

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### proxy (as provided below),shall constitute presence in person at the meeting.  If a quorum is not present at any meeting ofthe Board, the Directors present thereat may adjourn the meeting from time totime, without notice other than announcement at the meeting, until a quorum ispresent.  A Director may be counted aspresent for the purposes of a quorum of the Board pursuant to a valid writtenproxy delivered to another Director that was designated by the same FoundingMember (as the absent Director) and who is present at the Board meeting.  If one or more Directors designated to theBoard by any Founding Member is not present at any meeting of the Board, thenany Director also designated to the Board by such Founding Member shall beentitled to vote on behalf of such absent Director(s) pursuant to a validwritten proxy, but no such proxy shall be voted after three years from itsdate, unless such proxy provides for a longer period.  Each Founding Member shall make a reasonablegood faith effort to ensure that the Directors designated to the Board by suchFounding Member are either physically present at each duly called meeting ofthe Board or present pursuant to such a valid written proxy.

###  

### (e)           Board Action.  Except as otherwise provided in thedefinition of Majority Director Vote:  (i) eachDirector shall have one vote, and (ii) a Majority Director Vote shall bethe act of the Board.  Any instrument orwriting executed on behalf of the Company by any one or more of the Directorsor Senior Officers shall be valid and binding upon the Company when authorizedor directed by such action of the Board.

###  

### (f)            Action by Consent.  Any action required or permitted to be takenat any meeting of the Board may be taken without a meeting and without a vote,if a written resolution or consent, setting forth the action so taken, issigned by sufficient Directors to pass a Majority Director Vote on the actionso taken.

###  

### (g)           Compensation.  Directors shall be reimbursed by the Companyfor all reasonable out-of-pocket expenses incurred by them in connection withtheir service on the Board (including, without limitation, all reasonabletravel and accommodation expenses). Directors who are not employees of the Company or of a Founding Memberor an Affiliate (including any stockholder of REG, Marquee Holdings or Cinemarkthat would be deemed an Affiliate but for the exception set forth insubsections (iii), (iv) or (v) of the definition of Affiliate herein,or any of such stockholder’s Affiliates) thereof shall be entitled tocompensation for their services as Directors if and on the terms determined bythe Board.

###  

**4.5          Matters Requiring Board Approval.**  The following is not an exclusive list ofmatters that must be approved by the Board, but rather is a minimum list ofmatters requiring Board approval.  TheCompany shall not take, cause to be taken, or agree to take or authorize (andshall instruct all designees on the board of directors or comparable managingbody of its Subsidiaries not to take, cause to be taken or agree to take orauthorize) any of the following actions without prior Majority Director Vote:

 

### (a)           the approval of any Budget or anyamendment or modification of the Budget;

###  

### (b)           the incurrence of any Indebtedness orentering into or consummating any other financing transaction, in either case foran amount in excess of $100,000;

 

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###  

### (c)           the entering into or consummation ofany agreements or arrangements involving annual payments by the Company(including the fair market value of any barter) in excess of $1 million, or anymaterial modification of any such agreements or arrangements;

###  

### (d)           the entering into or consummation ofany agreements or arrangements involving annual receipts (including the fairmarket value of any barter) in excess of $5 million, or any materialmodification of any such agreements or arrangements;

###  

### (e)           except as contemplated herein, thedeclaration, setting aside or payment of any redemption of, or the making ofany distributions in respect of, any Units, payable in Cash, stock, property orotherwise, including, without limitation, pursuant to Section 5.5(a) and(b), or any reorganization or recapitalization or split, combination orreclassification or similar transaction of any of its limited liability companyinterests or capital stock, as the case may be;

###  

### (f)            the amendment of any provision ofthis Agreement to authorize, and the issuance of, any additional Units and thedesignations, preferences and relative, participating or other rights, powersand duties thereof, pursuant to Section 3.5 (and Section 10.2 shallnot apply to any such amendment);

###  

### (g)           the hiring or termination ofemployment of the CEO, or the entering into, amendment or termination of anyemployment, severance, change of control or other contract with any member ofsenior management or employee whose compensation package includes an equitycomponent;

###  

### (h)           the making of any change in the JointVenture Purposes;

###  

### (i)            the entering into of any agreementwith respect to or the taking of any material steps to facilitate a transactionthat constitutes a Change of Control of the Company or a proposal for such atransaction;

###  

### (j)            the leasing (as lessor), licensing(as licensor) or other Transfer of assets (including securities) (x) havinga fair market value or for consideration exceeding $5 million, taken as awhole, or (y) to which the revenues or the profits attributable exceed $5million, taken as a whole, in any one transaction or series of relatedtransactions, in each case, determined using the most recent quarterlyconsolidated financial statement of the Company;

###  

### (k)           the entering into of any agreementwith respect to or consummation of any acquisition of any business or assets(and with respect to assets, having a fair market value in excess of $5 milliontaken as a whole, in any one transaction or series of related transactions),whether by purchase and sale, merger, consolidation, restructuring,recapitalization or otherwise;

###  

### (l)            the settlement of claims or suits inwhich the Company is a party for an amount in excess of $100,000 or whereequitable or injunctive relief is included as part of such settlement;

###  

### (m)          the entering into, modification ortermination of any material contract or transaction or series of relatedtransactions (including by way of barter) between (x) the Company or anyof its Subsidiaries and (y)(1) any Member or any Affiliate of any Member 

 

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### (including any stockholderof REG, Marquee Holdings or Cinemark that would be deemed an Affiliate but forthe exception set forth in subsections (iii), (iv) or (v) of thedefinition of Affiliate herein, or any of such stockholder’s Affiliates) or (2) anyPerson in which any Founding Member has taken, or is negotiating to take, amaterial financial interest, in each case, other than relating to the purchaseor sale of products or services in the ordinary course of business of theCompany;

###  

### (n)           the admission to the Company of anynew Member;

###  

### (o)           the entering into, or themodification or termination of, any agreement for the Company to provide anyservices to any Person (other than a Member or Affiliate of a Member), with anaggregate value in excess of $1 million;

###  

### (p)           the dissolution of the Company or anyof its Significant Subsidiaries (as such term is defined in Rule 12b-2promulgated under the Exchange Act); the adoption of a plan of liquidation ofthe Company or any of its Significant Subsidiaries; any action by the Companyor any of its Significant Subsidiaries to commence any suit, case, proceeding orother action (x) under any existing or future law of any jurisdictionrelating to bankruptcy, insolvency, reorganization or relief of debtors seekingto have an order for relief entered with respect to the Company or any of itsSignificant Subsidiaries, or seeking to adjudicate the Company or any of itsSignificant Subsidiaries as bankrupt or insolvent, or seeking reorganization,arrangement, adjustment, winding-up, liquidation, dissolution, composition orother relief with respect to the Company or any of its SignificantSubsidiaries, or (y) seeking appointment of a receiver, trustee, custodianor other similar official for the Company or any of its SignificantSubsidiaries, or for all or any material portion of the assets of the Companyor any of its Significant Subsidiaries, or making a general assignment for thebenefit of the creditors of the Company or any of its Significant Subsidiaries;

###  

### (q)           the making of any change in thenumber of Directors comprising the entire Board, the selection of Directors tofill vacancies resulting from an increase in the number of Directors comprisingthe entire Board, or the removal of the CEO Director;

###  

### (r)            the approval of any tax matterpursuant to Section 6.2;

###  

### (s)           the making of valuationdeterminations pursuant to Section 5.6;

###  

### (t)            the approval of Transfers pursuantto Article 8 and release of a Transferring Member pursuant to Sections 8.1(b) and8.3(b);

###  

### (u)           the amendment of or making of anychange to any provision in this Section 4.5 or Article 8;

###  

### (v)           the exercise by the Company of theRight of First Offer pursuant to Section 8.6(b);

###  

### (w)          the approval of any otherinstructions, requirements, requests or assignments made by the Board tomanagement from time to time;

 

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###  

### (x)            to the extent that theorganizational documents of any Subsidiary condition any action by suchSubsidiary on the affirmative vote or approval of any director appointed by theCompany or any Subsidiary, causing, permitting or approving of such director sovoting or giving such approval; and

###  

### (y)           the amendment, modification ortermination of any of the Transaction Documents to which the Company is a party(other than any amendment or modification to this Agreement, which shall begoverned by the terms set forth herein).

###  

### *No Separate Action Required*.  The Company’s entry into TransactionDocuments to which the Company is a party and all of the actions contemplatedthereunder are hereby expressly approved, none of the restrictions set forthherein shall be applicable thereto, and no separate Board approval thereofshall be required.  The Board ofDirectors is hereby authorized to cause the Company to enter into and performthe Transaction Documents to which the Company is a party.

###  

### *Budget Deadlock. *In the event that the Boardfails to approve (pursuant to Section 4.8) with a Majority Director Voteany Budget on or before March 31st of each year(a “**Budget Deadlock**”), thenthe chief executive officers (or other appropriate officers) of each FoundingMember shall meet during a period of the next 30 calendar days to discussthe reasons for such Budget Deadlock and to consider solutions to resolve suchBudget Deadlock.  If the Board approvesthe proposed Budget (with or without modifications and pursuant to Section 4.5(a))during such 30-day period, then such proposed Budget (with such modificationsas may have been so approved by the Board) will become the Budget for the nextone-year period covered thereby, subject to the right of the Board to makefurther modifications thereto.  If noresolution can be reached within such 30-day period, then the Budget for theimmediately preceding year shall, by default, remain in effect for such year,subject to any other subsequent determination by the Board pursuant to a MajorityDirector Vote; provided that, if any Founding Member provides notice asset forth in Section 9.1, then such Founding Member shall have the rightto withdraw from the Company as a Member in accordance with Section 9.1.

###  

**4.6          Officers.**

 

### (a)           The Board may, from time to time,designate one or more officers of the Company (“**Officers**”) with such titles as may be designated by theBoard to act in the name of the Company with such authority under Section 4.1and as may be delegated to such Officer by the Board.  All Officers shall be subject to thesupervision and direction of the Board. The authority, duties or responsibilities of any Officer may besuspended and/or employment of any Officer terminated by the Board with orwithout Cause pursuant to a Majority Director Vote.

###  

### (b)           The Company’s senior management teamincludes (i) a Chief Executive Officer (“**CEO**”) who shall have general and active management of thebusiness of the Company and shall see that all orders and resolutions of theBoard are carried into effect, as well as the power to negotiate for, approveand execute contracts, deeds and other instruments on behalf of the Company asare necessary and appropriate in the general management of the business of theCompany or as are approved by the Board or any committee designated by theBoard; and (ii) such other senior officers as may from time to time bedesignated by the Board who shall 

 

23

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### perform such duties and havesuch powers as are appropriate and as prescribed by the Board or the CEO (the “**Senior Officers**”).  Each Senior Officer may be appointed or havehis or her employment with the Company terminated at will (subject to the termsof any employment agreement between the Company and such Senior Officer) by theBoard or any Senior Officer acting pursuant to authority granted to such SeniorOfficer by the Board.  All appointmentsof Senior Officers must be approved by the Board.

###  

### (c)           Each Officer shall discharge his orher duty as an Officer in a manner he or she reasonably believes to be in thebest interests of the Company.  EachOfficer shall, in the performance of his or her duties, be fully protected inrelying in good faith upon the records of the Company and upon suchinformation, opinions, reports or statements presented to such Officer by anyPerson (including, without limitation, legal counsel and public accountants) asto matters that such Officer reasonably believes are within such Person’sprofessional or expert competence and who has been selected with reasonablecare by or on behalf of the Board.

###  

**4.7          Officers and Directors Insurance.**  The Company shall purchase and maintain, atthe Company’s expense, officers and directors insurance on behalf of each ofthe Directors, Senior Officers and other Officers of the Company, against anyliability that may be asserted against, or any expense that may be incurred by,such Directors, Senior Officers and other Officers of the Company in connectionwith the activities of the Company and its Subsidiaries or Affiliates and suchother terms and coverage as shall be determined by the Board.

 

**4.8          Budget.**  On or before January 15th of each year,the CEO shall submit to the Board a proposed Budget for the one-year periodcommencing on January lst of suchyear.  Within 30 days after thesubmission to the Board of any proposed Budget, the Board shall advise the CEOwhether it approves or is unable to approve such proposed Budget and themodifications, if any, agreed upon by the Board.  If the Board approves a proposed Budget (withor without modifications and pursuant to Section 4.5(a)) for the nextFiscal Year, then such proposed Budget (with such modifications as may havebeen so approved by the Board) will become the Budget for the next one-yearperiod covered thereby, subject to the right of the Board to make furthermodifications thereto.  If such proposedBudget (with or without modifications) is not so approved by the Board, then,subject to Section 4.5, the Board shall request the CEO to prepare analternative proposed Budget in accordance with such further instructions theBoard may determine, and thereafter the CEO shall submit such alternativeBudget to the Board.  Until such time asany such alternative Budget is approved by the Board, the Budget for theprevious year shall remain in effect for such year.

 

**4.9          Limitation of Liability;Exculpation.**

 

### (a)           Except to the extent set forth inSections 4.9(b) or 5.4, no Member nor any of its Subsidiaries orAffiliates (including any stockholder of REG, Marquee Holdings or Cinemark thatwould be deemed an Affiliate but for the exception set forth in subsections(iii), (iv) or (v) of the definition of Affiliate herein, or any ofsuch stockholder’s Affiliates) nor any of their respective direct or indirectofficers, directors, trustees, members, partners, equity holders, employees oragents, nor any of their heirs, executors, successors and assigns, nor anyDirector or Officer (individually, an “**Indemnitee**”),shall be liable to the Company or any Member for any act or omission by suchIndemnitee in connection with the conduct of the affairs of the 

 

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### Company or otherwiseincurred in connection with the Company or this Agreement or the matterscontemplated herein, in each case unless such act or omission was the result ofgross negligence or willful misconduct or constitutes a breach of, or a failureto comply with, any agreement between (x) such Member or its Subsidiariesor Affiliates and (y) the Company or another Member or their Subsidiariesor Affiliates.

###  

### (b)           In making any decisions in his or hercapacity as Director, each Director shall be entitled to consider only theinterests of the Member who appointed him or her.  To the extent that, at law or in equity, a Directoror Member has duties (including fiduciary duties) or liabilities relating tothe Company or to any Member, such Director or Member acting under thisAgreement or pursuant to Section 3.6 shall not be liable to the Company orto any Member for any breaches of such duties (whether intentional, willful,knowing or otherwise); provided, however, this Section 4.9(b) shallnot eliminate any Director’s or Member’s (i) implied contractual covenantof good faith and fair dealing, nor (ii) indemnification rights set forthin Section 4.10(a), including any limitations thereto.

###  

### (c)           Notwithstanding any other provisionof this Agreement or otherwise applicable provision of law, whenever in thisAgreement a Director, Officer or Member is permitted or required to take anyaction or to make a decision (i) in its “sole discretion” or “discretion,”with “complete discretion” or under a grant of similar authority or latitude,such Director, Officer or Member shall be entitled to consider, and make itsdetermination based upon, such interests and factors as it desires, includingits own interests, and shall, to the fullest extent permitted by applicablelaw, have no duty or obligation to give any consideration to any interest of orfactors affecting the Company or the Members, or (ii) in its “good faith”or under another expressed standard, such Director, Officer or Member shall actunder such express standard and shall not be subject to any other or differentstandards.

###  

### (d)           Any Director, Officer, Liquidator orMember may consult with legal counsel and accountants selected by it at itsexpense or with legal counsel and accountants for the Company at the Company’sexpense.  Each Director, Officer,Liquidator and Member shall be fully protected in relying in good faith upon therecords of the Company and upon information, opinions, reports or statementspresented by another Director, Officer, Liquidator or Member, or employee ofthe Company, or committees of the Company or Members, or by any other Person(including, without limitation, legal counsel and public accountants) as tomatters that the Director, Officer, Liquidator or Member reasonably believesare within such other Person’s professional or expert competence, includinginformation, opinions, reports or statements as to the value and amount of theassets, liabilities, Net Income or Net Losses of the Company, or the value andamount of assets or reserves or contracts, agreements or other undertakingsthat would be sufficient to pay claims and obligations of the Company or tomake reasonable provision to pay such claims and obligations, or any otherfacts pertinent to the existence and amount of assets from which distributionsto Members or creditors might properly be paid.

###  

**4.10        Indemnification.**

## ** **

### (a)           Indemnification Rights.  The Company shall indemnify and hold harmlesseach Indemnitee from and against any and all losses, claims, demands, costs,damages, liabilities, 

 

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### expenses of any nature(including attorneys’ fees and disbursements), judgments, fines, settlements(whether on an individual or joint and several basis) and other amounts arisingfrom any and all claims, demands, actions, suits or proceedings, whether civil,criminal, administrative, arbitral or investigative, in which the Indemniteewas involved or may be involved, or threatened to be involved, as a party orotherwise, arising out of or in connection with the business of the Company,this Agreement, any Person’s status as a Member, Officer or Director or anyaction taken by any Member, Officer or Director or under this Agreement orotherwise on behalf of the Company (collectively, “**Liabilities**”), regardless of whetherthe Indemnitee continues to be an Officer, a Director, a Member, or anAffiliate, officer, director, employee, trustee, member or partner or agent ofa Member, to the fullest extent permitted by the LLC Act and all otherapplicable laws; provided that an Indemnitee shall be entitled toindemnification hereunder only to the extent that such Indemnitee’s conduct didnot result from or constitute gross negligence or willful misconduct.  The termination of any proceeding bysettlement, judgment, order, conviction, or upon a plea of nolo contendere orits equivalent shall not, of itself, create a presumption that such Indemnitee’sconduct resulted from or constituted gross negligence or willful misconduct.

###  

### (b)           Expenses.  Expenses incurred by an Indemnitee indefending against any Liability or potential Liability subject to this Section 4.10shall, from time to time, be advanced by the Company prior to the finaldisposition of such Liability upon receipt by the Company of an undertakingreasonably acceptable in form and substance to the Board by or on behalf of theIndemnitee to repay such amount if it shall be determined that such Person isnot entitled to be indemnified as authorized in this Section 4.10.

###  

### (c)           Indemnification RightsNon-Exclusive; Rights of Indemnified Parties.  The indemnification provided by this Section 4.10shall be in addition to any other rights to which those indemnified may beentitled under any agreement, by a Majority Member Vote, as a matter of law orequity or otherwise.  Suchindemnification shall continue with respect to an Indemnitee even though it hasceased to serve in any particular capacity and shall inure to the benefit ofits heirs, executors, successors, assigns and other legal representatives.

###  

### (d)           Assets of the Company.  Any indemnification under this Section 4.10shall be satisfied solely out of the assets of the Company, and no Member shallbe subject to personal liability or required to fund or cause to be funded anyobligation by reason of these indemnification provisions.

###  

### (e)           Other Liability Insurance.  The Company may purchase and maintaininsurance, at the Company’s expense, on behalf of such Persons as the Boardshall reasonably determine, against any liability that may be asserted against,or any expense that may be incurred by, such Person in connection with theactivities of the Company and its Subsidiaries or Affiliates regardless ofwhether the Company would have the obligation to indemnify such Person againstsuch liability under the provisions of this Agreement.

###  

**4.11        Title to Assets.**  Unless specifically licensed or leased to theCompany, title to the assets of the Company, whether real, personal or mixedand whether tangible or intangible, shall be deemed to be owned by the Companyas an entity, and no Members, individually or 

 

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## **collectively, shall have anyownership interest in such assets (other than licensed or leased assets) or anyportion thereof.**

 

# **ARTICLE 5**

 

# **CAPITAL CONTRIBUTIONS; DISTRIBUTIONS**

 

**5.1          Capital Contributions.**

 

### (a)           The Members have made pre-ClosingDate Capital Contributions to the Company in exchange for Units in the amountsspecified as their respective pre-Closing Date Capital Contributions on Exhibit A.  Except as provided in this Section 5.1,no Member shall be required to make any other Capital Contribution to, orprovide credit support for, the Company.

###  

### (b)           On the Closing Date, subject to theobligations of the Company under the Equity Contribution Agreement and theKasima Parent Holdings LLC Agreement, each Member shall make a CapitalContribution to the Company, comprised of Cash and Equipment in the amountsspecified on Exhibit A.

###  

### (c)           If the Company receives an AdditionalRequired Funding Notice pursuant to the Equity Contribution Agreement, theCompany shall, as promptly as practicable (but in any event no later than noon,New York time, on the Business Day following receipt of such AdditionalRequired Funding Notice), deliver a copy of the body of such AdditionalRequired Funding Notice to each Member, together with a copy of such Member’sschedule to such Additional Required Funding Notice.  Each Member shall make a Capital Contributionto the Company in the amount specified on such schedule as such Member’s “AdditionalRequired Capital Contribution Amount” no later than noon, New York time, on theBusiness Day prior to the “Capital Contribution Date” set forth on suchAdditional Required Funding Notice.  Inthe event that a Member does not make a Capital Contribution to the Companyequal to or in excess of such amount, Kasima Parent Holdings LLC shall have theright, as a contractual third party beneficiary of this Section 5.1(c), torequire such Member to make a Capital Contribution to the Company in suchamount if the following conditions shall have been met: (i) there shallnot be funds in the Exhibitor Escrow Account sufficient to pay the unpaid costsof Kasima, LLC to which the Additional Required Funding Notice relates and (ii) thirty(30) days shall have passed and neither such Member nor the other Members shallhave made a Capital Contribution to the Company equal to or in excess of suchamount.

###  

### (d)           If the Company receives an Optional FundingNotice pursuant to the Equity Contribution Agreement, the Company shall, aspromptly as practicable (but in any event no later than noon, New York time, onthe Business Day following receipt of such Optional Funding Notice), deliver acopy of the body of such Optional Funding Notice to each Member, together witha copy of such Member’s schedule to such Optional Funding Notice and theCompany’s calculation of the following: (i) the amount of the “ProjectedOptional Existing Screen Contribution Amount” set forth on such Member’sschedule *plus* (ii) the amount of the “ProjectedOptional New Screen Contribution Amount” set forth on such Member’s schedule *minus* (iii) the amount of the cumulative CapitalContributions of such Member pursuant to Sections 5.1(c) and (d) (suchcalculated amount, such Member’s “**Projected Optional Capital**

 

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### **Contribution Amount**”).  Each Member may make a Capital Contributionin an amount up to the amount calculated as such Member’s Projected OptionalCapital Contribution Amount, and, if it elects to make such a CapitalContribution, the Member shall make such Capital Contribution no later thannoon, New York time, on the Business Day prior to the “Capital ContributionDate” set forth on such Optional Funding Notice.  Any Membermay elect to fund less than 100% of the amounts described in any such OptionalFunding Notice if it has determined that it will not during the applicableperiod be able or willing to fund 100% of the Capital Contribution required topermit the Company to enter binding purchase orders or installation ordersrelating to the Equipment listed onsuch Member’s schedule to such Optional Funding Notice (i.e., that Equipmentexpected to be installed during such period pursuant to an Installation Agreement to which the Member (or oneor more of its Affiliates) is a party).  To theextent that any Member does not timely fund100% of such amounts, the Company will instruct all designees on theboard of directors or comparable managing body of its Subsidiaries to causesuch Subsidiaries not to enter into bindingpurchase orders or installation orders in relation to such unfunded Equipmentpurchases and installations.  The Companyshall also instruct all designees on the board of directors orcomparable managing body of its Subsidiaries to cause such Subsidiaries to apply such funded amounts only to the Equipmentspecified by such partially funding Member.

###  

### (e)           Inaddition to the foregoing Capital Contributions, to the extent that the Companydoes not then have the requisite financial resources to perform its managerialand ministerial performance obligations under the Management ServicesAgreements during the current and succeeding fiscal quarter, pursuant to theperformance guarantee of the Exhibitors set forth in such Management ServicesAgreements, the Members shall make Capital Contributions to the Company that inthe aggregate equal the amount actually required to enable the Company toperform such obligations during the current and succeeding fiscal quarter.  Each Member shall fund a pro rata portion ofsuch aggregate Capital Contribution that is equal to the number of DigitalSystems deployed in such Member’s Screens divided by the number of DigitalSystems deployed in all Members’ Screens as of the end of month preceding thetime that the Capital Contribution is required. The Company shall give each Member a written notice of any CapitalContribution required pursuant to this Section 5.1(e) and each Membershall fund such Capital Contribution within five (5) Business Days of thedelivery of such notice.

###  

### (f)            Inaddition to the foregoing Capital Contributions, to the extent that the Companydesires to make additional capital contributions to Kasima Parent Holdings LLC,each Member may elect to make additional Capital Contributions to the Companyto fund such additional capital contributions to Kasima Parent Holdings LLC.

###  

### (g)           Subject to Section 10.3of this Agreement, the Company agrees to provide to each Member such additionalinformation with respect to each such Funding Notice as such Member mayreasonably request.  For the avoidance ofdoubt, no Member shall be permitted to receive or review any schedule to anyFunding Notice that pertains to the Capital Contributions to be made by anyother Member.

###  

### (h)           Except as otherwise provided in thisAgreement, no Member shall be entitled to withdraw, or demand the return of,any part of its Capital Contributions or Capital 

 

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### Account.  No Member shall be entitled to interest on orwith respect to any Capital Contribution or Capital Account.

###  

### (i)            No Person shall have any preemptive,preferential or similar right to subscribe for or to acquire any Units.

###  

**5.2          Loans from Members.**  Loans by Members to the Company shall not beconsidered contributions to the capital of the Company hereunder.  Any loan made by a Member shall not result inany increase in the amount of the Capital Account of such Member and shall bepayable or collectible in accordance with the terms and conditions upon whichadvances are made; provided that the terms of any such loan shall not be lessfavorable to the Company, taken as a whole, than would be available to theCompany from unrelated lenders and such loan shall be approved by the Board.

 

**5.3          Loans from Third Parties.**  The Company may incur Indebtedness, or enterinto other similar credit, guarantee, financing or refinancing arrangements forany purpose with any Person upon such terms as the Board determinesappropriate; provided that the Company shall not incur any Indebtedness that isrecourse to any Member, except to the extent otherwise agreed to in writing bythe applicable Member in its sole discretion.

 

**5.4          Non-Funding Member.**

## ** **

### (a)           If any Member does not make anyportion of a Capital Contribution under Sections 5.1(b), (c) or (e) ofthis Agreement, then such Member will be deemed to be a “**Non-Funding Member**”.  The Company shall promptly provide writtennotice of the absence of such Capital Contribution to such Non-Funding Memberand to the other Members.  If suchNon-Funding Member does not make such Capital Contribution within ten (10) BusinessDays after receipt of such notice, the Board, excluding Directors designated bythe Non-Funding Member, in its sole discretion based on a Majority DirectorVote shall have the right to take all or any of the following actions, inaddition to any other actions that may be available at law or in equity:

###  

#### (i)            charge such Non-Funding Member anadditional amount on the unpaid balance of any such Capital Contributions at anannual interest rate equal to the rate from time to time announced publicly bythe Wall Street Journal as its prime rate (the “**Prime Rate**”) plus four percentage points****from the date such Capital Contributionwas to be made through the date full payment for such Capital Contribution isactually made, and to the extent such additional amount is not otherwise paid,such additional amount may be deducted from any future distribution to suchMember;

####  

#### (ii)           determine that whenever the vote,consent or decision of the Members is required or permitted pursuant to thisAgreement, except as required by the LLC Act, such Non-Funding Member shall notbe entitled to participate in such vote or consent, or to make such decision,and such vote, consent or decision shall be tabulated or made as if suchNon-Funding Member was not a Member;

####  

#### (iii)          determine that any Director designatedby such Member shall not have the right to notice of or to attend and vote atmeetings of the Board or upon actions to be 

 

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#### taken by the Board without ameeting or determine that any such Director shall be removed from the Board;

####  

#### (iv)          assess a reduction in the number ofall Units and the Capital Account balance of the Non-Funding Member in amountsrepresenting a proportional amount of the Capital Contributions that suchNon-Funding Member has not made pursuant to Sections 5.1(b), (c) or (e) ofthis Agreement;

####  

#### (v)           determine that all distributions thatsuch Non-Funding Member would otherwise receive (whether in connection with adistribution pursuant to Section 5.5, the withdrawal of such Non-FundingMember, or a final distribution after dissolution of the Company) shall bereduced by an amount equal to such unpaid Capital Contribution, and any suchamounts withheld from such Non-Funding Member shall be distributed pro rata tothe other Members; or

####  

#### (vi)          offer to Members who are notNon-Funding Members the opportunity to purchase, at fair market value asdetermined by the Board in accordance with Section 5.6, a pro rata portionof the Units representing a proportional amount of the Capital Contributionsthat such Non-Funding Member has failed to make.

####  

### (b)           No right, power or remedy conferredupon the Board in this Section 5.4 shall be exclusive, and each suchright, power or remedy shall be cumulative and in addition to every otherright, power or remedy whether conferred in this Section 5.4 or otherwisehereunder or at law or in equity or by statute or otherwise.  No course of dealing between the Board andany Non-Funding Member and no delay in exercising any right, power or remedyconferred in this Section 5.4 now or hereafter existing at law or inequity or by statute or otherwise shall operate as a waiver or otherwiseprejudice any such right, power or remedy.

###  

**5.5          Distributions.**  All distributions made by the Company, ifany, shall be made in accordance with this Section 5.5.

## ** **

### (a)           Sole Discretion of the Board.  Except as expressly provided in thisAgreement, (i) the Company shall have no obligation to distribute any Cashor other property of the Company to the Members, (ii) the Company shallhave no obligation to liquidate assets to generate Cash balances fordistribution to the Members, (iii) Cash balances shall not include anyCapital Contribution pursuant to Section 5.1, (iv) the Board shallhave sole discretion in determining whether to distribute any Cash or otherproperty of the Company, when available, and in determining the timing, kindand amount of any and all distributions, and (v) no Member is entitled toreceive any distribution unless and until declared by the Board.  All distributions under this Section 5.5(a) shallbe made among the Members pro rata in accordance with their then applicablerelative Percentage Interests.

###  

### (b)           In the event that CapitalContributions are made pursuant to Section 5.1 with respect to ExcessCosts expected to be incurred but which Excess Costs ultimately are notincurred, the Company shall cause Kasima Parent Holdings LLC to cause all suchCapital Contributions that it receives as distributions from Kasima HoldingsLLC to be distributed to the Company and the Company shall distribute suchCapital Contributions to the Member or 

 

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### Members that made theCapital Contribution or Capital Contributions with respect to the Excess Coststhat were ultimately not incurred.

###  

### (c)           Distributions in Kind.  No Member has any right to demand or receiveproperty other than Cash.  However, theBoard may, in its sole discretion, elect to make distributions, entirely or inpart, in property of the Company other than Cash.  Property distributed in kind shall be deemedto have been sold for its valuation determined in accordance with Section 5.6.

###  

### (d)           Limitations on Distributions.  Notwithstanding anything in this Agreement tothe contrary:

###  

#### (i)            no distribution shall be made inviolation of the LLC Act; and

####  

#### (ii)           all amounts distributed in connectionwith a liquidation of the Company or the sale or other disposition of all orsubstantially all the assets of the Company that leads to a liquidation of theCompany will be distributed to Members in accordance with Section 7.3.

####  

### (e)           Exculpation.  The Members hereby consent and agree that,except as expressly provided herein or required by applicable law and exceptfor distributions not made in compliance with this Agreement, no Member shallhave an obligation to return Cash or other property paid or distributed to suchMember by the Company, whether such obligation would have arisen under§ 18-502(b) of the LLC Act or otherwise.

###  

**5.6          Valuation.**  All valuation determinations to be made underthis Agreement shall be made pursuant to the terms of this Section 5.6,which determinations shall be conclusive and binding on the Company, allMembers, former Members, their successors, assigns, legal representatives andany other Person, except for computational errors or fraud, and to the fullestextent permitted by law, no such Person shall have the right to an accountingor an appraisal of the assets of the Company or any successor thereto exceptfor computational errors or fraud. Valuations shall be determined by a reasonable method of valuationdetermined by the Board, which may include an independent appraisal, areasonable estimate by the Board or some other reasonable method ofvaluation.  Distributions of property inkind shall be valued at fair market value; provided that any valuation underthis Section 5.6 shall be determined by an independent appraiser selectedby the Board if so requested by any Founding Member.

## ** **

# **ARTICLE 6**

 

# **BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS;ALLOCATIONS**

 

**6.1          General Accounting Matters.**

 

### (a)           The Net Profits, Net Loss and/orother Tax Items of the Company shall be allocated for federal income tax andapplicable state and local income tax purposes pursuant to the provisions ofthe Allocations Exhibit, and such allocations shall be made at the end of eachFiscal Period, at such times as the Gross Asset Value of Company assets isadjusted pursuant to Section 1.2 of the Allocations Exhibit and atsuch other times as required by this Agreement.

 

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###  

### (b)           Each Member shall besupplied with the information of the Company necessary to enable such Member toprepare in a timely manner (and in any event within 120 days after the endof the Company Fiscal Year) its federal, state and local income tax returns andsuch other financial or other statements and reports that the Board deemsappropriate.

###  

### (c)           The Board shall keep orcause to be kept books and records pertaining to the Company’s business showingall of its assets and liabilities, receipts and disbursements, Net Income andNet Losses, Members’ Capital Accounts and all transactions entered into by theCompany.  Such books and records of theCompany shall be kept at the office of the Company and the Members and theirrepresentatives shall at all reasonable times have free access thereto for thepurpose of inspecting or copying the same.

###  

### (d)           The Company shall maintainseparate books of account for the Company, kept on an accrual basis or asotherwise provided by the Board and otherwise in accordance with GAAP, exceptthat for income tax purposes such books shall be kept in accordance withapplicable tax accounting principles.

###  

### (e)           The Company shall, and shallinstruct all designees on the board of directors or comparable managing body ofits Subsidiaries to cause such Subsidiaries to, (i) maintain accuratebooks and records reflecting its assets and liabilities and maintain proper andadequate “internal control over financial reporting” (as such term is definedin Rules 13a-15(f) and 15d-15(f) promulgated under the ExchangeAct, and as such rules may be amended and supplemented from time to time);and (ii) deliver to any Founding Member, immediately upon request,certifications and statements with respect to the Company and its Subsidiariessatisfying the requirements of Rule 13a-l4(a) or 15d-14(a) underthe Exchange Act, and 18 U.S.C. § 1350 (Section 906 of theSarbanes-Oxley Act of 2002).

###  

### (f)            Subject to theconfidentiality provisions of this Agreement, the Company will permitrepresentatives of a Founding Member and its Affiliates, at their expense, toobtain all books and accounts, documents and other information (other thandocuments and information relating to pricing or other proprietary informationof any Member or its Affiliates) in the possession of the Company and itsSubsidiaries, if any, as may reasonably be requested in order to enable suchFounding Member to monitor its investment in the Company and to exercise itsrights under this Agreement and, to the extent applicable, to provide suchother access and information as may be reasonably required to enable suchFounding Member to account for the investment in the Company and otherwisecomply with the requirements of applicable laws, generally accepted accountingprinciples and requirements of any Governmental Authority.

###  

## **6.2**          Certain Tax Matters.  The “tax matters partner” forpurposes of Section 6231(a)(7) of the Code shall be AMC (the “Tax Matters Member”).  The Tax Matters Member shallhave all the rights, duties, powers and obligations provided for in Sections6221 through 6232 of the Code with respect to the Company.  The Tax Matters Member shall inform eachother Member of all significant matters that may come to its attention in itscapacity as such by giving notice thereof within ten days after becoming awarethereof and, within such time, shall forward to each other Member copies of allsignificant written communications it may receive in such capacity.  The Tax Matters Member shall not take anyaction contemplated by Sections 

 

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## **6222 through 6231 of the Code without approval of the Board in accordancewith Section 4.5(r).  This provisionis not intended to authorize the Tax Matters Member to take any action left tothe determination of an individual Member under Sections 6222 through 6231 ofthe Code.  The Tax Matters Member shalltake such action as may be reasonably necessary to constitute each of the otherMembers as a “notice partner” within the meaning of Section 6231(a)(8) ofthe Code, provided, that the other Members provide the Tax Matters Member withthe information that is necessary to take such action.**

## ** **

## **6.3**          Elections.  Except as otherwise expressly providedherein, all elections required or permitted to be made by the Company under theCode or other applicable tax law, and all decisions with respect to thecalculation of its taxable income or tax loss under the Code or otherapplicable tax law, shall be made in such manner as may be reasonablydetermined by the Board; provided that the Company shall make the election toamortize organizational expenses pursuant to Section 709 of the Code andthe regulations promulgated thereunder.

## ** **

## **6.4**          Tax Year.  Unless otherwise required by the Code, thetaxable year of the Company shall be the same as its Fiscal Year.

## ** **

## **6.5**          Withholding Requirements.  Notwithstanding any provisionherein to the contrary, the Board is authorized to take any and all actionsthat it determines to be necessary or appropriate to insure that the Companysatisfies any and all withholding and tax payment obligations under Section 1441,1445, 1446 or any other provision of the Code or other applicable law.  Without limiting the generality of theforegoing, the Board may withhold from distributions the amount that itdetermines is required to be withheld from the amount otherwise distributableto any Member pursuant to Article 5; provided, however, that such amountshall be deemed to have been distributed to such Member for purposes ofapplying Article 5 and this Article 6.  The Board will not withhold any amounts fromCash or other property distributable to any Member to satisfy any withholdingand tax payment obligations to the extent that such Member demonstrates to theBoard to the satisfaction of the Board that such Member is not subject to suchwithholding and tax payment obligation. In the event that the Board withholds or pays tax in respect of anyMember for any period in excess of the amount of Cash or other propertyotherwise distributable to such Member for such period (or there is adetermination by any taxing authority that the Company should have withheld orpaid any tax for any period in excess of the tax, if any, that it actuallywithheld or paid for such period), such excess amount (or such additionalamount) shall be treated as a recourse loan to such Member that shall bearinterest at the rate of ten percent per annum and be payable on demand.

## ** **

## **6.6**          Reports to Members.

## ** **

### (a)           The books of account andrecords of the Company shall be audited as of the end of each Fiscal Year bythe Company’s independent public accountants.

###  

### (b)           Within 25 days afterthe end of each Fiscal Period of each Fiscal Year of the Company, the Companyshall send to each Person who was a Member during such period an unauditedreport setting forth the following as of the end of such Fiscal Period:

 

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#### (i)            unless such Fiscal Period isthe last Fiscal Period of the Fiscal Year, an unaudited balance sheet as of theend of such period;

####  

#### (ii)           unless such Fiscal Period isthe last Fiscal Period of the Fiscal Year, an unaudited income statement of theCompany for such period;

####  

#### (iii)          a statement of each Member’sCapital Account;

####  

#### (iv)          a summary of the Company’sactivities during such period; and

####  

#### (v)           a cash flow statement.

####  

### (c)           Within 40 days afterthe end of each Fiscal Year of the Company, the Company shall send to eachPerson who was a Member during such period an audited report setting forth thefollowing as of the end of such Fiscal Year:

###  

#### (i)            an audited balance sheet asof the end of such Fiscal Year;

####  

#### (ii)           an audited income statementof the Company for such Fiscal Year;

####  

#### (iii)          a statement of each Member’sCapital Account; and

####  

#### (iv)          a cash flow statement.

####  

### (d)           The Company hereby consentsto the filing by any Member of the Company’s financial statements with theSecurities and Exchange Commission to the extent such financial statements arerequired pursuant to the Securities and Exchange Commission’s Regulation S-X.

###  

### (e)           The Company shall provideeach Member with monthly “flash reports” when and in such form as determined bythe Board.

###  

### (f)            With reasonable promptness,the Board will deliver such other information available to the Board, includingfinancial statements and computations, as any Member may from time to timereasonably request in order to comply with regulatory requirements, includingreporting requirements, to which such Member is subject.

###  

## **6.7**          Auditors.  The auditors of the Company shall be selectedby the Board in their reasonable discretion.

## ** **

## **6.8**          Transfers During Year.  In order to avoid an interimclosing of the Company’s books, the allocation of Net Profits, Net Loss andother items under this Agreement between a Member who Transfers part or all ofits Interest in the Company during the Company’s Fiscal Year (or otherapplicable period) and such Member’s transferee, or to a Member whose number ofUnits varies during the course of the Company’s Fiscal Year (or otherapplicable period), may be determined pursuant to any method chosen by the Board.

 

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## **6.9**          Code Section 754 Election.  If requested by a Member, theCompany shall make the election provided for under Section 754 of theCode.  Any costs incurred by the Companyin implementing such election at the request of any Member shall be promptlyreimbursed to the Company by the requesting Member.

## ** **

## **6.10**        Tax Classification.  The Members intend that theCompany be classified as a partnership for federal, state and local income taxpurposes and shall take all reasonable actions as may be reasonably required toqualify for and receive such classification.

## ** **

# **ARTICLE 7**

# ** **

# **DISSOLUTION**

# ** **

## **7.1**          Dissolution.

## ** **

### (a)           The Company shall bedissolved and subsequently terminated upon the occurrence of the first of thefollowing events:

###  

#### (i)            the unanimous decision ofthe Members that then hold Units to dissolve the Company; or

####  

#### (ii)           the entry of a decree ofjudicial dissolution of the Company pursuant to Section 18-802 of the LLCAct;

####  

#### provided that theCompany may not be dissolved pursuant to clause (a)(i) prior to thetermination of the Transaction Documents.

####  

### (b)           Upon the occurrence of anyevent that causes the last remaining Member of the Company to cease to be aMember of the Company (other than upon continuation of the Company withoutdissolution upon an assignment by the Member of all of its Interest in theCompany and the admission of the transferee as a Member pursuant to Section 8.2),to the fullest extent permitted by law, the personal representative of suchMember is hereby authorized to, and shall, within 90 days after the occurrenceof the event that terminated the continued membership of such Member in theCompany, agree in writing (i) to continue the Company and (ii) to theadmission of the personal representative or its nominee or designee, as thecase may be, as a substitute Member of the Company, effective as of theoccurrence of the event that terminated the continued membership of such Memberin the Company.

###  

### (c)           Notwithstanding any otherprovision of this Agreement or the LLC Act (including Section 18-304thereof), the bankruptcy of a Member shall not cause the Member to cease to bea Member of the Company and upon the occurrence of such an event, the Companyshall continue without dissolution.

###  

## **7.2**          Winding-Up.  When the Company is dissolved, the businessand property of the Company shall be wound up in an orderly manner by the Boardor by a liquidating trustee as may be appointed by the Board (the Board or suchliquidating trustee, as the case may be, the “Liquidator”).  If the Founding Members are unable to agreewith respect to the distribution of any Company assets, then the Liquidatorshall use its reasonable best efforts to reduce to Cash 

 

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## **and Cash Equivalents such assets of the Company as the Liquidator shalldeem it advisable to sell, subject to obtaining fair market value for suchassets and any tax or other legal considerations.  No Member shall take any action (with respectto the Company) that is inconsistent with, or not necessary to or appropriatefor, the winding up of the Company’s business and affairs.**

## ** **

## **7.3**          Final Distribution.

## ** **

### (a)           As soon as reasonablypracticable following the event that caused the dissolution of the Company, theassets of the Company shall be distributed in the following manner and order:

###  

#### (i)            to pay the expenses of thewinding-up, liquidation and dissolution of the Company, and all creditors ofthe Company, other than Members, either by actual payment or by making a reasonableprovision therefor, in the manner, and in the order of priority, set forth in §18-804 of the LLC Act;

####  

#### (ii)           to pay, in accordance withthe provisions of this Agreement, on a pro rata basis, the debts payable to allcreditors of the Company that are Members, either by actual payment or bymaking a reasonable provision therefor;

####  

#### (iii)          to make any distribution ofthe kind described in Section 5.5(b) with respect to distributionsreceived from Kasima Parent Holdings LLC with respect to Excess Costs that areultimately not incurred; and

####  

#### (iv)          to distribute the remainingassets of the Company pro rata to the Members in accordance with theirrespective positive Capital Account balances, determined after all allocationsof Net Profit and Net Loss and all other items of income, gain, loss anddeduction have been made.

####  

#### If any Member has a deficit balance in itsCapital Account in excess of any unpaid Capital Contributions (if any), suchMember shall have no obligation to make any Capital Contribution to the Companywith respect to such excess deficit, and such excess deficit shall not beconsidered a debt owed to the Company or to any other Person for any purposewhatsoever.

####  

### (b)           Each Member shall looksolely to the assets of the Company for the amounts distributable to ithereunder and shall have no right or power to demand or receive propertytherefor from any other Member.

###  

### (c)           The Company shall terminatewhen (i) all of the assets of the Company, after payment of or dueprovision for all debts, liabilities and obligations of the Company shall havebeen distributed to the Members in the manner provided for in this Agreement,and (ii) the Certificate shall have been canceled in the manner requiredby the LLC Act.

 

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# **ARTICLE 8**

# ** **

# **TRANSFER; SUBSTITUTION; ADJUSTMENTS**

# ** **

## **8.1**          Restrictions on Transfer.

## ** **

### (a)           It is a condition to anyTransfer otherwise permitted hereunder that the transferee assumes by operationof law or by written instrument satisfactory to the Company pursuant to Section 8.l(b)(x) belowall of the obligations of the transferor Member under this Agreement and anyother agreement with the Company to which such transferor Member is a partywith respect to such Transferred Units, and no such Transfer (other thanpursuant to a statutory merger or consolidation wherein all obligations andliabilities of the transferor Member are assumed by a successor by operation oflaw) shall relieve the transferor Member (the “**Transferring Member**”) of its obligations under thisAgreement without the approval of the Board in accordance with Section 4.5(t),in its absolute discretion. Notwithstanding the foregoing, any transferee of any Transferred Unitsshall be subject to any and all ownership limitations contained in this Agreementor any other agreement with the Company to which such Transferring Member is aparty.  Any transferee, whether or notadmitted as a Member, shall take subject to the obligations of the TransferringMember hereunder.

###  

### (b)           In addition to any otherrestrictions on Transfer herein contained, including, without limitation, theprovisions of this Article 8, any purported Transfer or assignment of aUnit by any Member made in the following events shall be void ab initio(unless, in the case of the restriction set forth in Section 8.1(b)(vi) below,such Transfer is otherwise approved by the Board):

###  

#### (i)            to any Person who lacks thelegal right, power or capacity to own Units;

####  

#### (ii)           if such Transfer would causethe Company to become, with respect to any employee benefit plan subject toTitle I of ERISA, a “party-in-interest” (as defined in Section 3(14) ofERISA) or a “disqualified person” (as defined in Section 4975(c) ofthe Code);

####  

#### (iii)          if such Transfer would, inthe opinion of counsel to the Company, cause any portion of the assets of theCompany to constitute assets of any employee benefit plan pursuant toDepartment of Labor Regulations Section 2510.3-101;

####  

#### (iv)          if such Transfer requiresthe registration of such Units pursuant to any applicable federal, state orforeign securities laws or would otherwise violate any federal, state orforeign securities laws or regulations applicable to the Company or the Units;

####  

#### (v)           if such Transfer iseffectuated through an “established securities market” or a “secondary market(or the substantial equivalent thereof)” within the meaning of Section 7704of the Code or such Transfer would result in a materially increased risk thatthe Company would be treated as a “publicly traded partnership,” as such termis defined in Sections 469(k)(2) or 7704(b) of the Code;

 

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#### (vi)          if such Transfer results inthe Company being considered to have terminated within the meaning of Section 708of the Code;

####  

#### (vii)         if such Transfer subjectsthe Company to be regulated under the Investment Company Act of 1940, theInvestment Advisors Act of 1940 or ERISA, each as amended;

####  

#### (viii)        if such Transfer may causethe Company to cease to be classified as a partnership for federal or stateincome tax purposes;

####  

#### (ix)           if such Transfer violatesany applicable laws; or

####  

#### (x)            if the Company does notreceive written instruments (including without limitation, copies of anyinstruments of Transfer and such assignee’s consent to be bound by thisAgreement as an assignee) that are in a form satisfactory to the Board (in itssole and absolute discretion), or the assignee otherwise assumes by operationof law all of the obligations of the transferor Member under this Agreement andany other agreement with the Company to which such transferor Member is a partywith respect to such Transferred Units.

####  

## **8.2**          Substituted Members.

## ** **

### (a)           No Member shall have theright to substitute a transferee as a Member in his or her place with respectto any Units so Transferred (including any transferee permitted by Section 8.1)unless (i) such Transfer is made in compliance with the terms of thisAgreement and any other agreements with the Company or other Members to whichsuch transferor Member is a party and (ii) such transferee assumes, byoperation of law or by written instrument satisfactory to the Company pursuantto Section 8.l(b)(ix) above, all the rights and powers and is subjectto all the restrictions and liabilities that were applicable to the transferorby virtue of the transferor’s ownership of the Units being Transferred.

###  

### (b)           A transferee who has beenadmitted as a Member in accordance with Section 8.2(a) shall have allthe rights and powers and be subject to all the restrictions and liabilities ofa Member under this Agreement holding the same Units transferred thereto.  The admission of any transferee as a Membershall be subject to the provisions of Section 3.1.

###  

## **8.3**          Transfers to Permitted Transferees.

## ** **

### (a)           Notwithstanding anythingcontained herein to the contrary, each Member may Transfer any or all of itsUnits to such Member’s Permitted Transferees if each such Permitted Transfereeagrees by delivery to the Company of an acknowledgment to become a party to,and be bound by the terms of, this Agreement to the same extent as theapplicable transferor.

###  

### (b)           If any Member wishespursuant to this Section 8.3 to Transfer Units to any PermittedTransferee, such Member shall give written notice to the other parties heretoof its intention to make a Transfer permitted under this Section 8.3 notless than three Business Days prior to effecting such Transfer, which noticeshall state the name and address of any Permitted Transferee to whom suchTransfer is proposed to be made and the number of Units proposed to 

 

38

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### be Transferred to anyPermitted Transferee.  Upon suchTransfer, the Transferring Member shall remain a party to this Agreement andundertakes to the other Members hereto to procure the performance by itsPermitted Transferees of their obligations pursuant to the provisions of thisAgreement and to indemnify the other Members hereto from and against the breachby any such Permitted Transferee of any of its obligations under thisAgreement, unless otherwise released by the approval of the Board in accordancewith Section 4.5(t), in its absolute discretion.

###  

### (c)           If, while a Member holds anyUnits, a Permitted Transferee shall cease to qualify as a Permitted Transfereeunder this Agreement in relation to the Transferring Member from which suchPermitted Transferee or any previous Permitted Transferee of such TransferringMember received such Units, except upon a Change of Control of the TransferringMember or such Permitted Transferee, (an “**UnwindingEvent**”), then:

###  

#### (i)            the relevant TransferringMember shall forthwith notify the other parties hereto of the pendingoccurrence of such Unwinding Event; and

####  

#### (ii)           prior to such UnwindingEvent, such Transferring Member shall take all actions necessary to effect aTransfer of all Units held by the relevant Permitted Transferee either back tosuch Transferring Member or, pursuant to this Section 8.3, to a qualifyingPermitted Transferee of such Transferring Member.

####  

## **8.4**          Effect of Void Transfers.  No Transfer of any Units ownedby a Member in violation hereof shall be made or recorded on the books of theCompany, and any such purported Transfer shall be void and of no effect.

## ** **

## **8.5**          Third Party Transferee.  In connection with any Transferof Units by a Founding Member to any third party, other than a PermittedTransferee (a “Third Party Transferee”), such Third Party Transferee shall bebound by but not enjoy the benefits of this Agreement, except to the extentthat such Third Party Transferee becomes a substituted Member in accordancewith the provisions of Section 8.2 above (including compliance with theprovisions of Section 8.6 below).

## ** **

## **8.6**          Rights of First Offer.

## ** **

### (a)           If a Member (the “**Selling Member**”) intends to Transferany Units (other than pursuant to Section 8.3), the Selling Member shall firstgive written notice (a “**Seller’s Notice**”)to the Company and all of the Founding Members (other than the Selling Member)(the “**Offeree Members**”),stating the Selling Member’s intention to make such Transfer, the number ofUnits to be Transferred (the “**OfferedUnits**”), the name and address of the proposed Third PartyTransferee, the proposed price (which must be payable in Cash or marketablesecurities that have a value that is readily determinable) which the SellingMember proposes to accept for the Offered Units (the “**Offer Price**”) and the other materialterms upon which such Transfer is proposed, including, a copy of any offersreceived (if available and permitted pursuant to the terms thereof).

###  

### (b)           Upon receipt of the Seller’sNotice (the “**Offer**”), theCompany shall first have an irrevocable, non-transferable option to purchase(by itself or through one or more Affiliates who agree in writing to be boundby the terms of this Agreement) all of the Offered 

 

39

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### Units at the Offer Pricepayable in Cash and on terms no less favorable to the Offeree Members thanthose proposed by a Third Party Transferee. The option of the Company under this Section 8.6(b) shall beexercisable by written notice (a “**ResponseNotice**”) to the Selling Member and the Offeree Members givenwithin 30 Business Days from receipt of the Seller’s Notice.  If the Company does not deliver a ResponseNotice within the required period then the Company shall be deemed to haveelected not to exercise its option to purchase the Offered Units pursuant tothis Section 8.6(b).

###  

### (c)           Upon conclusion of the30 Business Day period referenced in Section 8.6(b) above, ifthe Company has not provided a Response Notice, or if the Company providesnotice of its affirmative intent not to accept the Offer (“**Company Rejection**”), then each OffereeMember shall each have an irrevocable, non-transferable option to purchase (byitself or through one or more Affiliates who agree in writing to be bound bythe terms of this Agreement) a portion of the Offered Units determined bymultiplying (x) the total number of Offered Units, by (y) a fraction,the numerator of which is the number of Units held by such Offeree Member, andthe denominator of which is the number of Units held by all Offeree Members, atthe Offer Price payable in Cash and on terms no less favorable to the OffereeMembers than those proposed by a Third Party Transferee.  The option of each Offeree Member under this Section 8.6(c) shallbe exercisable by a Response Notice to the Selling Member and the other OffereeMembers given within 30 Business Days after a Company Rejection.  If an Offeree Member does not deliver aResponse Notice within the required period such Offeree Member shall be deemedto have elected not to exercise its option to purchase Offered Units pursuantto this Section 8.6(c).

###  

### (d)           If one or more of theOfferee Members does not exercise its option to purchase all of the OfferedUnits offered to it pursuant to Section 8.6(c), then each other OffereeMember shall have an irrevocable, non-transferable option to purchase (byitself or through one or more Affiliates who agree in writing to be bound bythe terms of this Agreement) all of the balance of such Offered Units at theOffer Price by multiplying (x) the balance of such Offered Units, by (y) afraction, the numerator of which is the number of Units held by a participatingOfferee Member who has exercised its right under Section 8.6(c), and thedenominator of which is the number of Units held by all participating OffereeMembers who have exercised their rights under Section 8.6(c).  The option of such Offeree Members under thisSection 8.6(d) shall be exercisable by written notice (a “**Secondary Response Notice**”) to theSelling Member given the earlier of 30 Business Days from (x) receiptof the other Offeree Members’ Response Notice or (y) by the date suchother Response Notice was due.

###  

### (e)           If the Offeree Members donot exercise their options to purchase all of the Offered Units then theSelling Member shall be free, for a period of 90 days from the earlier of (i) theexpiration of the option periods with respect to such Offer pursuant toSections 8.6(c) or 8.6(d) and (ii) the date such Selling Membershall have received written notice from all the other Offeree Members statingthat such Offeree Members do not intend to exercise the options granted underthe foregoing provisions of this Section 8.6 to purchase all of theOffered Units, to sell all or part of the Offered Units as to which no ResponseNotice or Secondary Response Notice was delivered to the Third PartyTransferee, in each case at a price equal to or greater than the Offer Priceand with material terms no more favorable to the Third Party Transferee thanwere contained in the Offer.

 

40

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### (f)            In the event that theOfferee Members do not exercise their options to purchase (by themselves orthrough one or more Affiliates who agree in writing to be bound by the terms ofthis Agreement) all of the Offered Units at the Offer Price, and the SellingMember shall not have sold the Offered Units to a Third Party Transferee forany reason before the expiration of the 90-day period described in Section 8.6(e) orthe material terms (including the Offer Price) are more favorable to the ThirdParty Transferee then were disclosed in the Seller’s Notice, then all of theprovisions of this Section 8.6 shall again become applicable to anyTransfer of Units by the Selling Member.

###  

### (g)           If one or more of theOfferee Members effectively exercises its right of Offer hereunder, the closingof the purchase by the applicable Offeree Member of the Offered Units withrespect to which such right has been exercised shall take place on the fifthBusiness Day after the later of (i) the date that such Offeree Member gavenotice of such exercise and (ii) the expiration of such time as theOfferee Member may reasonably require in order to comply with applicable lawsand regulations.  Upon exercise by anyOfferee Member of its right of Offer under this Section 8.6, such OffereeMember and the Selling Member shall be legally obligated to consummate thepurchase contemplated thereby and shall use their reasonable efforts to secureany approvals required, to comply as soon as reasonably practicable with allapplicable laws and regulations, and to take all such other actions and toexecute such additional documents as are necessary or appropriate in connectiontherewith.  At such closing, the SellingMember shall Transfer the Offered Units free and clear of any liens andencumbrances and together with all rights attached thereto at the date ofTransfer, including any distribution declared but not paid in respect thereofand with all requisite transfer taxes, if any, paid, and the Offeree Membershall deliver payment in full for such Offered Units as provided in theapplicable Response Notice or Secondary Response Notice.

###  

# **ARTICLE 9**

# ** **

# **WITHDRAWAL OF MEMBER**

# ** **

## **9.1**          Withdrawal of a Founding Member.  Pursuant to Section 4.5 aFounding Member shall have the right to withdraw from the Company in the eventof a Budget Deadlock.  In the event aFounding Member has a right to withdraw from the Company, if such FoundingMember provides a notice of withdrawal (a “Withdrawal Notice”) to the Board noearlier than May 1st and no later than May 15th of the year in question, suchwithdrawal shall be effective on the first anniversary of the delivery of theWithdrawal Notice.  Within 30 days afterthe effective date of withdrawal, the Company shall distribute to such FoundingMember its Capital Account balance on the effective date of withdrawal, takinginto account all adjustments to Capital Accounts required under this Agreementthrough the date of distribution; provided that, (i) in the event the differencebetween such Capital Account balance and such Founding Member’s proportionalshare of the Company’s aggregate Cash balance on the effective date ofwithdrawal (which shall be determined pursuant to the formula in Section 5.5(a))is positive, then the Company shall withhold from such distribution, as apenalty for early withdrawal, such amount, and (ii) in the event thedifference between such Capital Account balance and such Founding Member’sproportional share of the Company’s aggregate Cash balance on the effectivedate of withdrawal (which shall be determined pursuant to the formula in Section 5.5(a))is zero or negative, then such Founding Member shall receive its proportionalshare of such Cash balance.

 

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**9.2          Effect of Withdrawal**.  This Agreement shall continue notwithstandingany withdrawal of any Founding Member and all governance or other rights setforth herein shall be exercised by the remaining Members.  No withdrawal shall relieve a Founding Memberof any prior breach of this Agreement.

 

# **ARTICLE 10**

 

# **MISCELLANEOUS**

# ** **

**10.1        Agreement to Cooperate; FurtherAssurances**.  In case atany time any further action is necessary or desirable to make any of thecontributions provided for by Article 5 (including obtaining anythird-party consents) or otherwise to carry out the purposes of this Agreement,the proper Officers and Directors of the Company and each Member and theirrespective Affiliates shall execute such further documents (includingassignments, acknowledgments and consents and other instruments of Transfer)and shall take such further action as shall be necessary or desirable to effectsuch Transfer and to otherwise carry out the purposes of this Agreement, ineach case to the extent not inconsistent herewith or with applicable law.

 

**10.2        Amendments**.  Except as otherwise expressly provided inthis Agreement, amendments to this Agreement shall require a Majority MemberVote; provided, however, that (i) this Agreement may not be amended so asto materially impair the voting power or economic rights of any outstandingUnits in relation to any other outstanding Units or of any Member in relationto the other Members, in either case, without the consent of each FoundingMember and the holders representing a majority of the then issued andoutstanding Units or the affected Member, as the case may be, and (ii) Section 4.5and Article 8 may only be amended with the approval of the Board inaccordance with Section 4.5(u) and a Majority Member Vote.

 

**10.3        Confidentiality**.  For a period of three years after the earlierof (x) the dissolution of the Company and the termination of thisAgreement or (y) the date upon which such Member ceases to be a Member ofthe Company:

## ** **

### (a)           (i)            EachMember shall use and cause its Affiliates to use the same degree of care ituses to safeguard its own Confidential Information (as defined below) and tocause its and its Affiliates’ directors, officers, employees, agents andrepresentatives to keep confidential all Confidential Information, includingbut not limited to Intellectual Property and other Proprietary Information ofthe other Members and the Company, and

###  

#### (ii)           Each Member shall hold and shallcause its Affiliates to hold and shall cause its and its Affiliates’ directors,officers, employees, agents and representatives to hold in confidence, unlesscompelled to disclose by judicial or administrative process or, in the opinionof counsel, by the requirements of law, all documents and informationconcerning any other party hereto furnished it by such other party or itsrepresentatives in connection with the transactions contemplated by thisAgreement (together with the information referred to in clause (i) above,the “**Confidential Information**”)),except to the extent that any such information can be shown to have been (A) previouslyknown by the party to which it is furnished lawfully and without breaching orhaving breached an obligation of such party or the 

 

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####  

#### disclosing party to keepsuch documents and information confidential, (B) in the public domainthrough no fault of the disclosing party, or (C) independently developedby the disclosing party without using or having used the ConfidentialInformation.

####  

### (b)           Each Member agrees that theConfidential Information of the Company shall only be disclosed in secrecy andconfidence, and is to be maintained by them in secrecy and confidence subjectto the terms hereof.  Each Member shall (i) not,directly or indirectly, use the Confidential Information of the Company, exceptas necessary in the ordinary course of the Company’s business, or disclose theConfidential Information of the Company to any third party and (ii) informall of its employees to whom the Confidential Information of the Company isentrusted or exposed of the requirements of this Section and of theirobligations relating thereto.

###  

### (c)           The Company shall preserve theconfidentiality of all Confidential Information supplied by the Members andtheir Affiliates (“**Member Information**”)to the same extent that a Member must preserve the confidentiality ofConfidential Information pursuant to Sections 10.3(a) and (b); provided,however, that each Member recognizes and agrees that the Company may and shalldisclose certain Confidential Information, including certain MemberInformation, to third parties pursuant to and to the extent required byTransaction Documents to which the Company and its Subsidiaries are party.

###  

### (d)           Member Information shall not besupplied by the Company (and the Company shall instruct all designees to theboard of directors of its Subsidiaries not to supply any such information) toany Person who is not an employee of the Company, including any employee of aMember or any Director who is not an employee of the Company.  Notwithstanding the foregoing, (i) MemberInformation may be disclosed to authorized third-party contractors of theCompany if the Company determines that such disclosure is reasonably necessaryto further the business of the Company, and if such contractor executes anon-disclosure agreement preventing such contractor from disclosing such MemberInformation for the benefit of each provider of Member Information in a formreasonably acceptable to the applicable Founding Member(s) and (ii) theCompany may and shall disclose certain Member Information, to third parties(including investors in or creditors of Subsidiaries and counterparties toTransaction Documents to which the Company or its Subsidiaries are party)pursuant to and to the extent required by Transaction Documents to which theCompany and its Subsidiaries are party. Member Information disclosed by any Member to the Company shall not beshared with any other Member without the disclosing Member’s written consent.

###  

**10.4        Injunctive Relief**.  The Company and each Member acknowledge andagree that a violation of any of the terms of this Agreement will cause theother Members and the Company, as the case may be, irreparable injury for whichan adequate remedy at law is not available. Accordingly, it is agreed that each of the Members and the Company willbe entitled to an injunction, restraining order or other equitable relief toprevent breaches of the provisions of this Agreement and to enforcespecifically the terms and provisions hereof in any court of competentjurisdiction, in addition to any other remedy to which they may be entitled atlaw or, equity.  Nothing stated hereinshall limit any other remedies provided under this Agreement or available tothe parties at law or in equity.

 

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## ** **

**10.5        Successors, Assigns and Transferees**.  The provisions of this Agreement will bebinding upon and will inure to the benefit of the parties hereto and theirrespective successors and Permitted Transferees, and nothing in this Agreement,express or implied, is intended to or shall confer upon any other Person,including but not limited to any creditor of the Company or its Subsidiaries,any right, benefit, or remedy of any nature by reason of this Agreement.  An assignment of the rights, interests orobligations hereunder, including but not limited to an assignment by operationof law, shall be null and void unless a provision of this Agreementspecifically provides otherwise or the Company gives its prior written consenttherefor.

 

**10.6        Notices**.  Any written notice required or permitted tobe delivered pursuant to this Agreement shall be in writing and shall be deemeddelivered:  (a) upon delivery ifdelivered in person; (b) upon transmission if sent via telecopier, withelectronic confirmation of receipt; (c) one Business Day after depositwith a nationally recognized courier service, provided that confirmation ofsuch overnight delivery is received by the sender; and (d) upontransmission if sent via e-mail, with a confirmation copy sent via telecopieron the same day with electronic confirmation of receipt.  Notices to the Company or any Member shall bedelivered to the Company or such Member as set forth in Exhibit A, as itmay be revised from time to time.  Eitherparty may change its address for notices by giving written notice of the newaddress to the other party in accordance with this Section, but any element ofsuch party’s address that is not newly provided in such notice shall be deemednot to have changed.

 

**10.7        Integration**.  This Agreement, together with the other JointVenture Agreements and the documents referred to herein or therein, ordelivered pursuant hereto or thereto, contain the exclusive entire and finalunderstanding of the parties with respect to the subject matter hereof andthereof.  There are no agreements,representations, warranties, covenants or undertakings with respect to thesubject matter hereof or thereto other than those expressly set forth herein ortherein.  Except as expressly set forthherein and therein, this Agreement, together with the other Joint VentureAgreements, supersede all other prior agreements, discussions, negotiations,communications and understandings between the parties with respect to suchsubject matter hereof and thereof.  Noparty has relied on any statement, representation, warranty, or promise notexpressly contained in this Agreement or another Joint Venture Agreement inconnection with this transaction.

 

**10.8        Severability**.  If one or more of the provisions, paragraphs,words, clauses, phrases or sentences contained herein, or the applicationthereof in any circumstances, is held invalid, illegal or unenforceable in anyrespect for any reason, then such provision, paragraph, word, clause, phrase orsentence shall be deemed restated to reflect the original intention of theparties as nearly as possible in accordance with applicable law and theremainder of this Agreement.  Thelegality and enforceability of any such provision, paragraph, word, clause, phraseor sentence in every other respect and of the remaining provisions, paragraphs,words, clauses, phrases or sentences hereof will not be in any way impaired, itbeing intended that all obligations, rights, powers and privileges of theCompany and the Members will be enforceable to the fullest extent permitted bylaw.  Upon such determination ofinvalidity, illegality or unenforceability, the Company and the Members shallnegotiate in good faith to amend this Agreement to effect the original intentof the Members.

 

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## ** **

**10.9        Counterparts**.  This Agreement may be executed in one or morecounterparts and by different parties on separate counterparts, each of whichwill be deemed an original, but all of which will constitute one and the sameinstrument.  The parties agree that thisAgreement shall be legally binding upon the electronic transmission, includingby facsimile or email, by each party of a signed signature page hereof tothe other party.

## ** **

**10.10      Governing Law; Submission toJurisdiction.**

## ** **

### (a)           This Agreement is to be construed inaccordance with and governed by the internal laws of the State of Delawarewithout giving effect to any choice of law rule that would cause theapplication of the laws of any jurisdiction other than the internal laws of theState of Delaware to the rights and duties of the parties.

###  

### (b)           Each party hereto agrees that anylegal action or other legal proceeding relating to this Agreement or theenforcement of any provision of this Agreement shall be brought or otherwisecommenced exclusively in any state or federal court located in Delaware or inNew York, New York.  Subject to thepreceding sentence, each party thereto:

###  

#### (i)            expressly and irrevocably consentsand submits to the jurisdiction of each state and federal court located inDelaware or New York, New York (and each appellate court located in Delaware orthe State of New York) in connection with any such legal proceeding, includingto enforce any settlement, order or award;

####  

#### (ii)           consents to service of process in anysuch proceeding in any manner permitted by the applicable laws of Delaware orthe State of New York, and agrees that service of process by registered orcertified mail, return receipt requested, at its address specified pursuant to Section 10.6is reasonably calculated to give actual notice, to the extent permitted byapplicable law;

####  

#### (iii)          agrees that each state and federalcourt located in Delaware or New York, New York shall be deemed to be aconvenient forum;

####  

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

####  

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

 

### (c)           In the event of any action or otherproceeding relating to this Agreement or the enforcement of any provision ofthis Agreement, the prevailing party (as determined by 

 

45

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###  

### the court) shall be entitledto payment by the non-prevailing party of all costs and expenses (includingreasonable attorneys’ fees) incurred by the prevailing party, including anycosts and expenses incurred in connection with any challenge to thejurisdiction or the convenience or propriety of venue of proceedings before anystate or federal court located in Delaware or New York, New York.

 

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

 
| ** ** | **AMERICAN MULTI-CINEMA, INC.** |
|------------|---------------------------------|
|       |                            |   |   |
|       |                            |   |   |
|       | By:                             | /s/ Kevin M. Connor |
|       |                            | Name: | Kevin M. Connor |
|       |                            | Title: | Senior Vice President |
|       |                            |   |   |
|       |                            |   |   |
| ** ** | **CINEMARK MEDIA, INC.**        |
|       |                            |   |   |
|       |                            |   |   |
|       | By:                             | /s/ Michael Cavalier |
|       |                            | Name: | Michael Cavalier |
|       |                            | Title: | Senior Vice President-General Counsel |
|       |                            |   |   |
|       |                            |   |   |
| ** ** | **REGAL/DCIP HOLDINGS, LLC**    |
|       |                            |   |   |
|       |                            |   |   |
|       | By:                             | /s/ Amy E. Miles |
|       |                            | Name: | Amy E. Miles |
|       |                            | Title: | Chief Executive Officer |

 

[SignaturePage to DCIP LLC Agreement]

 

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**Exhibit A**

** **

**Members,Units and Certain Capital Contributions**

 
| **Names and Addresses**                                                                                                                                                                                                                           | ** ** | **Pre-Closing  Date****Units** | ** ** | **Pre-Closing Date  Capital  Contributions** | ** ** | **Closing  Date  Capital  Contribution**                    | ** ** | **Total Units  (including  Closing Date  Units)** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|----------------------------------------------|------------|-------------------------------------------------------------|------------|---------------------------------------------------|
| ** **                                                                                                                                                                                                                                        | ** ** | ** **                     | ** ** | ** **                                   | ** ** | ** **                                                  | ** ** | ** **                                        |
| **AMC Founding Member:****American Multi-Cinema, Inc.******920 Main Street  Kansas City, MO 64105  Attention: Frank Rash, Senior Vice President  Telecopy: (816) 480-4619  Telephone: (816) 480-2521  Email: frash@amctheatres.com           | ** ** | **[* * *]**                    | ** ** | **[* * *]**                                  | ** ** | **[* * *]**                                                 | ** ** | **[* * *]**                                       |
| ** **                                                                                                                                                                                                                                        | ** ** | ** **                     | ** ** | ** **                                   | ** ** | ** **                                                  | ** ** | ** **                                        |
| **Cinemark Founding Member:  Cinemark Media, Inc.**3900 Dallas Parkway, Suite 500  Plano, TX 75093  Attention: Robert Copple, Chief Financial Officer  Telecopy: (972) 665-1003  Telephone: (972) 665-1116  Email: rcopple@cinemark.com | ** ** | **[* * *]**                    | ** ** | **[* * *]**                                  | ** ** | **[* * *]**                                                 | ** ** | **[* * *]**                                       |
| ** **                                                                                                                                                                                                                                        | ** ** | ** **                     | ** ** | ** **                                   |       |                                                        | ** ** | ** **                                        |
| **Regal Founding Member:  Regal/DCIP Holdings, LLC**7132 Regal Lane  Knoxville, TN 37918  Attention: Amy Miles  Telecopy: (865) 922-6085  Telephone: (865) 925-9422  Email: amy.miles@regalcinemas.com                                            | ** ** | **[* * *]**                    | ** ** | **[* * *]**                                  |       | Cash: $28,079,935 Equipment: $12,688,565 Total: $40,768,500 | ** ** | **[* * *]**                                       |

 

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[* * *]      Certain confidentialinformation contained in this document, marked by three asterisks, has beenomitted and filed separately with the Securities and Exchange Commissionpursuant to Rule 24b-2 of the Securities and Exchange Act of 1934, as amended.

 

A-1

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**Exhibit B**

 

**ALLOCATIONS EXHIBIT**

 

The provisions of thisAllocations Exhibit (“**Allocations Exhibit**”)form a part of and are incorporated into the Operating Agreement of DigitalCinema Implementation Partners, LLC******(the “**Agreement**”), to which it isattached as if these provisions were set forth in full in the Agreement.  Initially capitalized terms set forth in thisAllocations Exhibit and not otherwise defined herein shall have themeanings specified for such terms in Article 1 of the Agreement.

 

1.             **Capital Accounts**.

 

1.1.          **Establishment andMaintenance of Capital Accounts**. The Company shall establish and maintain for each Member a separateaccount (“**Capital Account**”) in accordancewith the rules of Treasury Regulations Section 1.704-1(b)(2)(iv) andthis Allocations Exhibit.  The CapitalAccount of each Member shall be increased by (i) the amount of cash or theGross Asset Value of any property contributed (or deemed contributed) by aMember to the Company (net of liabilities secured by the property or to whichthe property is subject) pursuant to the Agreement, (ii) the amount of NetProfits allocated to such Member pursuant to this Allocations Exhibit, and (iii) theamount of any other items of income or gain specially allocated to such Memberpursuant to this Allocations Exhibit. The Capital Account of each Member shall be decreased by (x) theamount of cash or Gross Asset Value (net of liabilities secured by the propertyor to which the property is subject) of any distributions of cash or propertymade to such Member pursuant to the Agreement, (y) the amount of Net Lossallocated to such Member pursuant to this Allocations Exhibit, and (z) theamount of any other items of deduction or loss specially allocated to suchMember pursuant to this Allocations Exhibit. The Capital Accounts of each Member shall be increased or decreased toreflect the revaluation of Company assets under Section 1.2 of thisAllocations Exhibit.

 

1.2.          **Revaluations of CompanyAssets**.

 

(i)            Consistentwith the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(f) andas provided in this Section 1.2, the Gross Asset Values of allCompany assets shall be adjusted upward or downward to reflect any UnrealizedGain or Unrealized Loss attributable to such Company assets, as of the times ofthe adjustments provided in Section 1.2(ii) of thisAllocations Exhibit, as if such Unrealized Gain or Unrealized Loss had beenrecognized on an actual sale of each such asset and allocated pursuant to thisAllocations Exhibit.

 

(ii)           Suchadjustments shall be made as of the following times: (w) immediately priorto the acquisition of an additional interest in the Company, after the datehereof, by any new or existing Member in exchange for more than a *de minimis* capital contribution; (x) immediately priorto the distribution by the Company to a Member of more than a *de minimis* amount of property as consideration for aninterest in the Company; (y) immediately prior to the liquidation of theCompany within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);and (z) such other times as determined by the Board, *provided*,*however*, that adjustments pursuant toclauses (w) 

 

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and (x) above shall be made only if the Board determines that suchadjustments are necessary or appropriate to reflect the relative economicinterests of the Members in the Company.

 

(iii)          Inaccordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e) theGross Asset Value of Company assets distributed in kind shall be adjustedupward or downward to reflect any Unrealized Gain or Unrealized Lossattributable to such Company assets, as of the time any such asset isdistributed.

 

(iv)          Indetermining Unrealized Gain or Unrealized Loss for purposes of this AllocationsExhibit, the aggregate cash amount and fair market value of all Company assets(including cash or cash equivalents) shall be determined by the Board usingsuch reasonable method of valuation as it may adopt, or in the case of aliquidating distribution pursuant to Article 7 of the Agreement, bedetermined and allocated by the Board using such reasonable methods ofvaluation as it may adopt.  The Boardshall allocate such aggregate value among the assets of the Company (in suchmanner as it may determine in its sole and absolute discretion to arrive at afair market value for individual properties).

 

1.3.          **Compliance withRegulations**.  The provisionsof this Allocations Exhibit relating to the maintenance of CapitalAccounts are intended to comply with Treasury Regulation Section 1.704-1(b),and shall be interpreted and applied in a manner consistent with such TreasuryRegulations.  In the event the Boarddetermines that it is prudent to modify the manner in which the CapitalAccounts, or any debits or credits thereto (including, without limitation,debits or credits relating to liabilities which are secured by contributed ordistributed property or which are assumed by the Company or a Member), arecomputed in order to comply with such Treasury Regulations, the Board may makesuch modification, provided that it is not likely to have any material effecton the amounts distributable to any person pursuant to Article 7 ofthe Agreement upon the dissolution of the Company.  The Board also shall (i) make anyadjustments that are necessary or appropriate to maintain equality between theCapital Accounts of the Members and the amount of Company capital reflected onthe Company’s balance sheet, as computed for book purposes, in accordance withTreasury Regulation Section 1.704-1(b)(2)(iv)(q), and (ii) make anyappropriate modifications in the event unanticipated events might otherwisecause the Agreement and this Allocations Exhibit not to comply withTreasury Regulation Section 1.704-1(b).

 

2.             **Allocation of Net Profitand Net Loss**.

 

2.1.          **Allocations to Members**. Except as otherwise provided in Article 3 of this Allocations Exhibit (including,without limitation, the special allocations related to Depreciation), NetProfits and Net Loss shall be allocated among the Members in accordance withtheir then respective Allocation Percentages.

 

2.2.          **Substantial EconomicEffect**.  The allocationprovisions contained in this Allocations Exhibit are intended to complywith Code Section 704(b) and the Treasury Regulations promulgatedthereunder.

 

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3.             **Special Allocations**.  Notwithstanding any other provision of theAgreement or this Allocations Exhibit, the following special allocations shallbe made in the following order:

 

3.1.          **Minimum Gain Chargeback**.  Notwithstanding any other provisions of thisAllocations Exhibit, if there is a net decrease in Partnership Minimum Gainduring any Fiscal Year (or other applicable period), each Member shall bespecially allocated items of Company income and gain for such year (and, ifnecessary, subsequent years) in an amount equal to such Member’s share of thenet decrease in Partnership Minimum Gain, as determined under TreasuryRegulation Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made inproportion to the respective amounts required to be allocated to each Memberpursuant thereto.  The items to be soallocated shall be determined in accordance with Treasury Regulation Section 1.704-2(f)(6).  This Section 3.1 is intended tocomply with the minimum gain chargeback requirements of Treasury Regulation Section 1.704-2(f) andshall be interpreted consistently therewith.

 

3.2.          **Partner Minimum GainChargeback**.  Notwithstandingany other provision of this Allocations Exhibit (except Section 3.1),if there is a net decrease in Minimum Gain Attributable to Partner NonrecourseDebt during any Fiscal Year (or other applicable period), each Member who has ashare of the Minimum Gain Attributable to such Partner Nonrecourse Debt,determined in accordance with Treasury Regulation Section 1.704-2(i)(5),shall be specially allocated items of Company income and gain for such year orperiod (and, if necessary, subsequent years or periods) in an amount equal tosuch Member’s share of the net decrease in such Minimum Gain Attributable toPartner Nonrecourse Debt, determined in accordance with Treasury Regulation Section 1.704-2(i)(5).  Allocations pursuant to the previous sentenceshall be made in proportion to the respective amounts required to be allocatedto each Member pursuant thereto.  Theitems to be so allocated shall be determined in accordance with TreasuryRegulation Section 1.704-2(i)(4). This Section 3.2 is intended to comply with the minimum gainchargeback requirement in such Section of the Treasury Regulations andshall be interpreted consistently therewith.

 

3.3.          **Qualified Income Offset**.  In the event any Member unexpectedly receivesany adjustments, allocations or distributions described in Treasury RegulationSections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or1.704-1(b)(2)(ii)(d)(6) and, after giving effect to the allocationsrequired under Articles 2 and 3 of this Allocations Exhibit as if this Section 3.3were not a part of this Agreement, such Member has an Adjusted Capital AccountDeficit, items of Company income and gain shall be specially allocated to suchMember in an amount and manner sufficient to eliminate, to the extent requiredby the Treasury Regulations, its Adjusted Capital Account Deficit created bysuch adjustments, allocations or distributions as quickly as possible.

 

#### 3.4.          **Gross Income Allocation**.  If any Member would otherwise have anAdjusted Capital Account Deficit as of the last day of any Fiscal Year (orother applicable period), individual items of income and gain of the Companyshall be specifically allocated to such Member (in the manner specified in Section 3.3of this Allocations Exhibit) so as to eliminate such deficit as quickly aspossible.

####  

#### 3.5.          **Limitations on Net LossAllocations**.  With respect toany Member, notwithstanding the provisions of Section 2.1, theamount of Net Losses for any Fiscal Year (or 

 

B-3

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####  

#### other applicable period) that would otherwisebe allocated to a Member under Section 2.1 shall not cause orincrease an Adjusted Capital Account Deficit. Any Net Loss in excess of the limitation set forth in this Section 3.5shall be allocated among the Members, pro rata, to the extent each,respectively, is liable with respect to any debt or other obligations of theCompany.

####  

3.6.          **Nonrecourse Deductions**.  Nonrecourse Deductions for any Fiscal Year(or other applicable period) shall be allocated among the Members in a mannersuch that the Members’ Capital Accounts would equal, as close as possible, theCapital Accounts that such Members would have without regard to any NonrecourseDeductions.

 

3.7.          **Partner NonrecourseDeductions**.  Any PartnerNonrecourse Deductions for any Fiscal Year (or other applicable period) shallbe specially allocated to the Member who bears the economic risk of loss, underTreasury Regulation Section 1.704-2(i)(1), with respect to the PartnerNonrecourse Debt to which such Partner Nonrecourse Deductions are attributablein accordance with Treasury Regulation Section 1.704-2(i)(2).

 

3.8.          **Code Section 754Adjustments**.  To the extent anadjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) ofthe Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),to be taken into account in determining Capital Accounts, the amount of suchadjustment to the Capital Accounts shall be treated as an item of gain (if theadjustment increases the basis of the asset) or loss (if the adjustmentdecreases such basis), and such item of gain or loss shall be speciallyallocated to the Members in a manner consistent with the manner in which theirCapital Accounts are required to be adjusted pursuant to such Section ofthe Treasury Regulations.

 

3.9.          **Curative Allocations**.  The foregoing allocations set forth in this Article 3(the “**Regulatory Allocations**”) areintended to comply with certain requirements of Treasury Regulation Sections1.704-1(b) and 1.704-2.  Notwithstandingany provisions of this Allocations Exhibit to the contrary (other than theRegulatory Allocations), the Regulatory Allocations shall be taken into accountin allocating other items of income, gain, loss and deduction among the Membersso that, to the extent possible, the cumulative net amount for the allocationsof Company items under the other Articles hereof shall be equal to the netamount that would have been allocated had the Regulatory Allocations notoccurred.  This Section 3.9 is intendedto minimize to the extent possible and to the extent necessary any economicdistortions which may result from application of the Regulatory Allocations andshall be interpreted in a manner consistent therewith.

 

3.10         **Depreciation**.  All Depreciation deductions attributable tothe Equipment installed to a Member’s Complexes shall be specially allocated tothat Member.  All other Depreciationdeductions shall be included as a component of Net Profits and Net Loss.

 

#### 3.11.        **Non-Funding Member**.  In the event that the Capital Accountbalances of the Members are adjusted to take account of a Non-Funding Memberpursuant to Section 5.4(a)(v) of the Agreement, Net Profitsand Net Loss, and individual items of Company income, gain, loss and deduction,shall be specially allocated to the Members to reflect the adjustmentcontemplated by Section 5.4(a)(v) of the Agreement.

 

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####  

#### 3.12**         Special Allocation**.  If, for federal income tax purposes, theCompany is deemed to have made a deductible payment to a Member that is notactually paid, then notwithstanding Section 2.1, the deductionattributable to such payment shall be specially allocated to such Member.

####  

4.             **Allocations for TaxPurposes**.

 

4.1.          **Generally**.  Except as otherwise provided in this Article,for federal income tax purposes, each item of income, gain, loss and deduction(a “**Tax Item**”) shall be allocated amongthe Members in the same manner as its correlative item of “book” income, gain,loss or deduction is allocated among the Members pursuant to this AllocationsExhibit.

 

4.2.          **Sections 1245/1250Recapture**.  If any portion ofgain from the sale of property is treated as gain which is ordinary income byvirtue of the application of Code Sections 1245 or 1250 (“**AffectedGain**”), then (A) such Affected Gain shall be allocatedamong the Members in the same proportion that the depreciation and amortizationdeductions giving rise to the Affected Gain were allocated and (B) otherTax Items of gain of the same character that would have been recognized, butfor the application of Code Sections 1245 and/or 1250, shall be allocated awayfrom that Member who is allocated Affected Gain pursuant to clause (A) sothat, to the extent possible, the other Member is allocated the same amount andtype, of capital gain that would have been allocated to it had Code Sections1245 and/or 1250 not applied.  Forpurposes hereof, in order to determine the proportionate allocations ofdepreciation and amortization deductions for each Fiscal Year (or otherapplicable period), such deductions shall be deemed allocated on the same basisas Net Profit and Net Loss for such Fiscal Year (or other applicable period).

 

4.3.          **TaxAllocations:  Code Section 704(c)**.  In accordance with Code Section 704(c) andthe Treasury Regulations promulgated thereunder, income, gain, loss anddeduction with respect to any asset contributed to the capital of the Companyshall, solely for tax purposes, be allocated among the Members so as to takeaccount of any variation between the adjusted basis of such asset to theCompany for federal income tax purposes and its initial Gross Asset Value.  In the event the Gross Asset Value of anyCompany asset is adjusted pursuant to this Allocations Exhibit, subsequentallocations of income, gain, loss and deduction with respect to such assetshall take account of any variation between the adjusted basis of such asset tothe Company for federal income tax purposes and its Gross Asset Value in thesame manner as under Code Section 704(c) and the Treasury Regulationspromulgated thereunder.  Any elections orother decisions relating to such allocations shall be made by the Board in anymanner that reasonably reflects the purpose and intention of this Agreement,provided that any items of loss or deduction attributable to propertycontributed by a Member shall, to the extent of an amount equal to the excessof (A) the federal income tax basis of such asset at the time of itscontribution over (B) the Gross Asset Value of such asset at such time, beallocated in its entirety to such contributing Member and the tax basis of suchasset for purposes of computing the amounts of all items allocated to any otherMember (including a transferee of the contributing Member) shall be equal toits Gross Asset Value upon its contribution to the Company. Allocationspursuant to this Section 4.3 are solely for purposes of federal,state, and local taxes and shall not affect, or in any way be taken intoaccount in computing, any Member’s Capital Account or share of Net Profits, NetLoss, other items, or distributions pursuant to any provision of thisAgreement.

 

B-5

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5.             **ExcessNonrecourse Liabilities**.

 

Any “excess nonrecourse liabilities” (within themeaning of Treasury Regulation Section 1.752-3(a)(3)) shall be allocatedto the Members based on their Allocation Percentages.

 

6.             **Definitions.**

 

6.1.          **“Adjusted Capital AccountDeficit”** means, with respect to any Member, the deficit balance, ifany, in such Member’s Capital Account as of the end of the relevant Fiscal Year(or other applicable period), after giving effect to the following adjustments:

 

(i)            Credit to suchCapital Account any amounts which such Member is obligated to restore or isdeemed to be obligated to restore pursuant to the penultimate sentences ofTreasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

 

(ii)           Debit to suchCapital 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 TreasuryRegulations.

 

The foregoing definition ofAdjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) ofthe Treasury Regulations and shall be interpreted consistently therewith.

 

6.2**           “Affected Gain**” shall havethe meaning set forth in Section 4.2 of this Agreement.

 

6.3           **“Allocation Percentages”**means the percentage that is equal to the DigitalSystems deployed in a Member’s Screens expressed as a percentage of allthe Digital Systems deployed in all theMembers’ Screens, as determined from time to time.

 

6.4.          **“Code”** meansthe Internal Revenue Code of 1986, as amended from time to time.

 

6.5.          **“Depreciation”**means, for each Fiscal Year (or other applicable period), an amount equal tothe depreciation, amortization, or other cost recovery deduction allowable withrespect to an asset for such Fiscal Year (or other applicable period), exceptthat if the Gross Asset Value of an asset differs from its adjusted basis forfederal income tax purposes at the beginning of such Fiscal Year (or otherapplicable period), Depreciation shall be an amount which bears the same ratioto such beginning Gross Asset Value as the federal income tax depreciation,amortization or other cost recovery deduction for such Fiscal Year (or otherapplicable period) bears to such beginning adjusted tax basis; provided,however, that if the adjusted basis for federal income tax purposes ofan asset at the beginning of such Fiscal Year (or other applicable period) iszero, Depreciation shall be determined with reference to such beginning GrossAsset Value using any reasonable method selected by the Board.

 

6.6.          **“Gross Asset Value”**means, with respect to any asset, the asset’s adjusted basis for federal incometax purposes, except as follows:

 

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(i)            the initial GrossAsset Value of any asset contributed by a Member to the Company shall be thegross fair market value of such asset on the date of contribution to theCompany, as determined by the contributing Member and the Board;

 

(ii)           the Gross AssetValues of all Company assets shall be adjusted in accordance with Section 1.2of this Allocations Exhibit; and

 

(iii)          the Gross AssetValue of an asset shall be adjusted each Fiscal Year (or other applicableperiod) by the Depreciation with respect to such asset taken into account forpurposes of computing Net Profits and Net Loss for such year (or otherapplicable period).

 

6.7.          **“Minimum Gain Attributableto Partner Nonrecourse Debt”** shall mean “partner nonrecourse debtminimum gain” as determined in accordance with Treasury Regulation Section 1.704-2(i)(2).

 

6.8.          **“Net Profits or Net Loss”**shall mean, for each Fiscal Year (or other applicable period), an amount equalto the Company’s taxable income or tax loss for such year or period, determinedin accordance with Section 703(a) of the Code (for this purpose, allitems of income, gain, loss or deduction required to be stated separatelypursuant to Section 703(a) of the Code shall be included in taxableincome or loss), with the following adjustments:

 

(i)            The computation ofall items of income, gain, loss and deduction shall be made without regard tothe fact that items described in Sections 705(a)(1)(B) or 705(a)(2)(B) ofthe Code are not includable in gross income or are neither currently deductiblenor capitalized for federal income tax purposes;

 

(ii)           Any income, gain orloss attributable to the taxable disposition of any Company asset shall bedetermined as if the adjusted basis of such asset as of such date ofdisposition were equal in amount to the Company’s Gross Asset Value withrespect to such asset as of such date;

 

(iii)          In lieu of thedepreciation, amortization, and other cost recovery deductions taken intoaccount in computing such taxable income or loss, there shall be taken intoaccount Depreciation for such Fiscal Year (or other applicable period);

 

(iv)          In the event theGross Asset Value of any Company asset is adjusted to reflect any UnrealizedGain or Unrealized Loss with respect to such asset pursuant to Section 1.2hereof, the amount of any such Unrealized Gain or Unrealized Loss shall betaken into account as gain or loss from the disposition of such asset; and

 

(v)           Any items speciallyallocated under Article 3 of this Allocations Exhibit shallnot be taken into account.

 

6.9.          **“Nonrecourse Deductions”**shall have the meaning set forth in Sections 1.704-2(b)(1) and (c) ofthe Treasury Regulations.

 

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6.10.        **“Nonrecourse Liabilities”**shall have the meaning set forth in Section 1.752-1(a)(2) of theTreasury Regulations.

 

6.11.        **“Partner Nonrecourse Debt”**shall have the meaning set forth in Section 1.704-2(b)(4) of theTreasury Regulations.

 

6.12.        **“Partner NonrecourseDeductions”** shall have the meaning set forth in Section 1.704-2(i)(1) ofthe Treasury Regulations.

 

6.13.        **“Partnership Minimum Gain”**shall have the meaning set forth in Sections 1.704-2(b)(2) and (d)(1) ofthe Treasury Regulations.

 

6.14.        “**Regulatory****Allocations**” shall have the meaning set forth in Section 3.9of this Allocations Exhibit.

 

6.15         “**Tax****Item**” shall have the meaning set forth in Section 4.1of this Allocations Exhibit.

 

6.16         “**Treasury Regulations**”means the federal income tax regulations, including any temporary regulations,promulgated under the Code, as such Treasury Regulations may be amended fromtime to time.  Any and all referencesherein to specific provisions of the Treasury Regulations shall be deemed torefer to any corresponding successor provisions.

 

6.17.        **“Unrealized Gain”**means, with respect to any Company asset as of any particular date, the excessof (i) the gross fair market value of such asset on such date asdetermined in accordance with Section 1.2 of this AllocationsExhibit, over (ii) the Gross Asset Value of such asset to the Company onsuch date.

 

6.18.        **“Unrealized Loss”** means, with respect to any Company assetas of any particular date, the excess of (i) the Gross Asset Value of suchasset to the Company on such date, over (ii) the gross fair market valueof such asset on such date, as determined in accordance with Section 1.2of this Allocations Exhibit as of such date.

 

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