Document:

Exhibit
10.4

 

AMENDMENT NO. 1

 

AMENDMENT NO. 1, dated as of
February 14, 2007 (this “Amendment”), by
and between AMC Entertainment Inc., a Delaware corporation (the “Company”), and Citicorp North America, Inc., as
administrative agent (in such capacity, the “Administrative
Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and the
Administrative Agent are parties to that certain Credit Agreement, dated as of January
26, 2006 (as amended, restated, modified or otherwise supplemented, the “Credit Agreement”), among the Company, Grupo Cinemex, S.A.
de C.V., a corporation organized under the laws of Mexico, Cadena Mexicana de
Exhibición, S.A. de C.V., a corporation organized under the laws of Mexico, the
Lenders and Issuers party thereto, the Administrative Agent and Banco Nacional
de Mexico, S.A., Integrante del Grupo Financiero Banamex, as Mexican Facility Agent;
and

 

WHEREAS,
subject to the terms and conditions set forth herein, the Company has requested
certain amendments to the Credit Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing, the parties hereto hereby agree as follows:

 

1.             Defined
Terms. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.

 

2.             Amendments. Effective as of the Effective Date (as
defined below) and subject to the terms and conditions set forth herein, the Credit
Agreement shall be amended as follows:

 

(a)           By deleting the definition of “Available Amount”
in Section 1.1 of the Credit Agreement in its entirety and inserting in lieu
thereof the following:

 

““Available
Amount” means, with respect to any Person, at any time, an amount
equal to the amount of “Restricted Payments”
(as defined in the New Subordinated Note Indenture) the Company would be
permitted to make under Section 4.06(a)(C)(1),
(2) and (3)
of the New Subordinated Note Indenture, such covenant contained in the New
Subordinated Note Indenture and all other terms of the New Subordinated Note
Indenture to which reference is made in such section, together with all related
definitions and ancillary provisions, being hereby incorporated into this
Agreement by this reference as though specifically set forth in this
definition; provided, however,
that for purposes of this Agreement, (a) with respect to Section
4.06(a)(C)(1) of the New Subordinated Note Indenture, the “Restricted Payments Computation Period” (as defined in the
New Subordinated Note Indenture) shall be deemed to have commenced on April 1,
2007, (b) with respect to Section 4.06(a)(C)(2) of
the New Subordinated Note Indenture, the aggregate net proceeds received by the
Company shall be calculated commencing April 1, 2007 and shall exclude any net
proceeds received in connection with the Merger, (c) with respect to Section 4.06(a)(C)(3) of the New Subordinated Note Indenture,
the aggregate net proceeds received by the Company shall be calculated
commencing April 1, 2007 and (d) any defined terms used in the New Subordinated
Note Indenture that have equivalent meanings in this Agreement or any other
Loan Document shall have such meaning so that the covenant made to the Trustee
(as defined in the New Subordinated Note Indenture) for the benefit of the
Holders (as defined in the New Subordinated Note Indenture) set forth in Section 4.06(a)(C)(1), (2) and (3) of the New Subordinated Note 

 

 

Indenture runs to the benefit of the Lenders under
this Agreement; provided, further,
that when used in this definition, the defined term “New
Subordinated Note Indenture” means the New Subordinated Note
Indenture, as in effect on the Closing Date and without giving effect to any
amendments, waivers or modifications thereto, or any termination, repayment,
defeasance, redemption, repurchase, or expiration thereof, in each case unless
separately expressly consented to in accordance with Section 11.1
(Amendments, Waivers, Etc.).”

 

(b)           By deleting Section 8.5(h) of
the Credit Agreement in its entirety and inserting in lieu thereof the
following:

 

“(h)         Restricted
Payments not otherwise permitted under this Section
8.5; provided, however, that the aggregate amount of all
such Restricted Payments, together with the aggregate amount of all Investments
made under Section 8.3(k), shall
not exceed (i) $200,000,000 plus
(ii) the Available Amount plus (iii) any
redemption, prepayment, defeasance, repurchase or other satisfaction prior to
the scheduled maturity of any subordinated Indebtedness of the Company or any
of its Subsidiaries in an aggregate principal amount of up to $600,000,000 to
the extent the Company has redeemed, prepaid, defeased, repurchased or otherwise
satisfied, as applicable, such Indebtedness pursuant to the terms thereof on or
prior to April 30, 2007;”

 

3.             Waiver.
During the period from February 12, 2007 to and including February 20, 2007
(the “Waiver Period”), the Requisite Lenders
hereby waive any Default or Event of Default arising as a result of the
Company’s failure to deliver to the Administrative Agent financial statements
for the Fiscal Quarter ending December 28, 2006 within 45 days after the end of
such Fiscal Quarter in accordance with Section 6.1(a)
of the Credit Agreement and the related Compliance Certificate in accordance
with Section 6.1(c) of the Credit Agreement
(collectively, the “Existing Default”);
provided, however, that upon the
occurrence of any Default or Event of Default other than the Existing Default,
the Waiver Period shall automatically and immediately terminate.

 

4.             Conditions
to Effectiveness of this Amendment. This Amendment shall become effective as of the date the following
conditions precedent have been satisfied (the “Effective
Date”):

 

(a)           the Administrative Agent shall have received (i) this Amendment, duly
executed and delivered by the Company and the Administrative Agent, (ii) the
Affirmation of Guarantors, in the form attached hereto as Annex A,
duly executed and delivered by each of the Guarantors, and (iii) Lender
Consents, in the form attached hereto as Annex B (the “Lender Consents”), duly executed by the Lenders constituting
the Requisite Lenders;

 

(b)           the Administrative Agent shall have received all fees and accrued
expenses of the Administrative Agent required to be paid by the Company,
including, without limitation, those set forth under Section 7
below;

 

(c)           after giving effect to this Amendment, each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of the date hereof, as if
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date; and

 

(d)           after giving effect to this Amendment, no Default or Event of Default shall
have occurred and be continuing on the date hereof.

 

2

 

5.             Representations
and Warranties. The Company
hereby represents and warrants to the Administrative Agent and the Lenders, on
and as of the date hereof, that:

 

(a)           (i) The Company has taken all necessary action to authorize the
execution, delivery and performance of this Amendment, (ii) this Amendment has
been duly executed and delivered by the Company and (iii) this Amendment is the
legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles.

 

(b)           After giving effect to this Amendment, each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents is true
and correct in all material respects on and as of the date hereof, as if made
on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties are true and correct in all material respects as
of such earlier date.

 

(c)           After giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing as of the date hereof.

 

6.             Continuing
Effect. Except as
expressly set forth in this Amendment, all of the terms and provisions of the
Credit Agreement and the other Loan Documents are and shall remain in full
force and effect and the Company and the other Loan Parties shall continue to
be bound by all of such terms and provisions. This Amendment is limited as specified
herein and shall not constitute an amendment or waiver of, or an indication of
the Administrative Agent’s or the Lenders’ willingness to amend or waive, any
other provisions of the Credit Agreement or the other Loan Documents for any
other date or purpose.

 

7.             Fees
and Expenses.

 

(a)           As consideration for the execution of this Amendment, the Company
agrees to pay to the Administrative Agent for the account of each Lender from
which the Administrative Agent shall have received (by facsimile or otherwise)
an executed Lender Consent on or prior to 12:00 noon (New York time) on February
14, 2007 an amendment fee equal to 0.05% of the sum of (i) such Lender’s
Revolving Credit Commitment then in effect and (ii) the principal amount of
such Lender’s Term Loans then outstanding.

 

(b)           The Company agrees to pay and reimburse the Administrative Agent for
all its reasonable costs and expenses incurred in connection with the
negotiation, preparation, execution and delivery of this Amendment, and all other
documents prepared in connection herewith, and the transactions contemplated
hereby, including, without limitation, reasonable fees and disbursements and
other charges of counsel to the Administrative Agent.

 

8.             Choice
of Law. This Amendment
and the rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New
York.

 

9.             Counterparts. This Amendment may be executed in any
number of counterparts and by different parties and separate counterparts, each
of which when so executed and delivered, shall be deemed an original, and all
of which, when taken together, shall constitute one and the same instrument. Delivery
of an executed counterpart of a signature page to this Amendment by facsimile
or e-mail shall be effective as delivery of a manually executed counterpart of
this Amendment.

 

3

 

10.           Integration. This Amendment, together with the other
Loan Documents, incorporates all negotiations of the parties hereto with respect
to the subject matter hereof and is the final expression and agreement of the
parties hereto with respect to the subject matter hereof.

 

11.           Severability. In case any provision in this Amendment
shall be invalid, illegal or unenforceable, such provision shall be severable
from the remainder of this Amendment and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

12.           Loan
Document. This Amendment
is a Loan Document.

 

13.           Waiver
of Jury Trial. EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AMENDMENT AND ANY OTHER LOAN DOCUMENT.

 

[SIGNATURE PAGES FOLLOW]

 

4

 

IN WITNESS WHEREOF, the
parties have entered into this Amendment as of the date first above written.

 

	
   

  	
  AMC
  ENTERTAINMENT INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CRAIG R. RAMSEY

  	
   

  
	
   

  	
  Name:
  Craig R. Ramsey

  
	
   

  	
  Title:
  Executive Vice President & CFO

  

 

 

[SIGNATURE PAGE TO AMENDMENT NO. 1]

 

 

	
   

  	
  CITICORP
  NORTH AMERICA, INC., as 

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CARL CHO

  	
   

  
	
   

  	
  Name:
  Carl Cho

  
	
   

  	
  Title:
  Director

  

 

 

[SIGNATURE PAGE TO AMENDMENT NO. 1]

 

 

ANNEX A

 

AFFIRMATION OF GUARANTORS

 

Each Guarantor hereby consents
to the Amendment No. 1 (the “Amendment”) to
which this Affirmation of Guarantors is attached and agrees that the terms thereof
shall not affect in any way its obligations and liabilities under the Loan
Documents (as amended and otherwise expressly modified by the Amendment) to
which it is a party, all of which obligations and liabilities shall remain in
full force and effect and each of which is hereby reaffirmed.

 

Consented to and agreed as
of

the date of the Amendment:

 

EACH GUARANTOR LISTED ON SCHEDULE I HERETO

 

	
  By:

  	
  /s/ CRAIG R.
  RAMSEY

  	
   

  
	
  Name: Craig R. Ramsey

  
	
  Title: Executive Vice President & CFO

  

 

DOWNTOWN BOSTON CINEMAS, LLC

LOEWS NORTH VERSAILLES CINEMAS, LLC

LOEWS PLAINVILLE CINEMAS, LLC

METHUEN CINEMAS, LLC

OHIO CINEMAS, LLC

RICHMOND MALL CINEMAS, LLC

SPRINGFIELD CINEMAS, LLC

WATERFRONT CINEMAS, LLC

 

By: Plitt Theatres, Inc., the Sole Member

 

	
  By:

  	
  /s/ CRAIG R.
  RAMSEY

  	
   

  
	
  Name: Craig R. Ramsey

  
	
  Title: Executive Vice President & CFO

  

 

GATEWAY CINEMAS, LLC

LEWISVILLE CINEMAS, LLC

LOEWS GARDEN STATE CINEMAS, LLC

 

By: RKO Century Warner Theatres, Inc., the Sole
Member

 

	
  By:

  	
  /s/ CRAIG R.
  RAMSEY

  	
   

  
	
  Name: Craig R. Ramsey

  
	
  Title: Executive Vice President & CFO

  

 

 

LOEWS CINEPLEX U.S. CALLCO, LLC

 

By: Loews Cineplex Theatres, Inc., the Sole Member

 

	
  By:

  	
  /s/ CRAIG R.
  RAMSEY

  	
   

  
	
  Name: Craig R. Ramsey

  
	
  Title: Executive Vice President & CFO

  

 

LOEKS-STAR PARTNERS

 

By: Star Theatres of Michigan, Inc., a General
Partner

 

	
  By:

  	
  /s/ CRAIG R.
  RAMSEY

  	
   

  
	
  Name: Craig R. Ramsey

  
	
  Title: Executive Vice President & CFO

  

 

 

SCHEDULE I

 

AMC
CARD PROCESSING SERVICES, INC.

AMC
ENTERTAINMENT INTERNATIONAL, INC.

AMC
REALTY, INC.

AMERICAN
MULTI -CINEMA, INC.

CENTERTAINMENT,
INC.

CLUB
CINEMA OF MAZZA, INC.

GCT
PACIFIC BEVERAGE SERVICES, INC.

NATIONAL
CINEMA NETWORK, INC.

PREMIUM
CINEMA OF YORKTOWN, INC.

PREMIUM
THEATER OF FRAMINGHAM, INC.

PREMIUM
THEATRE OF MAYFAIR, INC.

BRICK PLAZA CINEMAS, INC.

CRESCENT ADVERTISING
CORPORATION

ETON AMUSEMENT CORPORATION

FALL RIVER CINEMA, INC.

FARMERS CINEMAS, INC.

FORTY-SECOND STREET CINEMAS,
INC.

FOUNTAIN CINEMAS, INC.

JERSEY GARDEN CINEMAS, INC.

KIPS BAY CINEMAS, INC.

LANCE THEATRE CORPORATION

LCE ACQUISITIONSUB, INC.

LCE MEXICAN HOLDINGS, INC.

LIBERTY TREE CINEMA CORP.

LOEKS ACQUISITION CORP.

LOEWS AKRON CINEMAS, INC.

LOEWS ARLINGTON CINEMAS,
INC.

LOEWS ARLINGTON WEST
CINEMAS, INC.

LOEWS BALTIMORE CINEMAS,
INC.

LOEWS BEREA CINEMAS, INC.

LOEWS BRISTOL CINEMAS, INC.

LOEW’S CALIFORNIA THEATRES,
INC.

LOEWS CENTERPARK CINEMAS,
INC.

LOEWS CENTURY MALL CINEMAS,
INC.

LOEWS CHERI CINEMAS, INC.

LOEWS CHERRY TREE MALL
CINEMAS, INC.

LOEWS CHICAGO CINEMAS, INC.

LOEWS CINEPLEX ENTERTAINMENT
GIFT CARD CORPORATION

LOEWS CINEPLEX INTERNATIONAL
HOLDINGS, INC.

LOEWS CINEPLEX THEATRES
HOLDCO, INC.

LOEWS CITYWALK THEATRE
CORPORATION

LOEWS CONNECTICUT CINEMAS,
INC.

LOEWS DEAUVILLE NORTH
CINEMAS, INC.

LOEWS EAST HANOVER CINEMAS,
INC.

LOEWS FORT WORTH CINEMAS,
INC.

LOEWS FREEHOLD MALL CINEMAS,
INC.

LOEWS FRESH POND CINEMAS,
INC.

LOEWS GREENWOOD CINEMAS,
INC.

LOEWS HOUSTON CINEMAS, INC.

 

 

LOEWS LAFAYETTE CINEMAS,
INC.

LOEWS LINCOLN PLAZA CINEMAS,
INC.

LOEWS MEADOWLAND CINEMAS 8,
INC.

LOEWS MEADOWLAND CINEMAS,
INC.

LOEWS MERRILLVILLE CINEMAS,
INC.

LOEWS MONTGOMERY CINEMAS,
INC.

LOEWS MOUNTAINSIDE CINEMAS,
INC.

LOEWS NEW JERSEY CINEMAS,
INC.

LOEWS NEWARK CINEMAS, INC.

LOEWS PENTAGON CITY CINEMAS,
INC.

LOEWS RICHMOND MALL CINEMAS,
INC.

LOEWS RIDGEFIELD PARK
CINEMAS, INC.

LOEWS THEATRE MANAGEMENT
CORP.

LOEWS THEATRES CLEARING
CORP.

LOEWS TOMS RIVER CINEMAS,
INC.

LOEWS USA CINEMAS INC.

LOEWS VESTAL CINEMAS, INC.

LOEWS WASHINGTON CINEMAS,
INC.

LOEWS WEST LONG BRANCH
CINEMAS, INC.

LOEWS-HARTZ MUSIC MAKERS
THEATRES, INC.

LTM TURKISH HOLDINGS, INC.

MID-STATES THEATRES, INC.

MUSIC MAKERS THEATRES, INC.

NEW BRUNSWICK CINEMAS, INC.

NICKELODEON BOSTON, INC.

PARKCHESTER AMUSEMENT
CORPORATION

PARSIPPANY THEATRE CORP.

PLITT SOUTHERN THEATRES, INC.

PLITT THEATRES, INC.

RED BANK THEATRE CORPORATION

RKO CENTURY WARNER THEATRES,
INC.

S & J THEATRES INC.

SACK THEATRES, INC.

SOUTH HOLLAND CINEMAS, INC.

STAR THEATRES OF MICHIGAN,
INC.

STAR THEATRES, INC.

STROUD MALL CINEMAS, INC.

TALENT BOOKING AGENCY, INC.

THE WALTER READE
ORGANIZATION, INC.

THEATRE HOLDINGS, INC.

U.S.A. CINEMAS, INC.

WEBSTER CHICAGO CINEMAS,
INC.

WHITE MARSH CINEMAS, INC.

 

 

ANNEX B

 

LENDER CONSENT

 

Reference
is made to the Credit Agreement, dated as of January 26, 2006 (as amended, restated,
modified or otherwise supplemented, the “Credit Agreement”),
among AMC Entertainment Inc., a Delaware corporation (the “Company”),
Grupo Cinemex, S.A. de C.V., a corporation organized under the laws of Mexico,
Cadena Mexicana de Exhibición, S.A. de C.V., a corporation organized under the
laws of Mexico, the Lenders and Issuers party thereto, Citicorp North America,
Inc., as Administrative Agent (in such capacity, the “Administrative
Agent”), and Banco Nacional de Mexico, S.A., Integrante del Grupo Financiero
Banamex, as Mexican Facility Agent. Unless otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement are used
herein as therein defined.

 

The
Company has requested that the Lenders consent to the amendment of the Credit
Agreement on the terms and subject to the conditions described in the Amendment
No. 1 (the “Amendment”) to which this Lender Consent
is attached.

 

Pursuant
to Section 11.1(a) (Amendments,
Waivers, Etc.) of the Credit Agreement, the undersigned Lender
hereby consents to the Amendment and authorizes the Administrative Agent to
execute the Amendment on its behalf.

 

Consented to and agreed as
of

the date of the Amendment:

 

	
   

  	
   

  
	
  [NAME
  OF LENDER]

  

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:Exhibit
10.3

 

 

 

NATIONAL CINEMEDIA, LLC

THIRD AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

DATED AS OF FEBRUARY 13, 2007

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS

  	
  2

  
	
  1.1

  	
  Defined Terms

  	
  2

  
	
  1.2

  	
  Other Definitional Provisions; Interpretation

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 FORMATION

  	
  17

  
	
  2.1

  	
  Formation; Qualification

  	
  17

  
	
  2.2

  	
  Name

  	
  18

  
	
  2.3

  	
  Term

  	
  18

  
	
  2.4

  	
  Headquarters Office

  	
  18

  
	
  2.5

  	
  Registered Agent and Office

  	
  18

  
	
  2.6

  	
  Purposes

  	
  18

  
	
  2.7

  	
  Powers

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 MEMBERS AND INTERESTS

  	
  19

  
	
  3.1

  	
  Members.

  	
  19

  
	
  3.2

  	
  Meeting of Members

  	
  20

  
	
  3.3

  	
  Certain Duties and Obligations of the Members

  	
  21

  
	
  3.4

  	
  Units

  	
  21

  
	
  3.5

  	
  Authorization and Issuance of Additional Units

  	
  23

  
	
  3.6

  	
  Business Opportunities; Non-Competition

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 MANAGEMENT AND OPERATIONS

  	
  25

  
	
  4.1

  	
  Manager

  	
  25

  
	
  4.2

  	
  Management Authority

  	
  25

  
	
  4.3

  	
  Founding Member Approval Rights

  	
  26

  
	
  4.4

  	
  Duties

  	
  29

  
	
  4.5

  	
  Reliance by Third Parties

  	
  29

  
	
  4.6

  	
  Resignation

  	
  29

  
	
  4.7

  	
  Removal

  	
  29

  
	
  4.8

  	
  Vacancies

  	
  29

  
	
  4.9

  	
  Information Relating to the Company

  	
  29

  
	
  4.10

  	
  Insurance

  	
  29

  
	
  4.11

  	
  Transactions Between Company and Manager

  	
  30

  
	
  4.12

  	
  Officers

  	
  30

  
	
  4.13

  	
  Management Fee; Reimbursement of Expenses

  	
  30

  
	
  4.14

  	
  Limitation of Liability; Exculpation

  	
  30

  
	
  4.15

  	
  Indemnification

  	
  31

  
	
  4.16

  	
  Title to Assets

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 CAPITAL CONTRIBUTIONS; DISTRIBUTIONS

  	
  32

  
	
  5.1

  	
  Capital Contributions

  	
  32

  
	
  5.2

  	
  Loans from Members

  	
  33

  
	
  5.3

  	
  Loans from Third Parties

  	
  33

  
				

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Distributions

  	
  33

  
	
  5.5

  	
  Valuation

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS; ALLOCATIONS

  	
  35

  
	
  6.1

  	
  General Accounting Matters

  	
  35

  
	
  6.2

  	
  Certain Tax Matters

  	
  36

  
	
  6.3

  	
  Capital Accounts

  	
  36

  
	
  6.4

  	
  Allocations

  	
  37

  
	
  6.5

  	
  Allocations of Net Income and Net Losses for Federal Income Tax
  Purposes

  	
  39

  
	
  6.6

  	
  Elections

  	
  40

  
	
  6.7

  	
  Tax Year

  	
  40

  
	
  6.8

  	
  Withholding Requirements

  	
  40

  
	
  6.9

  	
  Reports to Members

  	
  40

  
	
  6.10

  	
  Auditors

  	
  41

  
	
  6.11

  	
  Transfers During Year

  	
  41

  
	
  6.12

  	
  Code Section 754 Election

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 DISSOLUTION

  	
  41

  
	
  7.1

  	
  Dissolution

  	
  41

  
	
  7.2

  	
  Winding-Up

  	
  42

  
	
  7.3

  	
  Final Distribution

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 TRANSFER; SUBSTITUTION; ADJUSTMENTS

  	
  43

  
	
  8.1

  	
  Restrictions on Transfer

  	
  43

  
	
  8.2

  	
  Substituted Members

  	
  44

  
	
  8.3

  	
  Effect of Void Transfers

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 REDEMPTION RIGHT OF MEMBER

  	
  45

  
	
  9.1

  	
  Redemption Right of a Member

  	
  45

  
	
  9.2

  	
  Effect of Exercise of Redemption Right

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 MISCELLANEOUS

  	
  46

  
	
  10.1

  	
  Agreement to Cooperate; Further Assurances

  	
  46

  
	
  10.2

  	
  Amendments

  	
  47

  
	
  10.3

  	
  Confidentiality

  	
  47

  
	
  10.4

  	
  Injunctive Relief

  	
  48

  
	
  10.5

  	
  Successors, Assigns and Transferees

  	
  48

  
	
  10.6

  	
  Notices

  	
  48

  
	
  10.7

  	
  Integration

  	
  48

  
	
  10.8

  	
  Severability

  	
  49

  
	
  10.9

  	
  Counterparts

  	
  49

  
	
  10.10

  	
  Governing Law; Submission to Jurisdiction

  	
  49

  
	
   

  	
   

  	
   

  
	
  Exhibit A Members and Units

  	
  A-1

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Exhibit B Over-Allotment Unit Purchase

  	
  B-1

  
	
   

  	
   

  	
   

  
	
  Exhibit C Form of Common Unit Certificate

  	
  C-1

  
				

 

iii

 

THIRD AMENDED AND
RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

NATIONAL CINEMEDIA, LLC

 

This Third
Amended and Restated Limited Liability Company Operating Agreement (this “Agreement”) of National CineMedia, LLC,
a Delaware limited liability company (the “Company”),
is made and entered into as of February 13, 2007, by and among each of the
parties hereto and amends and restates in full the Second Amended Agreement.

 

RECITALS

 

A.            National Cinema Network, Inc., a
Delaware corporation (“NCN”),
and Regal CineMedia Holdings, LLC, a Delaware limited liability company (“Regal” or the “Regal Founding Member”), formed the
Company and entered into the Limited Liability Company Operating Agreement of
National CineMedia, LLC, dated as of March 29, 2005 (the “Original
Agreement”).

 

B.            Cinemark Media, Inc., a Delaware
corporation (“Cinemark Media”
or the “Cinemark Founding Member”),
was admitted as a Founding Member in the Company pursuant to that certain
Contribution Agreement, dated as of July 15, 2005 (the “Contribution Agreement”), and that
certain Amended and Restated Limited Liability Company Operating Agreement of
National CineMedia, LLC, dated as of July 15, 2005 (the “First
Amended Agreement”).

 

C.            NCN merged with and into American Multi-Cinema,
Inc., a Missouri Corporation (“AMC” or the
“AMC Founding Member”), with AMC as
the surviving entity.

 

D.            The First Amended Agreement has been
amended pursuant to the First Amendment to the Amended and Restated Limited
Liability Company Operating Agreement of National CineMedia, LLC, dated as of December
12, 2006 (the “First Amendment”),
the Second Amendment to the Amended and Restated Limited Liability Company
Operating Agreement of National CineMedia, LLC, dated as of January 23, 2007
(the “Second Amendment”), and the Third
Amendment to the Amended and Restated Limited Liability Company Operating
Agreement of National CineMedia, LLC, dated as of February 7, 2007 (the “Third Amendment”, and together with
the First Amended Agreement, the First Amendment, and the Second Amendment, the
“Second Amended Agreement”).

 

E.             The Company and National CineMedia,
Inc., a Delaware corporation (“NCM Inc.”),
have entered into a Common Unit Subscription Agreement, dated as of February 13,
2007 (the “Subscription Agreement”),
pursuant to which the Company has agreed to issue Common Units to NCM Inc. as
more fully provided therein.

 

F.             AMC, Regal and Cinemark Media
desire to amend and restate the Second Amended Agreement to reflect the
addition of NCM Inc. as a Member in the Company and its designation as sole
Manager of the Company.

 

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G.            The respective board of directors
and manager of each of AMC, Regal and Cinemark Media, respectively, and the
board of directors of NCM Inc. have approved this Agreement.

 

The parties
hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

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

 

“Adjusted Capital Account Balance”
means, with respect to any Member, the balance in such Member’s Capital Account
after giving effect to the following adjustments:  (a) debits to such Capital Account of
the items described in Section l.704-1(b)(2)(ii)(d)(4-6) of the Treasury
Regulations, and (b) credits to such Capital Account of such Member’s
share of Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain or
of any amount which such Member would be required to restore under this
Agreement or otherwise. The foregoing definition of Adjusted Capital Account
Balance is intended to comply with the provisions of Section
l.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted
consistently therewith.

 

“Affiliate” means with respect to any
Person, any Person that directly or indirectly, through one or more
intermediaries Controls, is Controlled by or is under common Control with such
Person. Notwithstanding the foregoing, (i) no Member shall be deemed an
Affiliate of the Company, (ii) the Company shall not be deemed an
Affiliate of any Member, (iii) no stockholder of REG, or any of such
stockholder’s Affiliates (other than REG and its Subsidiaries) shall be deemed
an Affiliate of any Member or the Company, (iv) no stockholder of Marquee
Holdings, or any of such stockholder’s Affiliates (other than Marquee Holdings
and its Subsidiaries) shall be deemed an Affiliate of any Member or the
Company, (v) no stockholder of Cinemark, or any of such stockholder’s
Affiliates (other than Cinemark and its Subsidiaries) shall be deemed an
Affiliate of any Member or the Company, (vi) no stockholder of NCM Inc.
shall be deemed an Affiliate of NCM Inc., and (vii) NCM Inc. shall not be
deemed an Affiliate of any stockholder of NCM Inc.

 

“Agreement” has the meaning set forth in the
preamble of this Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

 

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

 

“AMC Founding Member” has the meaning
set forth in the Recitals of this Agreement.

 

“Applicable Tax Rate” means (i) 40%
or (ii) if, at the time of the relevant distribution described in Section
7.6(f) of the Senior Credit Facility, the highest combined federal, state and
local marginal rate applicable to corporate taxpayers residing in New York 

 

2

 

City,
New York, taking into account the deductibility of state and local income taxes
for federal income tax purposes shall exceed 40%, such higher rate.

 

“Available Cash” means for a
particular period:  (i) the Company’s
earnings before interest, taxes, depreciation and amortization (as determined in
accordance with GAAP); plus (ii) non-cash items of deduction or loss
(other than items related to barter transactions) subtracted in determining the
Company’s earnings under clause (i); plus (iii) interest income
received by the Company to the extent such income is not otherwise included in
determining the Company’s earnings under clause (i); plus (iv) amounts
received by the Company pursuant to the Loews Agreement or other similar
agreements to the extent such amounts are not otherwise included in determining
the Company’s earnings under clause (i); plus (v) amounts received by
the Company pursuant to the Common Unit Adjustment Agreement to the extent such
amounts are not otherwise included in determining the Company’s earnings under
clause (i); plus (vi) amounts received by the Company pursuant to
Section 3.5(c) to the extent such amounts are not otherwise included in
determining the Company’s earnings under clause (i); plus (vii) net
proceeds (after expenses attributable to the sale) from the sale of Company
assets to the extent such proceeds are not otherwise included in determining
the Company’s earnings under clause (i); plus (viii) for the second
Fiscal Period of each Fiscal Year, the amount of any Distribution Increase
attributable to the Distribution Year; plus (ix) for the fourth Fiscal
Period of each Fiscal Year, any amounts that the Company was not permitted to
distribute to the Members for each of the immediately preceding three Fiscal
Periods of such Fiscal Year as a result of the application of Section 7.6(h) of
the Senior Credit Facility (to the extent such amounts are not restricted under
Section 7.6(h) of the Senior Credit Facility as of the last day of the fourth
Fiscal Period); less (x) non-cash items of income or gain (other
than items related to barter transactions) added in determining the Company’s
earnings under clause (i); less (xi) amounts paid by the Company
pursuant to the Exhibitor Services Agreements, the Management Services
Agreement or other similar agreements to the extent such amounts are not
otherwise deducted in determining the Company’s earnings under clause (i); less (xii)
amounts paid by the Company pursuant to the Common Unit Adjustment Agreement to
the extent such amounts are not otherwise deducted in determining the Company’s
earnings under clause (i); less (xiii) taxes paid by the Company; less
(xiv) Capital Expenditures made by the Company; less (xv) for the
second Fiscal Period of each Fiscal Year, the amount of any Distribution
Decrease attributable to the Distribution Year; less (xvi) interest paid
by the Company on Funded Indebtedness; less (xvii) mandatory
principal payments made by the Company on Funded Indebtedness to the extent
such principal payments are made from funds other than funds that were restricted
pursuant to Section 7.6(h) of the Senior Credit Facility; less (xviii) amounts
(other than interest and principal payments) paid by the Company with respect
to Funded Indebtedness to the extent such amounts are not otherwise deducted in
determining the Company’s earnings under clause (i); provided, however,
that:  (a) amounts borrowed under,
and optional principal payments made on, the Revolving Credit Facility shall
not be taken into account in determining Available Cash; (b) amounts
received or paid by the Company pursuant to the terms of the Tax Receivable
Agreement shall not be taken into account in determining Available Cash; and
(c) for the Fiscal Period that includes the date of this Agreement, Available
Cash shall be determined beginning on the day following the date of this
Agreement through the last day of such Fiscal Period.

 

“Beneficial Owner” or “beneficial owner” (including, with
correlative meanings, the terms “beneficial
ownership” and “beneficially owns”)
has the meaning 

 

3

 

attributed
to it in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not
applicable, except that a Person shall be deemed to have Beneficial Ownership
of all Units that any such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time or is exercisable
only upon the occurrence of a subsequent condition.

 

“Board” has the meaning set forth in
Section 1.1 of the First Amended Agreement.

 

“Budget” means an annual operating and
capital budget of the Company, including, among other things, anticipated
revenues, expenditures (capital and operating), and cash and capital requirements
(including any additional capital contributions) of the Company for the
following year.

 

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

 

“Capital Account” has the meaning set
forth in Section 6.3(a) of this Agreement.

 

“Capital Contribution” means the total
amount of cash and the agreed fair market value (net of all liabilities secured
by such assets that the Company is considered to assume or take subject to
under Section 752 of the Code) of all other assets contributed to the Company
by a Member.

 

“Capital Expenditures” means all
expenditures by the Company for the acquisition or leasing (pursuant to a
capital lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements) that the Company is
required to capitalize for financial reporting purposes in accordance with
GAAP.

 

“Carrying Value” means, with respect to
any asset of the Company, the asset’s adjusted basis for federal income tax
purposes, except that the Carrying Values of all assets of the Company shall be
adjusted to equal their respective fair market values, in accordance with the
rules, events, and times, set forth in Treasury Regulations Section
l.704-l(b)(2)(iv)(f) and otherwise provided for in the rules governing
maintenance of Capital Accounts under Treasury Regulations, except as otherwise
provided herein; provided, however, that such adjustments shall
be made only if the Manager reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Members. The Carrying Value of any asset of the Company distributed to any
Member shall be adjusted immediately prior to such distribution to equal its
fair market value and depreciation shall be calculated by reference to Carrying
Value, instead of tax basis, once Carrying Value differs from tax basis. The
Carrying Value of any asset contributed (or deemed contributed under Treasury
Regulations Section l.704-1(b)(1)(iv)) by a Member to the Company will be the
fair market value of the asset at the date of its contribution thereto.

 

“Cash Equivalents” means any of the
following denominated in U.S. Dollars: 
(i) marketable direct obligations issued or unconditionally
guaranteed by the government of the United States or issued by any agency
thereof and backed by the full faith and credit of the United States maturing
within one year from the date of acquisition thereof; (ii) marketable 

 

4

 

direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from any of
Standard & Poor’s Corporation or any successor rating agency (“S&P”) or Moody’s Investors
Service, Inc. or any successor rating agency (“Moody’s”);
(iii) commercial paper maturing not more than one year from the date of
issuance thereof and, at the time of acquisition, having the highest rating
obtainable from either S&P or Moody’s; (iv) time deposits, certificates of
deposit or bankers’ acceptances, maturing not more than one year from the date
of issuance thereof, of any commercial bank or trust company having
capital and surplus in excess of $500,000,000 and the commercial paper of the
holding company of which has the highest rating obtainable from either S&P
or Moody’s; or (v) investments in money market funds complying with the
risk limiting conditions of Rule 2a-7 or any successor rule of the Securities
and Exchange Commission under the Investment Company Act of 1940, in each case
provided in clauses (i), (ii), (iii) and (iv) above, maturing within one year
from the date of acquisition.

 

“Cash Settlement” means
immediately available funds in an amount equal to the Redeemed Units
Equivalent.

 

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

 

“Change of Control” with respect to any
Person that is not an individual, means (i) any merger or consolidation
with or into any other entity or any other similar transaction, whether in a
single transaction or series of related transactions, where (A) the
members or stockholders of such Person immediately prior to such transaction in
the aggregate cease to own more than 50% of the general voting power of the
entity surviving or resulting from such transaction (or its stockholders or the
Ultimate Parent thereof) or (B) any Person or Group becomes the beneficial
owner of more than 50% of the general voting power of the entity surviving or
resulting from such transaction (or its stockholders or the Ultimate Parent
thereof), (ii) any transaction or series of related transactions in which
in excess of 50% of such Person’s general voting power is Transferred to any
other Person or Group or (iii) the sale or 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 or
indirectly, in the future.

 

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

 

“Cinemark Media” has the meaning set
forth in the Recitals of this Agreement or its successor.

 

“Cinemark USA” means Cinemark USA, Inc.,
a Texas corporation, or its successor.

 

“Class A Units” has the meaning set
forth in Section 1.1 of the First Amended Agreement.

 

5

 

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

 

“Common Unit” means a Unit having the rights described in Section 3.4(d)
of this Agreement.

 

“Common Unit Adjustment Agreement”
means the Common Unit Adjustment Agreement, dated as of February 13, 2007, by
and among the AMC Founding Member, the Regal Founding Member, Regal Cinemas,
the Cinemark Founding Member, Cinemark USA, NCM Inc. and the Company, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Common Unit
Purchase” has the meaning set forth in Section 3.4(b) of this Agreement.

 

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

 

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

 

“Contribution Agreement” has the meaning
set forth in the Recitals of this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Contribution and Unit Holders Agreement”
means the Contribution and Unit Holders Agreement, dated as of March 29,
2005, by and among the Company, RCM and AMC, as the successor to NCN, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Contribution Notice” has the
meaning set forth in Section 9.1(b) of this Agreement.

 

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

 

“CPI” means the monthly index of the
U.S. City Average Consumer Price Index for Urban Wage Earners and Clerical
Workers (All Items; 1982-84 equals 100) published by the United States
Department of Labor, Bureau of Labor Statistics or any successor agency that
shall issue such index. In the event that the CPI is discontinued for any
reason, the Manager shall use such other index, or comparable statistics, on
the cost of living for urban areas of the United States, as shall be computed
and published by any agency of the United States or, if no such index is
published by any agency of the United States, by a responsible financial
periodical of recognized authority.

 

6

 

“CPI Adjustment” means the quotient
of (i) the CPI for the month of January in the calendar year for which the CPI
Adjustment is being determined, divided by (ii) the CPI for January of 2007.

 

“DCN” has the meaning set forth in
Section 2.6(a) of this Agreement.

 

“Director Designation Agreement”
means the Director Designation Agreement, dated as of February 13, 2007, by and
among NCM Inc. and all of the Founding Members, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Distribution Amount” means, with
respect to a Fiscal Period, the lesser of (i) the Company’s Available Cash
as of the last day of such Fiscal Period (reduced by any amounts distributed by
the Company to NCM Inc. under Section 3.5(c)(ii)), or (ii) the amount that may
be distributed with respect to such Fiscal Period under Section 7.6 of the
Senior Credit Facility.

 

“Distribution Decrease” has the
meaning set forth in Section 5.4(a)(iii) of this Agreement.

 

“Distribution Increase” has the
meaning set forth in Section 5.4(a)(iii) of this Agreement.

 

“Distribution Year” has the meaning
set forth in Section 5.4(a)(iii) of this Agreement.

 

“Equity
Compensation Notice” has the meaning set forth in Section 3.5(c)(i) of this Agreement.

 

“Equity
Incentive Plan” means the National CineMedia, Inc. 2007 Equity Incentive Plan, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Equity Interests” means, with respect
to any Person, any and all shares, interests, participations or other
equivalents (however designated, whether voting or non-voting) of capital
stock, partnership interests (whether general or limited), limited liability
company interests or equivalent ownership interests in or issued by, or
interests, participations or other equivalents to share in the revenues or
earnings of (except as provided in any service agreement that includes a
revenue sharing component entered into in the ordinary course of business),
such Person or securities convertible into, or exchangeable or exercisable for,
such shares, interests, participations or other equivalents and options,
warrants or other rights to acquire such shares, interests, participations or other
equivalents; provided that discounts and rebates granted in the ordinary
course of business shall not in any event constitute an Equity Interest.

 

“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended and the rules and regulations
promulgated thereunder, as the same may be amended from time to time.

 

7

 

“ESA Party” means (i) AMC in the
case of AMC, (ii) Cinemark USA in the case of Cinemark Media, and (iii)
Regal Cinemas in the case of Regal.

 

“ESA-Related Tax Benefit Payment”
has the meaning set forth in Section 1.01 of the Tax Receivable Agreement.

 

“ESA-Related Payment” has the
meaning set forth in Section 1.01 of the Tax Receivable Agreement.

 

“Excess Nonrecourse Liability” has the
meaning set forth in Section 1.752-3(a)(3) of the Treasury Regulations.

 

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

 

“Exhibitor Services Agreement” means
each separate Exhibitor Services Agreement, dated as of February 13, 2007,
(i) by and between the Company and AMC, (ii) by and between the
Company and Regal Cinemas, and (iii) by and between the Company and
Cinemark USA, all as may be amended, supplemented or otherwise modified from
time to time.

 

“Final Circuit Share Payments” means
the payments to be made by the Company pursuant to the terms of that certain
letter agreement, dated as of February 13, 2007, by and among the Company, AMC,
Cinemark USA and Regal Cinemas.

 

“First Amended Agreement” has the meaning set forth in the
Recitals of this Agreement.

 

“First Amendment” has the meaning
set forth in the Recitals of this Agreement.

 

“Fiscal Month” means each fiscal
month within the Company’s Fiscal Year, as determined by the Manager.

 

“Fiscal Period” means each fiscal
quarter which shall consist of three Fiscal Months.

 

“Fiscal Year” means the fiscal year of
the Company ending on the first Thursday after December 25th of each year.

 

“Founding Member(s)” means each of the
AMC Founding Member, the Cinemark Founding Member and the Regal Founding
Member, and which shall include each of such Founding Member’s Permitted
Transferees so long as Section 8.2(c) is satisfied; provided that if a
Founding Member and all of its Permitted Transferees cease to own Common Units
(e.g., as a result of the surrender of Common Units pursuant to the Common Unit
Adjustment Agreement or the redemption of Common Units pursuant to the exercise
of the Redemption Right) the Founding Member and its Permitted Transferees shall
no longer be treated as a Founding Member under this Agreement notwithstanding
that the Founding Member or its Permitted Transferees may subsequently acquire
additional Common Units in the Company (e.g., 

 

8

 

pursuant
to the Common Unit Adjustment Agreement, in which event the Founding Member or
its Permitted Transferee will be treated as a Member under this Agreement).

 

“Founding Member Approval” means the
approval of each Founding Member (in each Founding Member’s sole discretion); provided
that a Founding Member shall not be entitled to participate in giving Founding
Member Approval as provided in Section 4.3(c).

 

“Founding Member Approval Rights” has the
meaning set forth in Section 4.3(a) of this Agreement.

 

“Founding Member Representation Letter”
has the meaning set forth in Section 4.1(i) of the Contribution and Unit
Holders Agreement.

 

“Funded Indebtedness” means the sum
of (i) Indebtedness of the Company under the Senior Credit Facility (including
the Preferred Unit Indebtedness and the Revolving Credit Facility), or any
refinancing thereof, plus (ii) additional Indebtedness, or any
refinancing thereof, of the Company as permitted under the terms of the Senior
Credit Facility.

 

“GAAP” means generally accepted
accounting principles in the United States in effect as of the relevant date on
which GAAP is to be determined.

 

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

 

“Group” has the meaning set forth in
Section 13(d)(3) and Rule 13d-5 of the Exchange Act.

 

“Indebtedness” means, with respect to
any Person, at any date, without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments issued by such Person,
(iii) all obligations of such Person to pay the deferred purchase price
for property or services, except trade accounts payable arising in the ordinary
course of business and consistent with past practice, (iv) all reimbursement
obligations of such Person in respect of letters of credit or other similar
instruments, (v) all Indebtedness of others secured by any lien,
encumbrance or mortgage on any asset of such Person, and (vi) all
Indebtedness of others guaranteed (whether by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain a minimum net worth, financial
ratio or similar requirements, or otherwise) by such Person.

 

“Indemnitee” has the meaning set forth
in Section 4.14(a) of this Agreement.

 

“Independent Directors” means any
director of NCM Inc. that, if the NCM Inc. common stock is traded on the NASDAQ
Stock Market, satisfies the definition of an “independent director” set forth
in the applicable rules in the Marketplace Rules of the NASDAQ Stock Market,
Inc., as such rules may be amended from time to time, or, if the NCM Inc.
common stock is then traded on a different exchange, such term shall mean any
director of NCM Inc. that satisfies the definition of independent director
according to the rules of such exchange.

 

9

 

“Initial ESA Modification Payment”
means the payments made by the Company under Section 2.05(a)(i) of the
Exhibitor Services Agreements.

 

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

 

“Interest” means a limited liability
company interest (other than Preferred Units) in the Company as provided in
this Agreement and under the LLC Act and, in addition, any and all rights and
benefits to which a Member is entitled under this Agreement, together with all
obligations of such Person to comply with, and rights to benefit from, the
terms and provisions of this Agreement.

 

“Joint Venture Agreements” means,
collectively, this Agreement, the Common Unit Adjustment Agreement, the
Contribution Agreement, the Contribution and Unit Holders Agreement (and
various related agreements executed simultaneously therewith), the Director
Designation Agreement, the Exhibitor Services
Agreements, the Founding Member Representation Letter, the Loews Agreement, the
Management Services Agreement, the Software License Agreement, the Subscription
Agreement and the Tax Receivable Agreement.

 

“Joint Venture Purposes” has the meaning
set forth in Section 2.6(c) of this Agreement.

 

“Liabilities” has the meaning set forth in Section 4.15(a) of this
Agreement.

 

“Liquidator” has the meaning set forth
in Section 7.2 of this Agreement.

 

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

 

“Loews Agreement” means the First
Amended and Restated Loews Screen Integration Agreement, dated as of February 13,
2007, by and among AMC and the Company, as the same may be amended,
supplemented or otherwise modified from time to time.

 

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

 

“Management Services Agreement” means the Management Services
Agreement, dated as of February 13, 2007, by and between the Company and NCM
Inc., as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Manager” has the meaning set forth in Section 4.1 of this
Agreement.

 

10

 

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

 

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

 

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

 

“NCM Inc.” has the meaning set forth in the Recitals of this
Agreement.

 

“NCM Inc. Redemption Price” means
the arithmetic average of the volume weighted average prices for a share of NCM
Inc. common stock on the principal United States securities exchange or
automated or electronic quotation system on which NCM Inc. common stock trades,
as reported by Bloomberg, L.P., or its successor, for each of the three (3)
consecutive full Trading Days ending on and including the last full Trading Day
immediately prior to the Redemption Date, subject to appropriate and equitable
adjustment for any stock splits, reverse splits, stock dividends or similar
events affecting the NCM Inc. common stock. If the NCM Inc. common stock no
longer trades on a securities exchange or automated or electronic quotation
system, then a majority of the Independent Directors of NCM Inc. shall
determine the NCM Inc. Redemption Price in good faith.

 

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

 

“Net Income” or “Net Losses”, as appropriate, means, for
any period, the taxable income or tax loss of the Company for such period for
federal income tax purposes, as determined in accordance with the accounting
method used by the Company for federal income tax purposes, taking into account
any separately stated tax items and increased by the amount of any tax-exempt
income of the Company during such period and decreased by the amount of any
Code Section 705(a)(2)(B) expenditures (within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(iv)(i)) of the Company; provided, however,
that (i) Net Income or Net Losses of the Company shall be computed without
regard to the amount of any items of gross income, gain, loss or deduction that
are specifically allocated pursuant to Section 6.4(b), and (ii) in determining
Net Income or Net Losses of the Company, any amounts paid under the Management
Services Agreement and any amounts paid under the Exhibitor Services
Agreements shall be treated as payments to a non-Member under Code Section 707.
In the event that the Capital Accounts are adjusted pursuant to an adjustment
to the Carrying Value of an asset of the Company or as otherwise provided for
in this Agreement, the Net Income or Net Losses of the Company (and the
constituent items of income, gain, loss and deduction) realized thereafter
shall be computed in accordance with the principles of Treasury Regulations
Section 1.704-1(b)(2)(iv)(g). If the Carrying Value of an asset is adjusted, such
asset shall be treated as having been sold for its fair market value and any
deemed gain or loss shall be taken into account in determining Net Income or
Net Losses.

 

11

 

“Nominating Committee” has the meaning
set forth in Section 1.1 of the Director Designation Agreement.

 

“Nonrecourse Debt” means any Company
liability to the extent that no Member or related person bears the economic
risk of loss for such liability under Section 1.752-2 of the Treasury Regulations.

 

“Options” means options, issued under the NCM Inc. Equity Incentive
Plan, to acquire common stock or other equity equivalents of NCM Inc.

 

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

 

“Over-Allotment Option” has the
meaning set forth in Section 3.4(c) of this Agreement.

 

“Over-Allotment Unit Purchase” has
the meaning set forth in Section 3.4(c) of this Agreement.

 

“Partner Nonrecourse Debt” means any
Company liability to the extent such liability is nonrecourse for purposes of
Section 1.1001-2 of the Treasury Regulations with respect to which a Member (or
related person within the meaning of Section 1.752-4(b) of the Treasury
Regulations) bears the economic risk of loss under Section 1.752-2 of the
Treasury Regulations because, for example, the Member or related person is a
creditor or guarantor with respect to such liability.

 

“Partner Nonrecourse Debt Minimum Gain”
has the meaning set forth in Section l.704-2(i)(2) of the Treasury Regulations
and, as provided therein, shall generally be the amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Debt.

 

“Partnership Minimum Gain” has the
meaning set forth in Section 1.704-2(b)(2) of the Treasury Regulations and, as
provided therein, shall generally be determined by computing, for each
Nonrecourse Debt of the Company, any Net Income the Company would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability and then aggregating the separate
amounts of Net Income so computed.

 

“Percentage Interest” means, with
respect to any Member at any time, the percentage represented by a fraction,
the numerator of which is the number of Common Units owned by such Member, and
the denominator of which is the aggregate number of Common Units then
outstanding, as shall be adjusted in accordance with Sections 3.4(f), 3.4(g),
3.5 and 9.1, and as otherwise provided in this Agreement.

 

“Permitted Transferee” means (i) in the
case of any Member and any Permitted Transferee of any Member, an
Affiliate of such Member or Permitted Transferee, or (ii) in the case of any
Founding Member and any Permitted Transferee of a Founding Member, a
non-Affiliate of such Founding Member or Permitted Transferee if more than 50%
of the non-

 

12

 

Affiliate’s
general voting power is owned directly or indirectly through one or more
entities that are the same entities that own 50% or more of the general voting
power of the Ultimate Parent of such Founding Member.

 

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

 

“Preferred Distribution” has the
meaning set forth in Section 3.4(e) of this Agreement.

 

“Preferred Unit” means Units having the rights described in Section
3.4(e) of this Agreement.

 

“Preferred Unit Amount” has the
meaning set forth in Section 3.4(e) of this Agreement.

 

“Preferred Unit Indebtedness” has
the meaning set forth in Section 3.4(e) of this Agreement.

 

“Proprietary Information” means all
Intellectual Property, including but not limited to information of a
technological or business nature, whether written or oral and if written,
however produced or reproduced, received by or otherwise disclosed to the
receiving party from or by the disclosing party that is marked proprietary or
confidential or bears a marking of like import, or that the disclosing party
states is to be considered proprietary or confidential, or that a reasonable
person would consider proprietary or confidential under the circumstances of
its disclosure.

 

“RCM” means Regal CineMedia Corporation,
a Virginia corporation, or its successor.

 

“Redeemed Units” has the meaning set
forth in Section 9.1(a) of this Agreement.

 

“Redeemed Units Equivalent” means
the product of (i) the Share Settlement, times (ii) the NCM Inc. Redemption
Price.

 

“Redeeming Member” has the meaning
set forth in Section 9.1(a) of this Agreement.

 

“Redemption Date” has the meaning
set forth in Section 9.1(a) of this Agreement.

 

“Redemption Notice” has the meaning
set forth in Section 9.1(a) of this Agreement.

 

“Redemption Right” has the meaning
set forth in Section 9.1(a)  of this
Agreement.

 

13

 

“REG” means Regal Entertainment Group or
its successor or any Person that wholly-owns REG, directly or indirectly, in
the future.

 

“Regal” has the meaning set forth in the
Recitals of this Agreement or its successor.

 

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

 

“Regal Founding Member” has the meaning
set forth in the Recitals of this Agreement.

 

“Regulatory Allocations” has the meaning
set forth in Section 6.4(c) of this Agreement.

 

“Retraction Notice” has the meaning
set forth in Section 9.1(b) of this Agreement.

 

“Revolving Credit Facility” has the
meaning set forth in Section 1.1 of the Senior Credit Facility, and any
refinancing thereof.

 

“Second Amended Agreement” has the meaning set forth in the
Recitals of this Agreement or its successor.

 

“Second Amendment” has the meaning
set forth in the Recitals of this Agreement or its successor.

 

“Section 704(c) Property” means any
asset of the Company if the Carrying Value of such asset differs from its
adjusted tax basis.

 

“Senior Credit Facility” means the Credit
Agreement, dated as of February 13, 2007, by and among the Company, the several
banks and other financial institutions or entities from time to time that are
parties thereto, Lehman Brothers Inc. and J.P. Morgan Securities, Inc., as
joint lead arrangers, JPMorgan Chase Bank, N.A., as syndication agent, Credit
Suisse (USA) LLC and Morgan Stanley Senior Funding, Inc., as co-documentation
agents, and Lehman Commercial Paper Inc., as administrative agent, as amended,
modified or supplemented from time to time and any extension, refunding,
refinancing or replacement (in whole or in part) thereof.

 

“Services” has the meaning set forth
in Article 1 of the Exhibitor Services Agreements.

 

“Share
Settlement” means a number of shares of NCM Inc. common stock equal to the number
of Redeemed Units.

 

“Software License Agreement” means the Second
Amended and Restated Software License Agreement, dated of even date herewith,
by and among the Company, RCM, 

 

14

 

AMC
and Cinemark USA, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Subscription Agreement” has the meaning set forth in the
Recitals of this Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

 

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

 

“Tax Distribution Amount” means the
product of (i) the Applicable Tax Rate, times (ii) the estimated or actual
taxable income of the Company, as determined for federal income tax purposes,
for the period to which the Tax Distribution Amount relates.

 

“Tax Matters Member” has the meaning set
forth in Section 6.2 of this Agreement.

 

“Tax Receivable Agreement” means the
Tax Receivable Agreement, dated as of February 13, 2007, by and among the
Company, NCM Inc., all of the Founding Members, Regal Cinemas and Cinemark USA,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Tax Receivable Distribution Amount”
means the sum of (i) the amount that NCM Inc. is obligated to pay to the
Founding Members pursuant to Section 3.01 of the Tax Receivable Agreement, plus
(ii) the amount that NCM Inc. is obligated to contribute to the Company
pursuant to Section 5.1(b) of this Agreement, both for the period to which the
Tax Receivable Distribution Amount relates.

 

“TEFRA Election” means the election
under Code Section 6231(a)(1)(B)(ii) and Treasury Regulations Section
301.6231(a)(1)-1(b) to have the provisions of subchapter C of chapter 63 of the
Code and the corresponding Treasury Regulations apply with respect to the
Company.

 

“Third Amendment” has the meaning
set forth in the Recitals of this Agreement or its successor.

 

“Trading Day” means a day on which
the principal United States securities exchange on which NCM Inc. common stock
is listed or admitted to trading, or the NASDAQ 

 

15

 

Stock
Market if NCM Inc. common stock is not listed or admitted to trading on any such
securities exchange, as applicable, is open for the transaction of business
(unless such trading shall have been suspended for the entire day).

 

“Transfer” (including the terms “Transferred” and “Transferring”) means, directly or
indirectly, to sell, transfer, give, exchange, bequest, assign, pledge,
encumber, hypothecate or otherwise dispose of, either voluntarily or
involuntarily (including (i) except as provided in clause (a) below, the direct
or indirect Change of Control of any Member or Permitted Transferee (or any
direct or indirect holder of equity in a Member or Permitted Transferee), and
(ii) upon the foreclosure under any pledge or hypothecation permitted by clause
(b) below that results in a change of title), any Equity Interests in the Company
or other assets beneficially owned by a Person or any interest in any Equity
Interests in the Company or other assets beneficially owned by a Person. Notwithstanding
the foregoing:  (a) the Change of
Control of an ESA Party or its stockholders shall not be deemed to be a
Transfer hereunder, and (b) a bona fide pledge of the Units or other
Equity Interests in the Company by any Member or its Affiliates shall not be
deemed to be a Transfer hereunder.

 

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

 

“Treasury Regulations” means the federal
income tax regulations, including any temporary regulations, promulgated under
the Code, as such Treasury Regulations may be amended from time to time. Any
and all references herein to specific provisions of the Treasury Regulations
shall be deemed to refer to any corresponding successor provisions.

 

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

 

“Underwriters” has the meaning set
forth in Section 1.1 of the Unit Purchase Agreement.

 

“Underwriting Agreement” has the
meaning set forth in Section 1.1 of the Unit Purchase Agreement.

 

“Unit” means a fractional share of the
Interests (other than Preferred Units) of all Members issued in accordance with
the terms of this Agreement. The number of Units outstanding and the holders
thereof shall be set forth on Exhibit A, as such may be amended
from time to time in accordance with this Agreement.

 

“Unit Purchase Agreement” means the
Unit Purchase Agreement, dated as of January 23, 2007, by and among NCM Inc.,
the AMC Founding Member, the Cinemark Founding Member and the Regal Founding
Member, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Unvested NCM Inc. Shares” means
shares of NCM Inc. common stock issued pursuant to the Equity Incentive Plan
that are not Vested NCM Inc. Shares.

 

16

 

“Vested NCM Inc. Shares” has the
meaning set forth in Section 3.5(c)(ii) of this Agreement.

 

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

 

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 this Agreement as a whole, including the
Exhibits and Schedules attached hereto, and not to any particular provision of
this Agreement. Articles, section and subsection references are to this
Agreement unless otherwise specified.

 

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

 

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

 

(d)           The
meanings given to capitalized terms defined herein will be equally applicable
to both the singular and plural forms of such terms. Whenever the context 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 the Company (the “Certificate”) has been executed by an
authorized person and was filed with the Secretary of State of the State of
Delaware on March 29, 2005, to form on such date the Company as a limited
liability company pursuant to the LLC Act. The rights, duties and liabilities
of the Members shall be as provided in the LLC Act, except as otherwise
provided in this Agreement.

 

(b)           The
Company shall be qualified or registered under foreign limited liability
company statutes or assumed or fictitious name statutes or similar laws in any
jurisdiction in which the Company owns property or transacts business to the
extent, in the judgment of the Manager, such qualification or registration is
necessary or advisable in order to protect the limited liability of the Members
or to permit the Company lawfully to own property or transact business. The
Manager shall, to the extent necessary in the judgment of the Manager, maintain
the Company’s good standing in each such jurisdiction.

 

(c)           The
Manager and any Person to whom the Manager delegates authority under this
Agreement shall be an “authorized person” within the meaning of
§ 18-204(a) of the LLC Act, and shall have the power and authority to
execute, file and publish any certificates, notices, statements or other
documents (and any amendments or restatements thereof) necessary 

 

17

 

to permit the Company to conduct business as
a limited liability company in each jurisdiction where the Company elects to do
business.

 

2.2          Name.
The name of the limited liability company formed by the filing of the
Certificate is “National CineMedia, LLC.” 
However, the business of the Company may be conducted upon compliance
with all applicable laws under any other name designated by the Manager.

 

2.3          Term.
The term of the Company has commenced as of the date of filing the Certificate
and will continue in perpetuity; provided that the Company may be
dissolved in accordance with the provisions of this Agreement or by the LLC
Act.

 

2.4          Headquarters
Office. The Company’s headquarters office shall initially be
located in Centennial, Colorado. The Manager may determine to open, close or
move any office at any time in its absolute discretion.

 

2.5          Registered
Agent and Office. The address of the Company’s registered office
in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City
of Wilmington, County of New Castle, Delaware 19801. The name of the Company’s
registered agent at such address is Corporation Trust Company. The Manager may
at any time designate another registered agent or registered office or both.

 

2.6          Purposes.
The purpose of the Company is to:

 

(a)           operate
and maintain a digital content network (“DCN”) that is able to distribute
advertising, marketing, promotional and other digital content for display on
theatre screens and video display monitors in theatres on a worldwide basis and
that, among other things, will compete with all areas and forms of media
(including cable and television broadcasters), advertising, marketing,
promotional and/or any distribution of digital content via any media format on
a worldwide basis;

 

(b)           provide
advertising, marketing and promotional activities on behalf of any Person
involved in the business of exhibiting theatrical motion pictures, including,
but not limited to, the Founding Members and their Affiliates (including the
Services as set forth in the Exhibitor Services Agreements) whether displayed
over the DCN, as non-digital content for display on non-digital theatre
screens, through lobby or other in-theatre promotions, or through sponsorships
of special events; and

 

(c)           engage
in all activities and transactions in furtherance of the foregoing purposes
(collectively, the “Joint Venture Purposes”).

 

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

 

18

 

ARTICLE 3

MEMBERS AND INTERESTS

 

3.1          Members.

 

(a)           AMC,
Regal and Cinemark were previously admitted as Members to the Company subject
to the Second Amended Agreement. Upon the execution of this Agreement, NCM Inc.
shall be admitted to the Company as a Member. Following the Common Unit
Purchase and Over-Allotment Unit Purchase, each Person named as a Member on Exhibit A
hereto on the date hereof shall be deemed to own the number of Common Units and
Preferred Units specified in Exhibit A.

 

(b)           Exhibit A
hereto contains the name, address and number of Common Units and Preferred
Units owned by each Member as of the date hereof following the Common Unit
Purchase and Over-Allotment Unit Purchase and immediately prior to the
Preferred Distribution. The Company shall revise Exhibit A
(i) from time to time to reflect the issuance, conversion or Transfer of
Units in accordance with the terms of this Agreement and other modifications to
or changes in the information set forth therein, and (ii) in accordance
with Sections 3.4(f), 3.5 and 9.1. Any amendment or revision to Exhibit A
or to the Company’s records as contemplated by this Agreement to reflect
information regarding Members or under Section 3.4(f), 3.5 or 9.1 shall be
deemed to amend this Agreement, but shall not require the approval of the
Manager or any Member.

 

(c)           One
or more additional Persons may be admitted as a Member of the Company only upon
(i) an issuance of Units pursuant to Section 3.4(f) or 3.5 or a Transfer
of Units pursuant to Article 8, and (ii) the execution and delivery by
such Person of a counterpart to this Agreement or other written agreement, in a
form satisfactory to the Manager, to be bound by all the terms and conditions
of this Agreement. Upon such execution, the Company shall amend Exhibit A
and shall amend this Agreement as the Manager may reasonably determine is
necessary, to reflect the admission of such Person as a Member and such other
information of such Person as indicated in Exhibit A. Unless
admitted to the Company as a Member as provided in this Section 3.1 or
Section 8.2, no Person is, or will be considered to be, a Member.

 

(d)           Subject
to the other provisions of this Section 3.1 and Section 8.2, each
Person that holds one or more Units in compliance with the terms of this Agreement
shall be a Member. A Member will cease to be a Member when such Person ceases
to own any Units in the Company, in which case Exhibit A shall be
amended to reflect that such Person is no longer a Member.

 

(e)           Except
as provided in the LLC Act, in no event shall any Member (or any former
Member), by reason of its status as a Member (or former Member), have any
liability for (i) the debts, duties or any other obligations of the Company,
(ii) the repayment of any Capital Contribution of any other Member or (iii) any
act or omission of any other Member.

 

(f)            If
a Founding Member and one or more of its transferees (which have the rights and
powers of a Founding Member under Section 8.2(c)) hold Common Units in the 

 

19

 

Company at the same time, such Founding
Member and transferees shall designate one of them to act on behalf of all of
them and vote all of their Common Units with respect to any matter requiring
approval of the Founding Members.

 

3.2          Meeting
of Members.

 

(a)           Annual
Meeting. Subject to Section 3.2(g), an annual meeting of Members shall be
held on such date and at such time as (i) shall be designated from time to
time by the Manager, but no less often than once during each calendar year, and
(ii) stated in the notice of the meeting, at which meeting the Members
entitled to vote shall transact such business as may properly be brought before
the meeting. At each annual meeting of the Members (i) the Manager shall
discuss the matters and affairs of the Company, and (ii) the Members shall
address such other matters as may be raised at the meeting by the Members or
Manager.

 

(b)           Special
Meetings. A special meeting of Members, for any purpose or purposes, may be
called by the Manager and shall be called by the Manager upon the receipt by
the Manager of the written request of any Member. Such request shall state the
purpose or purposes of the proposed meeting.

 

(c)           Place
and Conduct of Meetings. Meetings of the Members shall be held at such time
and place, either within or without the State of Delaware, as shall be
designated from time to time by the Manager and stated in the notice of the
meeting or in a duly executed waiver of notice thereof. All meetings shall be
conducted by such Person as the Manager may appoint pursuant to such rules for
the conduct of the meeting as the Manager or such other Person deems
appropriate. Such meetings may be held in person, by teleconference or by any
other reasonable means, in each case at the discretion of the Manager.

 

(d)           Notice
of Meetings. Written notice of an annual meeting or special meeting stating
the place, date, and hour of the meeting and in the case of 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 calendar days before the
date of the meeting to each Member entitled to vote at such meeting, unless
waived by each such Member.

 

(e)           Quorum.
The presence of both (a) the holders of a majority of all the Common Units then
issued and outstanding and entitled to vote thereat and (b) each Founding
Member, whether in person or represented by a valid written proxy, shall
constitute a quorum at all meetings of the Members for 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 by proxy, shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented.

 

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

 

20

 

(g)           Action
by Consent. Any consent required herein or action required to be taken at
any annual or special meeting of Members, or any action which may be taken at
any annual or special meeting of such Members, may be taken without a meeting,
without a vote, without prior written notice and with a consent or consents in
writing signed by Members who are holders of outstanding Common Units having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all Common Units entitled to vote
thereon were present and voted. Prompt notice of the taking of the action
without a meeting by less than unanimous written consent shall be given to
those Members who are holders of Common Units and who have not consented in
writing; provided that the failure to give any such notice shall not
affect the validity of the action taken by such written consent.

 

3.3          Certain
Duties and Obligations of the Members. The Company shall be a
partnership only for income tax purposes and this Agreement shall not be deemed
to create a partnership, joint venture, agency or other relationship among the
Members creating fiduciary or quasi-fiduciary duties or similar duties and
obligations or to subject the Members to joint and several or vicarious
liability or to impose any duty, obligation or liability that would arise
therefrom with respect to any or all of the Members or their Affiliates. Except
as otherwise provided in this Agreement, no Member shall have any authority to
act for, bind, commit or assume any obligation or responsibility on behalf of
the Company, its properties or any other Member. No Member, in its capacity as
a Member under this Agreement, shall be responsible or liable for any
Indebtedness or obligation of another Member. The Company shall not be
responsible or liable for any Indebtedness or obligation of any Member,
incurred either before or after the execution and delivery of this Agreement by
such Member, except as to those responsibilities, liabilities, Indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement,
the Contribution and Unit Holders Agreement, the Contribution Agreement and the
LLC Act.

 

3.4          Units.

 

(a)           Recapitalization.
Pursuant to the Third Amendment (i) each Class A Unit that was issued and
outstanding under the First Amended Agreement, as amended by the First
Amendment and the Second Amendment, was split into 44,291 Class A Units, and
(ii) following the split of Class A Units described in the preceding
clause (i), each issued and outstanding Class A Unit was recapitalized
into one (1) Common Unit and one (1) Preferred Unit.

 

(b)           Common
Unit Purchase. In connection with the execution of this Agreement
(i) NCM Inc. is making its required Capital Contribution to the Company as
set forth in the Subscription Agreement, and (ii) in exchange for NCM Inc.’s
Capital Contribution, the Company is issuing to NCM Inc. 38,000,000 Common
Units (collectively, the “Common Unit
Purchase”).

 

(c)           Over-Allotment
Unit Purchase. Pursuant to the terms of the Unit Purchase Agreement, the
Founding Members have agreed to sell to NCM Inc. a number of Common Units equal
to the number of shares of NCM Inc. common stock sold to the Underwriters
pursuant to the Underwriters’ option to purchase an additional 4,000,0000
shares of NCM Inc. common stock under the Underwriting Agreement (the “Over-Allotment Option”). In connection with
the Underwriters exercise of the Over-Allotment Option for 4,000,000 shares of
NCM Inc. 

 

21

 

common stock on the date of this Agreement
and immediately following the Common Unit Purchase, each Founding Member hereby
sells, conveys, transfers and assigns to NCM Inc. the number of Common Units,
in exchange for the cash consideration, set forth opposite such Founding Member’s
name on Exhibit B hereto (the “Over-Allotment
Unit Purchase”). The Members hereby acknowledge and agree that
NCM Inc. shall have all of the rights of a Member (but not a Founding Member)
with respect to the Common Units purchased pursuant to the Over-Allotment Unit
Purchase.

 

(d)           Common
Units. The Common Units shall consist of equal whole, fractional units into
which Interests in the Company shall be divided. The Common Units shall be
entitled to share in distributions and allocations as provided in Sections 5.4,
6.4 and 7.3, and as otherwise provided in this Agreement. The total number of
authorized Common Units that the Company is entitled to issue is 120,000,000.

 

(e)           Preferred
Units; Preferred Distribution. In connection with the execution of this
Agreement and immediately following the Common Unit Purchase, the
Over-Allotment Unit Purchase and the Company’s payment of the Initial ESA
Modification Payment, the Company shall incur $725,000,000 of term Indebtedness
pursuant to the Senior Credit Facility (the “Preferred Unit Indebtedness”) for the purpose of redeeming
the Preferred Units. The total amount to be paid in redemption and complete
satisfaction of all of the issued and outstanding Preferred Units shall be $769,525,602
(the “Preferred Distribution”),
determined as follows (i) the amount of the Preferred Unit Indebtedness, less
(ii) $15,250,000 (the expenses associated with the Preferred Unit Indebtedness),
plus (iii) $59,775,602 (the amount by which the Capital Contribution
made by NCM Inc. to the Company pursuant to the Subscription Agreement exceeds
the Initial ESA Modification Payment). The 55,850,951 issued and outstanding
Preferred Units shall share equally in the Preferred Distribution and each
Preferred Unit shall be entitled to receive $13.7782 (the “Preferred Unit Amount”) in redemption
and complete satisfaction of all amounts to which each Preferred Unit is
entitled under this Section 3.4(e). In the redemption of the Preferred Units,
each Founding Member shall receive a whole dollar amount equal to the product
of (x) the Preferred Unit Amount, times (y) the number of Preferred
Units held by such Founding Member. The amount to be paid to each Founding
Member in redemption and complete satisfaction of all of such Founding Member’s
Preferred Units is set forth on Exhibit A. All of the issued and
outstanding Preferred Units shall automatically terminate and cease to be
outstanding on payment of the Preferred Unit Amount to which each Preferred
Unit is entitled under this Section 3.4(e).

 

(f)            Adjustment of Common Units. The Common Units of the Founding
Members and their Affiliates shall be adjusted from time to time as provided in
the Common Unit Adjustment Agreement, which is incorporated herein by
reference.

 

(g)           Unit
Splits, Ratios and Other Unit Adjustments. The Company shall undertake all
actions, including, without limitation, a reclassification, distribution,
division or recapitalization, with respect to the Common Units, to maintain at
all times a one-to-one ratio between the number of Common Units owned by NCM
Inc. and the number of outstanding shares of NCM Inc. common stock,
disregarding, for purposes of maintaining the one-to-one ratio, Unvested NCM
Inc. Shares, treasury stock, preferred stock or other securities of NCM Inc.
that are not convertible into or exercisable or exchangeable for common stock
of NCM Inc. In 

 

22

 

the event NCM Inc. issues, transfers from
treasury stock or repurchases NCM Inc. common stock in a transaction not
contemplated in this Agreement, the Manager shall have the authority to take
all actions such that, after giving effect to all such issuances, transfers or
repurchases, the number of outstanding Common Units owned by NCM Inc. will
equal on a one-for-one basis the number of outstanding shares of NCM Inc.
common stock. In the event NCM Inc. issues, transfers from treasury stock or
repurchases NCM Inc. preferred stock in a transaction not contemplated in this
Agreement, the Manager shall have the authority to take all actions such that,
after giving effect to all such issuances, transfers or repurchases, NCM Inc.
holds mirror equity interests in the Company which (in the good faith
determination by the Manager) are in the aggregate substantially equivalent to
the outstanding NCM Inc. preferred stock. The Company shall not undertake any
subdivision (by any Unit split, Unit distribution, reclassification,
recapitalization or similar event) or combination (by reverse Unit split,
reclassification, recapitalization or similar event) of the Units that is not
accompanied by an identical subdivision or combination of the NCM Inc. common
stock to maintain at all times a one-to-one ratio between the number of Common
Units owned by NCM Inc. and the number of outstanding shares of NCM Inc. common
stock, unless such action is necessary to maintain at all times a one-to-one
ratio between the number of Common Units owned by NCM Inc. and the number of
outstanding shares of NCM Inc. common stock as contemplated by the first
sentence of this Section 3.4(g).

 

(h)           Certificates;
Transfer. Common Units shall be evidenced by a certificate issued by the
Company to the holder thereof and substantially in the form of Exhibit C
attached hereto. Such certificates shall be entered in the books of the Company
as they are issued, and shall be signed by a duly designated officer of the
Company and may be sealed with the Company’s seal or a facsimile thereof. Upon
any Transfer permitted under this Agreement (i) the Transferring Member
shall surrender to the Company a certificate or certificates representing at
least the number of Common Units being Transferred, and (ii) the Company shall
issue (x) to the transferee a certificate for the number of Common Units
Transferred, and (y) to the Transferring Member a certificate representing the
remaining number of Common Units equal to the difference (if any) between the
number of Common Units evidenced by the certificate or certificates surrendered
pursuant to clause (i) and the number of Common Units Transferred. No Transfer
of Common Units shall be valid as against the Company except upon surrender to
and cancellation of the appropriate certificate or certificates, accompanied by
an assignment or Transfer by the Member, subject to any restrictions on
Transfer contained in this Agreement. The Company may issue a new certificate
for Common Units in place of any certificate or certificates previously issued
by it, alleged to have been lost or destroyed, upon the making of an affidavit
of that fact, and providing an indemnity in form and substance reasonably
satisfactory to the Manager, by the Person claiming the certificate or
certificates to be lost or destroyed.

 

3.5          Authorization
and Issuance of Additional Units.

 

(a)           In
General. The Company shall only be permitted to issue additional Units or
other Equity Interests in the Company to the Persons and on the terms and
conditions provided for in Section 3.4 and this Section 3.5. The Manager may
cause the Company to issue additional Common Units authorized under this
Agreement at such times and upon such terms as the Manager shall determine. The
Manager shall amend this Agreement as necessary in 

 

23

 

connection with the issuance of additional
Common Units and admission of additional Members under this Section 3.5.

 

(b)           Exercise
of Redemption Right. In connection with the exercise of a Redeeming Member’s
Redemption Rights under Section 9.1(a), NCM Inc. shall contribute to the
Company the consideration the Redeeming Member is entitled to receive under
Section 9.1(b). NCM Inc., at its option, shall determine whether to contribute,
pursuant to Section 9.1(b), the Share Settlement or the Cash
Settlement.
Unless the Redeeming Member has timely delivered a Retraction Notice as
provided in Section 9.1(b), on the Redemption Date (to be effective immediately
prior to the close of business on the Redemption Date) (i) NCM Inc. shall make
its capital contribution to the Company (in the form of the Share Settlement or
the Cash Settlement) required under this Section 3.5(b), and (ii) the
Company shall issue to NCM Inc. a number of Common Units equal to the number of
Redeemed Units surrendered by the Redeeming Member. The
timely delivery of a Retraction Notice shall terminate all of the Company’s and
NCM Inc.’s rights and obligations under this Section 3.5(b) arising from the
Redemption Notice.

 

(c)           Equity
Compensation Issued by NCM Inc.

 

(i)            In connection with the exercise of
Options, NCM Inc. shall have the right to acquire additional Common Units from
the Company. NCM Inc. shall exercise its rights under this Section 3.5(c)(i) by
giving written notice (the “Equity
Compensation Notice”) to the Company and all Members following
exercise of the Options. The Equity Compensation Notice shall specify the net
number of shares of NCM Inc. common stock issued by NCM Inc. pursuant to
exercise of the Options. The Company shall issue the Common Units to which NCM
Inc. is entitled under Section 3.5(c)(i) within three (3) Business Days after
delivery of the Equity Compensation Notice (to be effective immediately prior
to the close of business on such date). The number of additional Common Units
that NCM Inc. shall be entitled to receive under this Section 3.5(c)(i) shall
be equal to the net number of shares of NCM Inc. common stock issued by NCM
Inc. pursuant to the exercise of the Options. The net number of shares of NCM
Inc. common stock issued by NCM Inc. pursuant to exercise of the Options shall
be equal to (i) the number of shares of NCM Inc. common stock with respect to
which the Options were exercised, less (ii) any shares of NCM Inc.
common stock transferred to or withheld by NCM Inc. (e.g., in connection with a
stock swap or otherwise) in satisfaction of the exercise price or taxes payable
as a result of the exercise of the Options. In consideration of the Common
Units issued by the Company to NCM Inc. under this Section 3.5(c)(i), NCM Inc.
shall contribute to the Company the cash consideration, if any, received by NCM
Inc. in exchange for the net shares of NCM Inc. common stock issued pursuant to
exercise of the Options. NCM Inc. shall contribute any cash consideration to
which the Company is entitled under this Section 3.5(c)(i) on the same date
(and to be effective as of the same time) that the Company issues the Common
Units to NCM Inc.

 

(ii)           In connection with the grant of NCM
Inc. common stock pursuant to the Equity Incentive Plan (including, without
limitation, the issuance of restricted and non-restricted NCM Inc. common
stock, the payment of bonuses in NCM Inc. common stock, the issuance of NCM
Inc. common stock in settlement of stock appreciation rights or otherwise),
other than through the exercise of Options as contemplated in Section
3.5(c)(i), NCM Inc. shall deliver an Equity Compensation Notice to the Company
and all Members following the date on 

 

24

 

which shares of such NCM Inc. common stock are vested under applicable
law (“Vested NCM Inc. Shares”).
The Equity Compensation Notice shall specify the number of Vested NCM Inc.
Shares. Within three (3) Business Days after delivery of the Equity
Compensation Notice (to be effective immediately prior to the close of business
on such date) (i) the Company shall (x) issue to NCM Inc. a number of Common
Units equal to the number of Vested NCM Inc. Shares, and (y) make a special distribution
to NCM Inc. from Available Cash (to the extent such distribution is not
restricted under Section 7.6(h) of the Senior Credit Facility) in respect of
such Common Units in an amount equal to any dividends paid or payable by NCM
Inc. in respect of such Vested NCM Inc. Shares, and (ii) NCM Inc. shall
contribute to the Company any cash consideration received by NCM Inc. in
respect of such Vested NCM Inc. Shares.

 

3.6          Business
Opportunities; Non-Competition. Except as provided in this
Agreement and as may be otherwise provided in any written agreement with the
Company to which a Member or its Affiliates is a party (including Section 12.07
of the Exhibitor Services Agreements), each Member and their Affiliates may
have other business interests or may engage in other business ventures of any
nature or description whatsoever regardless of whether they compete with the
business and purpose of the Company set forth in Section 2.6.

 

ARTICLE 4

MANAGEMENT AND OPERATIONS

 

4.1          Manager.
The Company shall be managed by one manager (the “Manager”)
that shall be NCM Inc. NCM Inc. may not be removed as a Manager except as
provided in Section 4.7. Any Manager that is properly removed pursuant to
Section 4.7 shall be replaced in the manner provided in Section 4.8. Except to
the extent deemed appropriate by NCM Inc. in connection with its status under
the Investment Company Act of 1940, so long as NCM Inc. is the Manager, NCM
Inc. shall not, without Founding Member Approval, directly or indirectly enter
into or conduct any business other than (i) in connection with the ownership,
acquisition or disposition of Units as a Member, (ii) the management of
the business of the Company as provided herein, (iii) NCM Inc.’s operation as a
public reporting company with a class of securities registered under the
Exchange Act, and (iv) such other activities that are incidental to the
foregoing. The Founding Members hereby terminate the Board established to
conduct the business of the Company pursuant to the First Amended Agreement.

 

4.2          Management
Authority. Except as provided in Section 4.3, the Manager shall
have authority on behalf of the Company to make all decisions with respect to
the Company’s business without the approval of the Members. In connection with
the implementation, consummation or administration of any matter within the
scope of the Manager’s authority, the Manager is authorized, without the
approval of the Members, to execute and deliver on behalf of the Company
contracts, instruments, conveyances, checks, drafts and other documents of any
kind or character to the extent the Manager deems it necessary or desirable. The
Manager may delegate to officers, employees, agents or representatives of the
Company or the Manager any or all of the foregoing powers by written authorization
identifying specifically or generally the powers delegated or acts authorized.

 

25

 

4.3          Founding
Member Approval Rights.

 

(a)           The
Manager shall not take, or cause the Company to take, action with respect to
the matters provided for in Section 4.3(b) without Founding Member Approval (“Founding Member Approval Rights”) if (i)
an individual designated by a Founding Member pursuant to the Director
Designation Agreement is not nominated or appointed to the board of
directors of NCM Inc. under circumstances constituting a breach of the Director
Designation Agreement, or (ii) such designee (or if the designee is not elected
in circumstances under which the Founding Member can designate a successor,
such successor designee) is not elected to the board of directors of NCM Inc.
after being designated in accordance with the Director Designation Agreement. Upon
the occurrence of a condition giving rise to Founding Member Approval Rights,
the Founding Member Approval Rights shall continue until the earlier of (x) the
date on which the conditions that gave rise to Founding Member Approval Rights
no longer exist, or (y) the delivery of written notice waiving the Founding
Member Approval Rights by the Founding Member(s) whose designees or successor
designees were not nominated, appointed or elected to the board of directors of
NCM Inc. A Founding Member that designated an individual who is either not
nominated, appointed or elected to the board of directors of NCM Inc. under
circumstances giving rise to the Founding Member Approval Rights under this
Section 4.3 may waive the Founding Member Approval Rights by delivering written
notice to the Company and the other Founding Members. Any waiver by a Founding
Member of its Founding Member Approval Rights shall only serve as a waiver with
respect to the specific conditions that gave rise to the Founding Member
Approval Rights being waived and shall not constitute a waiver with respect to
any other rights under this Agreement and any Founding Member Approval Rights
that the Founding Member may have in the future as a result of the existence of
a condition giving rise to Founding Member Approval Rights subsequent to such
waiver.

 

(b)           The
matters provided for in this Section 4.3(b) are not intended to modify the
Manager’s responsibilities for managing the day-to-day business and affairs of
the Company. Subject to the foregoing and notwithstanding anything to the
contrary in this Agreement, the Company shall not take, cause to be taken, or
agree to take or authorize any of the following actions without Founding Member
Approval during the periods of time provided for in Section 4.3(a):

 

(i)            the approval of any Budget or any
amendment or modification of the Budget;

 

(ii)           the incurrence of any Indebtedness or
entering into or consummating any other financing transaction, in either case
for an amount that is not provided for in the Budget;

 

(iii)          the entering into or consummation of
any agreements or arrangements involving annual payments by the Company
(including the fair market value of any barter) in excess of $5 million (as
adjusted by the CPI Adjustment), except as otherwise provided for in the
Budget, or any material modification of any such agreements or arrangements;

 

26

 

(iv)          the entering into or consummation of
any agreements or arrangements involving annual receipts (including the fair
market value of any barter) in excess of $20 million (as adjusted by the CPI
Adjustment), or any material modification of any such agreements or
arrangements;

 

(v)           except as contemplated herein, the
declaration, setting aside or payment of any redemption of, dividends on, or
the making of any other distributions in respect of, any of its Units or other
Equity Interests in the Company, as the case may be, payable in cash, stock,
property or otherwise, or any reorganization or recapitalization or split,
combination or reclassification or similar transaction of any of its Units,
limited liability company interests or capital stock, as the case may be;

 

(vi)          the amendment of any provision of this
Agreement to authorize, and the issuance of, any additional Units or classes of
Units or other Equity Interests and the designations, preferences and relative,
participating or other rights, powers duties thereof;

 

(vii)         the hiring or termination of employment
of the chief executive officer, chief financial officer, chief technology
officer or chief sales and marking officer of the Company, or the entering
into, amendment or termination of any employment, severance, change of control
or other contract with any employee that has a written employment agreement
with the Company;

 

(viii)        any change in the Joint Venture
Purposes, or the provision by the Company of any services beyond the scope of
the Services or Services outside of the United States or Canada;

 

(ix)           the entering into of any agreement
with respect to or the taking of any material steps to facilitate a transaction
that constitutes a Change of Control of the Company or a proposal for such a
transaction;

 

(x)            the leasing (as lessor), licensing
(as licensor) or other Transfer of assets (including securities)
(x) having a fair market value or for consideration exceeding $10 million
(as adjusted by the CPI Adjustment), taken as a whole, or (y) to which the
revenues or the profits attributable exceed $10 million (as adjusted by the CPI
Adjustment), taken as a whole, in any one transaction or series of related
transactions, in each case, determined using the most recent quarterly
consolidated financial statement of the Company;

 

(xi)           the entering into of any agreement
with respect to or consummation of any acquisition of any business or assets
that has or have a fair market value in excess of $10 million (as adjusted by
the CPI Adjustment) taken as a whole, in any one transaction or series of
related transactions, whether by purchase and sale, merger, consolidation,
restructuring, recapitalization or otherwise;

 

(xii)          the settlement of claims or suits in
which the Company is a party for an amount that exceeds the relevant
provision(s) in the Budget by more than $1 million (as adjusted by the CPI
Adjustment) or where equitable or injunctive relief is included as part of such
settlement;

 

27

 

(xiii)         the entering into, modification or
termination of any material contract or transaction or series of related
transactions (including by way of barter) between (x) the Company or any
of its Subsidiaries and (y)(1) any Member or any Affiliate of any Member,
or (2) any Person in which any Founding Member has taken, or is
negotiating to take, a material financial interest, in each case, other than
relating to the purchase or sale of products or services in the ordinary course
of business of the Company;

 

(xiv)        the entering into of any agreement for
the Company to provide to any new Member or Affiliate of any new Member any
services similar to those set forth in the Exhibitor Services Agreements, or
the admission to the Company of any new Member;

 

(xv)         the entering into, or the modification
or termination of, any agreement for the Company to provide any services to any
Person (other than a Member or Affiliate of a Member), that requires capital
expenditures or guaranteed payments in excess of $1 million (as adjusted by
the CPI Adjustment) annually;

 

(xvi)        the dissolution of the Company; the
adoption of a plan of liquidation of the Company; any action by the Company to
commence any suit, case, proceeding or other action (x) under any existing
or future law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors seeking to have an order for relief entered
with respect to the Company, or seeking to adjudicate the Company as bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to the
Company, or (y) seeking appointment of a receiver, trustee, custodian or
other similar official for the Company, or for all or any material portion of
the assets of the Company, or making a general assignment for the benefit of
the creditors of the Company;

 

(xvii)       approval of any tax matter pursuant to
Section 6.2;

 

(xviii)      valuation determinations pursuant to
Section 5.5;

 

(xix)         any amendment or change to any provision
in this Section 4.3 or Article 8; and

 

(xx)          any expenditure by the Company to
replace, upgrade or modify any equipment or software owned by any of the
Founding Members or their Affiliates.

 

(c)           A
Founding Member shall permanently cease to be entitled to participate in giving
Founding Member Approval if at any time the Founding Member owns less than five
percent of the then issued and outstanding Common Units, including Common Units
acquired from another Founding Member or an Affiliate of another Founding
Member (which, for purposes of this Section 4.3(c), shall be calculated to
include (i) all shares of NCM Inc. common stock beneficially owned by such
Founding Member as of the date of determination as a result of the exercise of
the Founding Member’s Redemption Right, (ii) any shares of NCM Inc. common stock issued in connection with any
dividend or distribution on NCM Inc. common stock so received as a result of
the exercise of the Founding Member’s Redemption Right, and (iii) any shares of
NCM Inc. common stock acquired from another Founding Member provided that such
other Founding Member acquired such shares of NCM Inc. common stock in a transaction 

 

28

 

described in clause (i) or (ii) above, but
excluding (x) any shares of NCM Inc. common stock otherwise acquired by the
Founding Members, and (y) any Common Units issued to NCM Inc. by the
Company pursuant to Section 3.5(b) in connection with the exercise of a
Founding Member’s Redemption Right (unless the Founding Member has disposed of
any of the shares of NCM Inc. common stock received in connection with the
exercise of the Founding Member’s Redemption Right (other than to another
Founding Member in a transaction described in clause (iii) above), in which
case a number of Common Units issued to NCM Inc. by the Company pursuant to
Section 3.5(b) in connection with such exercise of the Founding Member’s
Redemption Right equal to the number of shares of NCM Inc. common stock disposed of by such Founding Member
shall be included in determining such Founding Member’s ownership interest)).

 

(d)           Except
for the matters provided for in Section 4.3(b), the Founding Member Approval
rights shall not affect the Manager’s right to conduct the Company’s business
under this Agreement.

 

4.4          Duties.
The Manager shall carry out its duties in good faith, in a manner that it
believes to be in the best interests of the Company. The Manager shall devote
such time to the business and affairs of the Company as it may determine, in
its reasonable discretion, is necessary for the efficient carrying on of the
Company’s business.

 

4.5          Reliance
by Third Parties. No third party dealing with the Company shall
be required to ascertain whether the Manager is acting in accordance with the provisions
of this Agreement. All third parties may rely on a document executed by the
Manager as binding the Company. The foregoing provisions shall not apply to
third parties who are Affiliates of a Member or a Manager. If the Manager acts
without authority it shall be liable to the Members for any damages arising out
of its unauthorized actions.

 

4.6          Resignation.
The Manager may resign at any time by giving written notice to the Members. Unless
otherwise specified in the notice, the resignation shall take effect upon
receipt thereof by the Members, and the acceptance of the resignation shall not
be necessary to make it effective.

 

4.7          Removal.
The Manager may only be removed by NCM Inc.

 

4.8          Vacancies.
Vacancies in the position of Manager occurring for any reason shall be filled
by NCM Inc.

 

4.9          Information
Relating to the Company. Upon request, the Manager shall supply
to a Member (i) any information required to be available to the Members under
the LLC Act, and (ii) any other information requested by such Member
regarding the Company or its activities, provided that obtaining the
information described in this clause (ii) is not unduly burdensome to the
Manager. During ordinary business hours, each Member and its authorized
representative shall have access to all books, records and materials in the
Company’s offices regarding the Company or its activities.

 

4.10        Insurance. The Company shall
maintain or cause to be maintained in force at all times, for the protection of
the Company and the Members to the extent of their insurable 

 

29

 

interests, such insurance as
the Manager believes is warranted for the operations being conducted.

 

4.11        Transactions
Between Company and Manager. The Manager may cause the Company
to contract and deal with the Manager, or any Affiliate of the Manager,
provided such contracts and dealings are on terms comparable to and competitive
with those available to the Company from others dealing at arm’s length or are
approved by a Majority Member Vote. The Members hereby approve the Common Unit
Adjustment Agreement, the Exhibitor Services Agreements, the Loews Agreement,
the Management Services Agreement, the Software License Agreement, the Senior
Credit Facility, the Subscription Agreement and the Tax Receivable Agreement.

 

4.12        Officers.

 

(a)           The
Manager may, from time to time, designate one or more Persons to fill one or
more officer positions of the Company. Any officers so designated shall have
such titles and authority and perform such duties as the Manager may, from time
to time, delegate to them. If the title given to a particular officer is one
commonly used for officers of a business corporation, the assignment of such
title shall constitute the delegation to such officer of the authority and
duties that are normally associated with that office, subject to any specific
delegation of authority and duties made to such officer, or restrictions placed
thereon, by the Manager. Each officer shall hold office until his or her
successor is duly designated, until his or her death or until he or she resigns
or is removed in the manner hereinafter provided. Any number of offices may be
held by the same Person. The salaries or other compensation, if any, of the
officers of the Company shall be fixed from time to time by the Manager.

 

(b)           Any
officer of the Company may resign at any time by giving written notice thereof
to the Manager. Any officer may be removed, either with or without cause, by
the Manager whenever in its judgment the best interests of the Company will be
served thereby; provided, however, that such removal shall be
without prejudice to the contract rights, if any, of the Person so removed. Designation
of an officer shall not, by itself, create contract rights.

 

4.13        Management
Fee; Reimbursement of Expenses. Except as provided in the
Management Services Agreement, the Manager shall not be entitled to
compensation for performance of its duties hereunder unless such compensation
has been approved by a Majority Member Vote. The Manager shall be reimbursed by
the Company for any reasonable out-of-pocket expenses incurred on behalf of the
Company.

 

4.14        Limitation
of Liability; Exculpation .

 

(a)           No
Manager, Member or officer of the Company, nor any of their respective
Subsidiaries or Affiliates (including any stockholder of REG, Marquee Holdings,
Cinemark or NCM Inc. that would be deemed an Affiliate but for the exception
set forth in subsections (iii), (iv), (v) or (vi) of the definition of
Affiliate herein, or any of such stockholder’s Affiliates) nor any of their
respective direct or indirect officers, directors, trustees, members, partners,
equity holders, employees or agents, nor any of their heirs, executors,
successors and assigns (individually, an “Indemnitee”), shall be liable to the
Company or any Member for any 

 

30

 

act or omission by such Indemnitee in
connection with the conduct of affairs of the Company or otherwise incurred in
connection with the Company or this Agreement or the matters contemplated
herein, in each case unless such act or omission was the result of gross
negligence or willful misconduct or constitutes a breach of, or a failure to
comply with, any agreement between (x) such Indemnitee and (y) the
Company or its Subsidiaries and Affiliates.

 

(b)           Notwithstanding
any other provision of this Agreement or otherwise applicable provision of law
or equity, whenever in this Agreement a Manager, Member or officer of the
Company is permitted or required to make a decision (i) in its “sole discretion”
or “discretion,” with “complete discretion” or under a grant of similar
authority or latitude, such Manager, Member or officer shall be entitled to
consider only such interests and factors as it desires, including its own
interests, and shall, to the fullest extent permitted by applicable law, have
no duty or obligation to give any consideration to any interest of or factors
affecting the Company or the Members, or (ii) in its “good faith” or under
another expressed standard, such Manager, Member or officer shall act under
such express standard and shall not be subject to any other or different
standards.

 

(c)           Any
Manager, Member, Liquidator or officer of the Company may consult with legal
counsel and accountants selected by it at its expense or with legal counsel and
accountants for the Company at the Company’s expense. Each Manager, Member,
Liquidator and officer of the Company shall be fully protected in relying in
good faith upon the records of the Company and upon information, opinions,
reports, or statements presented by another Manager, Member, Liquidator or
officer, or employee of the Company, or committees of the Company, Manager or
Members, or by any other Person (including, without limitation, legal counsel
and public accountants) as to matters that the Manager, Member, Liquidator or
officer reasonably believes are within such other Person’s professional or
expert competence, including information, opinions, reports or statements as to
the value and amount of the assets, liabilities, Net Income or Net Losses of
the Company, or the value and amount of assets or reserves or contracts,
agreements or other undertakings that would be sufficient to pay claims and
obligations of the Company or to make reasonable provision to pay such claims
and obligations, or any other facts pertinent to the existence and amount of
assets from which distributions to Members or creditors might properly be paid.

 

4.15        Indemnification.

 

(a)           Indemnification
Rights. The Company shall indemnify and hold harmless each Indemnitee from
and against any and all losses, claims, demands, costs, damages, liabilities,
expenses of any nature (including attorneys’ fees and disbursements),
judgments, fines, settlements (whether on an individual or joint and several basis)
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative, arbitral or
investigative, in which the Indemnitee was involved or may be involved, or
threatened to be involved, as a party or otherwise, arising out of or in
connection with the business of the Company, this Agreement, any Person’s
status as a Manager, Member or officer of the Company or any action taken by
any Manager, Member or officer of the Company or under this Agreement or
otherwise on behalf of the Company (collectively, “Liabilities”), regardless of whether the
Indemnitee continues to be a Manager, Member or officer of the Company, or an
Affiliate, officer, director, employee, trustee, member or partner or agent of
a 

 

31

 

Manager, Member or officer of the Company, to
the fullest extent permitted by the LLC Act and all other applicable laws; provided
that an Indemnitee shall be entitled to indemnification hereunder only to the
extent that such Indemnitee’s conduct did not result from gross negligence or
willful misconduct. The termination of any proceeding by settlement, judgment,
order, conviction, or upon a plea of nolo contendere or its equivalent shall
not, of itself, create a presumption that such Indemnitee’s conduct resulted
from gross negligence or willful misconduct.

 

(b)           Expenses.
Expenses incurred by an Indemnitee in defending against any Liability or
potential Liability subject to this Section 4.15 shall, from time to time,
be advanced by the Company prior to the final disposition of such Liability
upon receipt by the Company of an undertaking reasonably acceptable in form and
substance to the Manager by or on behalf of the Indemnitee to repay such amount
if it shall be determined that such Person is not entitled to be indemnified as
authorized in this Section 4.15.

 

(c)           Indemnification
Rights Non-Exclusive; Rights of Indemnified Parties. The indemnification
provided by this Section 4.15 shall be in addition to any other rights to
which those indemnified may be entitled under any agreement, by a Majority
Member Vote, as a matter of law or equity, or otherwise. Such indemnification
shall continue with respect to an Indemnitee even though it has ceased to serve
in any particular capacity and shall inure to the benefit of its heirs,
executors, successors, assigns and other legal representatives.

 

(d)           Assets
of the Company. Any indemnification under this Section 4.15 shall be
satisfied solely out of the assets of the Company, and no Member shall be
subject to personal liability or required to fund or cause to be funded any
obligation by reason of these indemnification provisions.

 

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

 

4.16        Title
to Assets. Unless specifically licensed or leased to the
Company, title to the assets of the Company, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the Company
as an entity, and no Members, individually or collectively, shall have any
ownership interest in such assets (other than licensed or leased assets) or any
portion thereof.

 

ARTICLE 5

CAPITAL CONTRIBUTIONS; DISTRIBUTIONS

 

5.1          Capital
Contributions.

 

(a)           The
AMC Founding Member, as the successor to NCN, and the Regal Founding Member
have made their required Capital Contributions to the Company as set forth in 

 

32

 

the Contribution and Unit Holders Agreement,
Cinemark Media has made its required Capital Contribution to the Company as set
forth in the Contribution Agreement and NCM Inc. has made its required Capital
Contribution to the Company as set forth in the Subscription Agreement. Except
as provided in Sections 3.5(b), 3.5(c), 5.1(b) and otherwise in this Agreement,
no Member shall be required to make any other capital contribution to, or
provide credit support for, the Company.

 

(b)           In
addition to the Capital Contributions that NCM Inc. has made as provided in
Section 5.1(a), NCM Inc. shall make the following additional Capital
Contributions to the Company:

 

(i)            On or before the due date of the
Company’s obligation to make a payment under Section 3.02(a) of the Tax
Receivable Agreement, NCM Inc. shall contribute to the Company an amount equal
to any ESA-Related Tax Benefit Payment; and

 

(ii)           On or before the due date of the
Company’s obligation to make a payment under Section 3.02(b) of the Tax
Receivable Agreement, NCM Inc. shall contribute to the Company an amount equal
to any increase in any ESA-Related Tax Benefit Payment.

 

(c)           Except
as provided in Article 9 of this Agreement, no Member shall be entitled to
withdraw, or demand the return of, any part its Capital Contributions or
Capital Account. No Member shall be entitled to interest on or with respect to
any Capital Contribution or Capital Account.

 

(d)           Except
as otherwise provided in this Agreement, 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 be
considered contributions to the capital of the Company hereunder. If any Member
shall advance funds to the Company in excess of the amounts required to be
contributed to the capital of the Company, the making of such advances shall
not result in any increase in the amount of the Capital Account of such Member
and shall be payable or collectible in accordance with the terms and conditions
upon which advances are made; provided that the terms of any such loan
shall not be less favorable to the Company, taken as a whole, than would be
available to the Company from unrelated lenders and such loan shall be approved
by the Manager (or a Majority Member Vote in the event the Manager is making
the loan to the Company).

 

5.3          Loans
from Third Parties. The Company may incur Indebtedness, or enter
into other similar credit, guarantee, financing or refinancing arrangements for
any purpose with any Person upon such terms as the Manager determines
appropriate; provided that the Company shall not incur any Indebtedness
that is recourse to any Member, except to the extent otherwise agreed to in
writing by the applicable Member in its sole discretion.

 

5.4          Distributions.
Except as provided in Section 3.5(c)(ii), all distributions made by the
Company, if any, shall be made in accordance with this Section 5.4.

 

(a)           Nonliquidating
Distributions. The Manager will cause the Company to make distributions of
the Distribution Amount in the following manner:

 

33

 

(i)            Within 60 calendar days following
the last day of each Fiscal Period (or the next Business Day if the 60th
calendar day is not a Business Day), the Company shall make a distribution in
an amount equal to the Distribution Amount for such Fiscal Period.

 

(ii)           Except as provided in Section 5.4(b),
all distributions shall be made among the Members pro rata in accordance with
their Percentage Interests; provided that if (i) the Company is in
default under any Funded Indebtedness, (ii) the distribution would cause the
Company to default under any Funded Indebtedness, or (iii) restrictions
imposed on the Company’s funds pursuant to any Funded Indebtedness, cause (x)
the product of the Distribution Amount times NCM Inc.’s Percentage
interest, to be less than the sum of (y) the product of the Tax Distribution
Amount times NCM Inc.’s Percentage Interest, plus the Tax
Receivable Distribution Amount, then the Company shall distribute the Tax
Distribution Amount among the Members pro rata in accordance with their
Percentage Interests and distribute the Tax Receivable Distribution Amount to
NCM Inc.

 

(iii)          The Company shall determine Available
Cash (i) for each Fiscal Period, and (ii) for each Fiscal Year (the “Distribution Year”) in connection with
the preparation of the audited report delivered to the Members for the
Distribution Year, as provided in Section 6.9(c). To the extent Available Cash
for the Distribution Year is greater than the total Distribution Amount
distributed to the Members under Section 5.4(a)(i) with respect to the four
Fiscal Periods in such Distribution Year (the “Distribution Increase”), the Distribution Increase will be
added to Available Cash for the second Fiscal Period in the Fiscal Year
following the Distribution Year. To the extent Available Cash for the
Distribution Year is less than the total Distribution Amount distributed to the
Members under Section 5.4(a)(i) with respect to the four Fiscal Periods in such
Distribution Year (the “Distribution
Decrease”), the Distribution Decrease will be subtracted from
Available Cash for the second Fiscal Period in the Fiscal Year following the
Distribution Year. Any Distribution Increase or Distribution Decrease provided
for in this Section 5.4(a)(iii) shall be taken into account in the
distributions made to the Members under Section 5.4(a)(i) following the last
day of the second Fiscal Period in the Fiscal Year following the Distribution
Year.

 

(iv)          Within three (3) Business days of
receiving or being deemed to receive any ESA-Related Payment from an ESA Party
pursuant to Sections 3.02 or 5.03 of the Tax Receivable Agreement, the Company
shall distribute such ESA-Related Payment to NCM Inc.

 

(b)           Liquidating
Distributions. All distributions made in connection with the sale, exchange
or other disposition of all or substantially all of the Company’s assets, or
with respect to the winding up and liquidation of the Company, shall be made
among the Members pro rata in accordance with their Percentage Interests.

 

(c)           Sole
Discretion of the Manager. Except as specified in Sections 3.4(e),
3.5(c)(ii), 4.3, 5.4(a), 5.4(b), 7.3 or 9.1(a), (i) the Company shall have
no obligation to distribute any cash or other property of the Company to the
Members, (ii) the Manager shall have sole discretion in determining
whether to distribute any cash or other property of the Company, when available,
and in determining the timing, kind and amount of any and all distributions,
and (iii) no Member is entitled to receive any distribution unless and
until declared by the Manager.

 

34

 

(d)           Distributions
in Kind. No Member has any right to demand or receive property other than
cash. However, the Manager may, in its sole discretion, elect to make
distributions, entirely or in part, in property of the Company other than cash.
Property distributed in kind shall be deemed to have been sold for their
valuation determined in accordance with Section 5.5.

 

(e)           Limitations
on Distributions. Notwithstanding anything in this Agreement to the
contrary, no distribution shall be made in violation of the LLC Act.

 

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

 

5.5          Valuation.
All valuation determinations to be made under this Agreement shall be made
pursuant to the terms of this Section, which determinations shall be conclusive
and binding on the Company, all Members, former Members, their successors,
assigns, legal representatives and any other Person, except for computational
errors or fraud, and to the fullest extent permitted by law, no such Person
shall have the right to an accounting or an appraisal of the assets of the
Company or any successor thereto except for computational errors or fraud. Valuations
shall be determined by a reasonable method of valuation determined by the
Manager, which may include an independent appraisal, a reasonable estimate by
the Manager or some other reasonable method of valuation. Distributions of
property in kind shall be valued at fair market value; provided that any
valuation under this Section shall be determined by an independent appraiser
selected by the Manager if so requested by any Founding Member.

 

ARTICLE 6

BOOKS AND RECORDS; TAX; CAPITAL
ACCOUNTS; ALLOCATIONS

 

6.1          General
Accounting Matters.

 

(a)           Allocations
of Net Income or Net Losses pursuant to Section 6.4 shall be made at the
end of each Fiscal Period, at such times as the Carrying Value of Company
assets is adjusted pursuant to the definition thereof and at such other times
as required by this Agreement.

 

(b)           Each
Member shall be supplied with the information of the Company necessary to
enable such Member to prepare in a timely manner (and in any event within
120 days after the end of the Company Fiscal Year) its federal, state and
local income tax returns and such other financial or other statements and
reports that the Manager deems appropriate.

 

(c)           The
Manager shall keep or cause to be kept books and records pertaining to the
Company’s business showing all of its assets and liabilities, receipts and
disbursements, Net Income and Net Losses, Members’ Capital Accounts and all
transactions entered into by the Company. Such books and records of the Company
shall be kept at the office of the Company and the Members and their
representatives shall at all reasonable times have free access thereto for the
purpose of inspecting or copying the same.

 

35

 

(d)           The
Company’s books of account shall be kept on an accrual basis or as otherwise
provided by the Manager and otherwise in accordance with GAAP, except that for
income tax purposes such books shall be kept in accordance with applicable tax
accounting principles.

 

(e)           The
Company shall, and shall cause each of its Subsidiaries to, (i) maintain
accurate books and records reflecting its assets and liabilities and maintain
proper and adequate “internal control over financial reporting” (as such term
is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act,
and as such rules may be amended and supplemented from time to time); and
(ii) deliver to any Member, immediately upon request, certifications and
statements with respect to the Company and its Subsidiaries satisfying the
requirements of Rule 13a-l4(a) or 15d-14(a) under the Exchange Act, and
18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

 

(f)            Subject
to the confidentiality provisions of this Agreement, the Company will permit
representatives of a Member and its Affiliates, at their expense, to obtain all
books and accounts, documents and other information (other than documents and
information relating to pricing or other proprietary information of any Member
or its Affiliates collected pursuant to any Exhibitor
Services
Agreement) in the possession of the Company and its Subsidiaries, if any, as
may reasonably be requested in order to enable such Member to monitor its
investment in the Company and to exercise its rights under this Agreement and,
to the extent applicable, to provide such other access and information as may
be reasonably required to enable such Member to account for the investment in
the Company and otherwise comply with the requirements of applicable laws,
generally accepted accounting principles and requirements of any Governmental
Authority.

 

6.2          Certain
Tax Matters. The Company shall make the TEFRA Election for all
taxable years of the Company. The “tax matters partner” for purposes of Section
6231(a)(7) of the Code shall be NCM Inc. (the “Tax Matters Member”). The Tax Matters Member shall have
all the rights, duties, powers and obligations provided for in Sections 6221
through 6232 of the Code with respect to the Company. The Tax Matters Member
shall inform each other Member of all significant matters that may come to its
attention in its capacity as such by giving notice thereof within ten days
after becoming aware thereof and, within such time, shall forward to each other
Member copies of all significant written communications it may receive in such
capacity. This provision is not intended to authorize the Tax Matters Member to
take any action left to the determination of an individual Member under
Sections 6222 through 6231 of the Code.

 

6.3          Capital
Accounts.

 

(a)           The
Company shall maintain for each Member on the books of the Company a capital
account (a “Capital Account”).
Each Member’s Capital Account shall be maintained in accordance with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and the provisions
of this Agreement.

 

(b)           The
Capital Account of a Member shall be credited with the amount of all Capital
Contributions by such Member to the Company. The Capital Account of a Member
shall 

 

36

 

be increased by the amount of any Net Income
(or items of gross income) allocated to such Member pursuant to this
Article 6, and decreased by (i) the amount of any Net Losses (or
items of loss or deduction) allocated to such Member pursuant to this
Article 6 and (ii) the amount of any cash distributed to such Member
and (iii) the fair market value of any asset distributed in kind to such
Member (net of all liabilities secured by such asset that such Member is
considered to assume or take subject to under Section 752 of the Code). The
Capital Account of the Member also shall be adjusted appropriately to reflect
any other adjustment required pursuant to Treasury Regulations Section 1.704-1
or 1.704-2.

 

(c)           In
the event that any Interest in the Company is Transferred, the transferee of
such Interest shall succeed to the portion of the transferor’s Capital Account
attributable to such Interest.

 

(d)           For
purposes of this Article 6, the Manager may apply any reasonable
convention in determining the date during the same month on which any Member is
admitted to the Company.

 

6.4          Allocations.

 

(a)           General.
Except as provided in Section 6.4(b) and as otherwise provided in this
Agreement, Net Income and Net Losses, and, to the extent necessary, individual
items of Company income, gain, loss and deduction, shall be allocated to the
Members in such amounts, to the maximum extent possible, to make the Adjusted
Capital Account Balances of the Members (after the application of this Section
6.4(a)) to be in proportion to the Members’ Percentage Interests.

 

(b)           Special
Allocations.

 

(i)            Qualified Income Offset. If
any Member receives an unexpected adjustment, allocation, or distribution
described in Section l.704-l(b)(2)(ii)(d)(4-6) of the Treasury Regulations in
any Fiscal Year or other period which would cause such Member to have a deficit
Adjusted Capital Account Balance as of the end of such Fiscal Year or other
period, items of Company income and gain (consisting of a pro rata portion of
each item of Company income, including gross income and gain) shall be
specifically allocated to such Member in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations, the deficit in
such Member’s Adjusted Capital Account Balance as quickly as possible. This
Section 6.4(b)(i) is intended to comply with the qualified income offset
provision in Section l.704-l(b)(2)(ii)(d) of the Treasury Regulations and shall
be interpreted consistently therewith.

 

(ii)           Gross Income Allocation. If
any Member would otherwise have a deficit Adjusted Capital Account Balance as
of the last day of any Fiscal Year or other period, individual items of income
and gain of the Company shall be specifically allocated to such Member (in the
manner specified in Section 6.4(b)(i)) so as to eliminate such deficit as
quickly as possible.

 

(iii)          Partnership Minimum Gain Chargeback.
If there is a net decrease in Partnership Minimum Gain during a Fiscal Year or
other period, each Member shall be 

 

37

 

allocated items of Company gross income and gain for such Fiscal Year
or other period (and, if necessary, subsequent Fiscal Years or periods) in
proportion to, and to the extent of, such Member’s share of such net decrease,
except to the extent such allocation would not be required by Section
1.704-2(f) of the Treasury Regulations. The amounts referred to in this Section
6.4(b)(iii), and the items to be so allocated shall be determined in accordance
with Section 1.704-2 of the Treasury Regulations. This Section 6.4(b)(iii) is
intended to constitute a “minimum gain chargeback” provision as described in
Section 1.704-2(f) or 1.704-2(j)(2) of the Treasury Regulations and shall be
interpreted consistently therewith.

 

(iv)          Partner Nonrecourse Debt Minimum
Gain Chargeback. If there is a net decrease in Partner Nonrecourse Debt
Minimum Gain during a Fiscal Year or other period, then each Member shall be
allocated items of Company gross income or gain equal to such Member’s share of
such net decrease, except to the extent such allocation would not be required
under Section l.704-2(i)(4) or 1.704-2(j)(2) of the Treasury Regulations. The
amounts referred to in this Section 6.4(b)(iv) and the items to be so allocated
shall be determined in accordance with Section 1.704-2 of the Treasury
Regulations. This Section 6.4(b)(iv) is intended to comply with the minimum
gain chargeback requirement contained in Section 1.704-2(i)(4) of the Treasury
Regulations and shall be interpreted consistently therewith.

 

(v)           Limitations on Net Loss
Allocations. With respect to any Member, notwithstanding the provisions of
Section 6.4(a), the amount of Net Losses for any Fiscal Year or other period
that would otherwise be allocated to a Member under Section 6.4(a) shall not
cause or increase a deficit Adjusted Capital Account Balance. Any Net Losses in
excess of the limitation set forth in this Section 6.4(b)(v) shall be allocated
among the Members, pro rata, to the extent each, respectively, is liable or
exposed with respect to any debt or other obligations of the Company.

 

(vi)          Partner Nonrecourse Deductions.
Partner nonrecourse deductions (as described in Section 1.704-2(i) of the
Treasury Regulations) for any Fiscal Year or other period shall be specifically
allocated to the Members who bear the economic risk of loss with respect to
Partner Nonrecourse Debt to which such partner nonrecourse deductions are
attributable in accordance with Section 1.704-2(i)(1) of the Treasury
Regulations.

 

(vii)         Nonrecourse Deductions. Nonrecourse
deductions (as described in Section 1.704-2(b) of the Treasury Regulations) for
any Fiscal Year or other period shall be allocated to the Founding Members in
accordance with their relative Percentage Interests.

 

(viii)        Excess Nonrecourse Liabilities. If
the built-in gain in Company assets subject to Nonrecourse Debts exceeds the
gain described in Section 1.752-3(a)(2) of the Treasury Regulations, the Excess
Nonrecourse Liabilities shall be allocated (i) first, among the Founding
Members up to the amount of built-in gain that is allocable to the Founding
Members on Section 704(c) Property, (ii) second, among the Members other than
the Founding Members up to the amount of built-in gain that is allocable to
such other Members on Section 704(c) Property, and (iii) last, any remaining
Excess Nonrecourse Liabilities shall be allocated among the Members in
accordance with their relative Percentage Interests.

 

38

 

(ix)           Ordering Rules. Anything
contained in this Agreement to the contrary notwithstanding, allocations for
any Fiscal Period or other period of nonrecourse deductions (as described in
Section 1.704-2(b) of the Treasury Regulations) or partner nonrecourse deductions
(as described in Section 1.704-2(i) of the Treasury Regulations), or of items
required to be allocated pursuant to the minimum gain chargeback requirements
contained in Sections 6.4(b)(iii) and 6.4(b)(iv), shall be made before any
other allocations hereunder.

 

(x)            Special Allocation. If, for
federal income tax purposes, the Company is deemed to have made a deductible
payment to a Member that is not actually paid, then notwithstanding Section
6.4(a), the deduction attributable to such payment shall be specially allocated
to such Member.

 

(c)           Curative
Provisions. The allocations set forth in Section 6.4(b)(i)-(viii) (the “Regulatory Allocations”) are intended to comply with
certain requirements of Section 1.704-1(b) and 1.704-2 of the Treasury
Regulations. The Regulatory Allocations may not be consistent with the manner
in which the Members intend to allocate Net Income and Net Losses or make
Company contributions. Accordingly, notwithstanding the other provisions of
this Agreement, but subject to the Regulatory Allocations, Members shall
reallocate items of income, gain, deductions and loss among the Members so as
to eliminate the effect of the Regulatory Allocations and thereby cause the
respective Capital Accounts of the Members to be in the amounts (or as close
thereto as possible) they would have been if Net Income and Net Losses (and
such other items of income, gain, deduction and loss) had been allocated
without reference to the Regulatory Allocations. In general, the Members
anticipate that this will be accomplished by specially allocating other Net
Income and Net Losses (and such other items of income, gain, deduction and
loss) among the Members so that the net amount of the Regulatory Allocations
and such special allocations to each such Member is zero. In addition, if in
any Fiscal Year or other period there is a decrease in Partnership Minimum
Gain, or in Partner Nonrecourse Debt Minimum Gain, and application of the
minimum gain chargeback requirements set forth in this Section 6.4 would cause
a distortion in the economic arrangement among the Members, the Members may, if
they do not expect that the Company will have sufficient other income to
correct such distortion, request the Internal Revenue Service to waive either
or both of such minimum gain chargeback requirements. If such request is
granted, this Agreement shall be applied in such instance as if it did not
contain such minimum gain chargeback requirements.

 

6.5          Allocations
of Net Income and Net Losses for Federal Income Tax Purposes. The
Company’s ordinary income and losses and capital gains and losses as determined
for federal income tax purposes (and each item of income, gain, loss or
deduction entering into the computation thereof) shall be allocated to the
Members in the same proportions as the corresponding “book” items are allocated
pursuant to Section 6.4 of this Agreement. Notwithstanding the foregoing
sentence, federal income tax items relating to any Section 704(c) Property
shall be allocated among the Members in accordance with Section 704(c) of the
Code and Treasury Regulations Section 1.704-1(b)(2)(iv)(g) to take into account
the difference between the fair market value and the tax basis of such Section
704(c) Property using any method approved by the Manager and prescribed under
Treasury Regulations corresponding to Section 704(c) of the Code. Items
described in this Section 6.5 shall neither be credited nor charged to the
Members’ Capital Accounts.

 

39

 

6.6          Elections.
Except as otherwise expressly provided herein, all elections required or
permitted to be made by the Company under the Code or other applicable tax law,
and all decisions with respect to the calculation of its taxable income or tax
loss under the Code or other applicable tax law, shall be made in such manner
as may be reasonably determined by the Manager; provided that the
Company shall make (i) the election to amortize organizational expenses
pursuant to Section 709 of the Code and the regulations promulgated thereunder,
and (ii) the TEFRA Election as provided in Section 6.2.

 

6.7          Tax
Year. The taxable year of the Company shall be the same as its
Fiscal Year.

 

6.8          Withholding
Requirements. Notwithstanding any provision herein to the
contrary, the Manager is authorized to take any and all actions that it
determines to be necessary or appropriate to ensure that the Company satisfies
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 the foregoing, the Manager may withhold from
distributions the amount that it determines is required to be withheld from the
amount otherwise distributable to any Member pursuant to Article 5; provided,
however, that such amount shall be deemed to have been distributed to
such Member for purposes of applying Article 5 and this Article 6. The
Manager will not withhold any amounts from cash or other property distributable
to any Member to satisfy any withholding and tax payment obligations to the
extent that such Member demonstrates to the Manager’s satisfaction that such
Member is not subject to such withholding and tax payment obligation. In the
event that the Manager withholds or pays tax in respect of any Member for any
period in excess of the amount of cash or other property otherwise
distributable to such Member for such period (or there is a determination by
any taxing authority that the Company should have withheld or paid any tax for
any period in excess of the tax, if any, that it actually withheld or paid for
such period), such excess amount (or such additional amount) shall be treated
as a recourse loan to such Member that shall bear interest at the rate of ten
percent per annum and be payable on demand.

 

6.9          Reports
to Members.

 

(a)           The
books of account and records of the Company shall be audited as of the end of
each Fiscal Year by the Company’s independent public accountants.

 

(b)           Within
60 calendar days after the end of each Fiscal Period of each Fiscal Year
of the Company (or the next Business Day if the 60th calendar day is
not a Business Day), the Company shall send to each Person who was a Member
during such period an unaudited report setting forth the following as of the
end of such Fiscal Period:

 

(i)            unless such Fiscal Period is the
last Fiscal Period of the Fiscal Year, an unaudited balance sheet as of the end
of such period;

 

(ii)           unless such Fiscal Period is the last
Fiscal Period of the Fiscal Year, an unaudited income statement of the Company
for such period;

 

(iii)          a statement of each Member’s Capital
Account;

 

(iv)          a summary of the Company’s activities
during such period; and

 

40

 

(v)           a cash flow statement.

 

(c)           Within
100 calendar days after the end of each Fiscal Year of the Company (or the
next Business Day if the 100th calendar day is not a Business Day),
the Company shall send to each Person who was a Member during such period an
audited report setting forth the following as of the end of such Fiscal Year:

 

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

 

(ii)           an audited income statement of the
Company for such Fiscal Year;

 

(iii)          a statement of each Member’s Capital
Account; and

 

(iv)          a cash flow statement.

 

(d)           The
Company shall provide each Member with monthly “flash reports.”

 

(e)           With
reasonable promptness, the Manager will deliver such other information
available to the Manager, including financial statements and computations, as
any Member may from time to time reasonably request in order to comply with
regulatory requirements, including reporting requirements, to which such Member
is subject.

 

6.10        Auditors.
The auditors of the Company shall be Deloitte & Touche LLP, unless
otherwise determined by the Manager.

 

6.11        Transfers
During Year. In order to avoid an interim closing of the Company’s
books, the allocation of Net Income and Net Losses under this Article 6 between
a Member who Transfers part or all of its Interest in the Company during the
Company’s Fiscal Year and such Member’s transferee, or to a Member whose
Percentage Interest varies during the course of the Company’s Fiscal Year, may
be determined pursuant to any method chosen by the Manager.

 

6.12        Code
Section 754 Election. Pursuant to the Tax Receivable Agreement,
the Company shall make the election provided for under Code Section 754.

 

ARTICLE 7 

DISSOLUTION 

 

7.1          Dissolution.

 

(a)           The
Company shall be dissolved and subsequently terminated upon the occurrence of
the first of the following events:

 

(i)            the unanimous decision of the
Members that then hold Common Units to dissolve the Company;

 

(ii)           the entry of a decree of judicial
dissolution of the Company pursuant to § 18-802 of the LLC Act; or

 

41

 

(iii)          the termination of the legal existence
of the last remaining Member or the occurrence of any other event that causes
the last remaining Member to cease to be a Member of the Company, unless the
Company is continued without dissolution pursuant to Section 7.1(b).

 

(b)           Upon
the occurrence of any event that causes the last remaining Member of the
Company to cease to be a Member of the Company (other than upon continuation of
the Company without dissolution upon an assignment by the Member of all of its
Interest in the Company 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 such Member is hereby authorized to, and shall, within 90
days after the occurrence of the event that terminated the continued membership
of such Member in the Company, agree in writing (i) to continue the Company and
(ii) to the admission of the personal representative or its nominee or designee,
as the case may be, as a substitute Member of the Company, effective as of the
occurrence of the event that terminated the continued membership of such Member
in the Company.

 

(c)           Notwithstanding
any other provision of this Agreement, the bankruptcy (as defined in §§
18-101(1) and 18-304 of the LLC Act) of a Member shall not cause the Member to
cease to be a Member of the Company and upon the occurrence of such an event,
the Company shall continue without dissolution.

 

7.2          Winding-Up.
When the Company is dissolved, the business and property of the Company shall
be wound up in an orderly manner by the Manager or by a liquidating trustee as
may be appointed by the Manager (the Manager or such liquidating trustee, as
the case may be, the “Liquidator”).
If the Members are unable to agree with respect to the distribution of any
Company assets, then the Liquidator shall use its reasonable best efforts to
reduce to cash and Cash Equivalents such assets of the Company as the
Liquidator shall deem it advisable to sell, subject to obtaining fair market
value for such assets and any tax or other legal considerations. No Member
shall take any action (with respect to the Company) that is inconsistent with,
or not necessary to or appropriate for, the winding up of the Company’s
business and affairs.

 

7.3          Final
Distribution.

 

(a)           As
soon as reasonable following the event that caused the dissolution of the
Company, the assets of the Company shall be applied in the following manner and
order:

 

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

 

(ii)           to pay, in accordance with the
provisions of this Agreement, on a pro rata basis, the debts payable to all
creditors of the Company that are Members, either by actual payment or by
making a reasonable provision therefor; and

 

(iii)          to distribute the remaining assets of
the Company to the Members in accordance with Section 5.4(b), taking into
account all adjustments to Capital Accounts or offsets required under this
Agreement through the date of distribution.

 

42

 

(b)           If
any Member has a deficit balance in its Capital Account in excess of any unpaid
Capital Contributions (if any), such Member shall have no obligation to make
any Capital Contribution to the Company with respect to such deficit, and such
deficit shall not be considered a debt owed to the Company or to any other
Person for any purpose whatsoever.

 

(c)           Each
Member shall look solely to the assets of the Company for the amounts
distributable to it hereunder and shall have no right or power to demand or
receive property therefor from any other Member.

 

(d)           The
Company shall terminate when (i) all of the assets of the Company, after
payment of or due provision for all debts, liabilities and obligations of the
Company shall have been distributed to the Member in the manner provided for in
this Agreement, and (ii) the Certificate shall have been canceled in the manner
required by the LLC Act.

 

ARTICLE 8

TRANSFER; SUBSTITUTION; ADJUSTMENTS

 

8.1          Restrictions
on Transfer.

 

(a)           Notwithstanding
anything contained herein to the contrary, each Member may, subject to Section
8.1(b), Transfer any or all of its Units. It is a condition to any Transfer by
a Member (the “Transferring Member”)
otherwise permitted hereunder that the transferee (i) agrees to become a party
to, and be bound by the terms of, this Agreement to the same extent as the
Transferring Member, and (ii) assumes by operation of law or express agreement
all of the obligations of the Transferring Member under this Agreement or to
which such Transferring Member is a party with respect to such Transferred
Units or other Equity Interests in the Company. Notwithstanding the foregoing,
any transferee of any Transferred Units or other Equity Interests in the
Company shall be subject to any and all ownership limitations contained in this
Agreement or any other agreement with the Company to which such Transferring
Member is a party. Any transferee, whether or not admitted as a Member, shall
take subject to the obligations of the transferor hereunder.

 

(b)           In
addition to any other restrictions on Transfer herein contained, including,
without limitation, the provisions of this Article 8, any purported
Transfer or assignment of a Unit or other Equity Interests in the Company by
any Member made in the following events shall be void ab initio:

 

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

 

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

 

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

 

43

 

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

 

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

 

(vi)          if such Transfer subjects the Company
to be regulated under the Investment Company Act of 1940, the Investment
Advisors Act of 1940 or ERISA, each as amended;

 

(vii)         if such Transfer may cause the Company
to cease to be classified as a partnership for federal or state income tax
purposes;

 

(viii)        if such Transfer violates any applicable
laws; or

 

(ix)           if the Company does not receive
written instruments (including without limitation, copies of any instruments of
Transfer and such assignee’s consent to be bound by this Agreement as an
assignee) that are in a form satisfactory to the Manager (in its sole and
absolute discretion).

 

8.2          Substituted
Members.

 

(a)           No
Member shall have the right to substitute a transferee as a Member in his or
her place with respect to any Units or other Equity Interests in the Company so
Transferred (including any transferee permitted by Section 8.1) unless
(i) such Transfer is made in compliance with the terms of this Agreement and
any other agreements with the Company or other Members to which such transferor
Member is a party and (ii) such transferee assumes, by written instrument
satisfactory to the Company pursuant to Section 8.l(b)(ix) above, all the
rights and powers and is subject to all the restrictions and liabilities that
were applicable to the transferor by virtue of the transferor’s ownership of
the Units or other Equity Interests in the Company being Transferred.

 

(b)           Except
as provided in Section 8.2(c) and otherwise in this Agreement, a transferee who
has been admitted as a Member in accordance with Section 8.2(a) shall have
all the rights and powers and be subject to all the restrictions and
liabilities of a Member under this Agreement holding the same Units or other
Equity Interests in the Company. The admission of any transferee as a Member
shall be subject to the provisions of Section 3.1.

 

(c)           In
the event of a Transfer by a Founding Member, the transferee shall not have the
rights and powers of a Founding Member under this Agreement unless (i) the
transferee is a Permitted Transferee of the Founding Member prior to and
following the Transfer, or (ii) in the case of a direct or indirect Change of
Control of the Founding Member, or any direct or indirect holder of equity in
the Founding Member, following the Change of Control the 

 

44

 

Founding Member’s ESA Party or its
stockholders owns 50% or more of the general voting power of the transferee.

 

8.3          Effect
of Void Transfers. No Transfer of any Units owned by a Member in
violation hereof shall be made or recorded on the books of the Company, and any
such purported Transfer shall be void and of no effect.

 

ARTICLE 9

REDEMPTION RIGHT OF MEMBER

 

9.1          Redemption
Right of a Member.

 

(a)           Each Member (other than NCM
Inc.) shall be entitled to cause the Company to redeem its Common Units (the “Redemption Right”) from time to time. A
Member desiring to exercise its Redemption Right (the “Redeeming Member”) shall exercise such
right by giving written notice (the “Redemption
Notice”) to the Company (with a copy to NCM Inc.). The
Redemption Notice shall specify the number of Common Units (the “Redeemed Units”) that the Redeeming
Member intends to have the Company redeem and a date, which is not less than
seven (7) Business Days nor more than 10 Business Days after delivery of the
Redemption Notice, on which exercise of the Redemption Right shall be completed
(the “Redemption Date”). Unless
the Redeeming Member has timely delivered a Retraction Notice as provided in
Section 9.1(b), on the Redemption Date (to be effective immediately prior to
the close of business on the Redemption Date) (i) the Redeeming Member shall transfer
and surrender the Redeemed Units to the Company, free and clear of all liens
and encumbrances, and (ii) the Company shall (x) cancel the Redeemed Units, (y)
transfer to the Redeeming Member the consideration to which the Redeeming
Member is entitled under Section 9.1(b), and (z) issue to the Redeeming
Member pursuant to Section 3.4(h) a certificate for a number of Common Units
equal to the difference (if any) between the number of Common Units evidenced
by the certificate surrendered by the Redeeming Member pursuant to clause (i)
of this Section 9.1(a) and the Redeemed Units.

 

(b)           In
exercising its Redemption Right, a Redeeming Member, at NCM Inc.’s option as provided
in Section 3.5(b) and subject to Section 9.1(d), shall be entitled to receivethe Share Settlement or the Cash
Settlement. Within three (3) Business Days of delivery of the Redemption
Notice, NCM Inc. shall give written notice (the “Contribution Notice”) to the
Company (with a copy to the Redeeming Member) of its intended settlement
method; provided that if NCM Inc. does not timely deliver a Contribution
Notice, NCM Inc. shall be deemed to have elected the Share Settlement method. If NCM
Inc. elects the Cash Settlement method, the Redeeming Member may retract its
Redemption Notice by giving written notice (the “Retraction Notice”) to the
Company (with a copy to NCM Inc.) within two (2) Business Days of delivery of
the Contribution Notice. The timely delivery of a Retraction Notice shall
terminate all of the Redeeming Member’s, Company’s and NCM Inc.’s rights and
obligations under this Section 9.1 arising from the Redemption Notice.

 

(c)           The number of shares of NCM Inc.
common stock and the Redeemed Units Equivalent that a Redeeming Member is
entitled to receive under Section 9.1(b) (whether 

 

45

 

through a Share
Settlement or Cash Settlement) shall not be adjusted on account of any distributions
previously made with respect to the Redeemed Units or dividends previously paid
with respect to NCM Inc. common stock; provided, however, that if
a Redeeming Member causes the Company to redeem Redeemed Units and the
Redemption Date occurs subsequent to the record date for any distribution with
respect to the Redeemed Units but prior to payment of such distribution, the
Redeeming Member shall be entitled to receive such distribution with respect to
the Redeemed Units on the date that it is made notwithstanding that the
Redeeming Member transferred and surrendered the Redeemed Units to the Company
prior to such date.

 

(d)           In
the event of a reclassification or other similar transaction as a result of
which the shares of NCM Inc. common stock are converted into another security,
then in exercising it Redemption Right a Redeeming Member shall be entitled to
receive the amount of such security that the Redeeming Member would have
received if such Redemption Right had been exercised and the Redemption Date
had occurred immediately prior to the record date of such reclassification or
other similar transaction.

 

(e)           The
provisions of this Section 9.1 and Section 3.5(b) shall be interpreted and applied
in a manner consistent with the corresponding provisions of NCM Inc.’s
certificate of incorporation.

 

9.2          Effect
of Exercise of Redemption Right. This Agreement shall continue
notwithstanding the exercise of a Redeeming Member’s Redemption Right and all
governance or other rights set forth herein shall be exercised by the remaining
Members and the Redeeming Member (to the extent of such Redeeming Member’s
remaining Interest in the Company). No exercise of a Redeeming Member’s
Redemption Right shall relieve such Redeeming Member of any prior breach of
this Agreement. Notwithstanding the exercise of a Redeeming Member’s Redemption
Right, the Exhibitor Services Agreement
executed between such Redeeming Member’s ESA Party (if such Redeeming Member is
a Founding Member) and the Company shall remain in full force and effect in
accordance with the terms of such Exhibitor Services Agreement.
The Redeeming Member (if a Founding Member) and its Affiliates shall retain all
ownership and rights with respect to its theatres and other assets that are not
Contributed Assets (as defined in Section 2.5 of the Contribution and Unit
Holders Agreement). All Contributed Assets of such Member shall remain the sole
and exclusive property of the Company.

 

ARTICLE 10 

MISCELLANEOUS 

 

10.1        Agreement
to Cooperate; Further Assurances. In
case at any time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and Managers of the Company and
each Member and their respective Affiliates shall execute such further
documents (including assignments, acknowledgments and consents and other
instruments of Transfer) and shall take such further action as shall be
necessary or desirable to effect such Transfer and to otherwise carry out the
purposes of this Agreement, in each case to the extent not inconsistent with
applicable law.

 

46

 

10.2        Amendments.
Except as otherwise expressly provided in this Agreement (including as provided
in Sections 4.3(b)(vi) and 4.3(b)(xix)), amendments to this Agreement shall
require a Majority Member Vote; provided, however, that
(i) this Agreement may not be amended so as to materially impair the
voting power or economic rights of any outstanding Common Units in relation to
any other outstanding Units or of any Member in relation to the other Members,
in either case, without the consent of each Member and the holders representing
a majority of the then issued and outstanding Units or the affected Member, as
the case may be, and (ii)  Article 8 may only be amended with the
approval of the Manager and a Majority Member Vote.

 

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

 

(a)           (i)            Each Member shall use and cause its
Affiliates to use the same degree of care it uses to safeguard its own
Confidential Information (as defined below) and to cause its and its Affiliates’
directors, officers, employees, agents and representatives to keep confidential
all Confidential Information, including but not limited to Intellectual
Property and other Proprietary Information of the other Members and the
Company, and

 

(ii)           Each Member shall hold and shall
cause its Affiliates to hold and shall cause its and its Affiliates’ directors,
officers, employees, agents and representatives to hold in confidence, unless
compelled to disclose by judicial or administrative process or, in the opinion
of counsel, by the requirements of law, all documents and information
concerning any other party hereto furnished it by such other party or its
representatives in connection with the transactions contemplated by this
Agreement (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) previously known by the party to which it is furnished lawfully and
without breaching or having breached an obligation of such party or the
disclosing party to keep such documents and information confidential,
(B) in the public domain through no fault of the disclosing party, or
(C) independently developed by the disclosing party without using or
having used the Confidential Information.

 

(b)           Each
Member agrees that the Confidential Information of the Company shall only be
disclosed in secrecy and confidence, and is to be maintained by them in secrecy
and confidence subject to the terms hereof. Each Member shall (i) not,
directly or indirectly, use the Confidential Information of the Company, except
as necessary in the ordinary course of the Company’s business, or disclose the
Confidential Information of the Company to any third party and (ii) inform
all of its employees to whom the Confidential Information of the Company is
entrusted or exposed of the requirements of this Section and of their
obligations relating thereto.

 

(c)           The
Company shall preserve the confidentiality of all Confidential Information
supplied by the Members and their Affiliates (“Member Information”) to the same extent that a
Member must preserve the confidentiality of Confidential Information pursuant
to Sections 10.3(a) and (b).

 

47

 

(d)           Member
Information shall not be supplied by the Company or its Subsidiaries to any
Person who is not an employee of the Company or the Manager, including any
employee of a Member who is not an employee of the Company or the Manager. Notwithstanding
the foregoing, Member Information may be disclosed to authorized third-party
contractors of the Company if the Company determines that such disclosure is
reasonably necessary to further the business of the Company, and if such
contractor executes a non-disclosure agreement preventing such contractor from
disclosing such Member Information for the benefit of each provider of Member
Information in a form reasonably acceptable to the Founding Members. Member
Information disclosed by any Member to the Company or the Manager shall not be
shared with any other Member that is not the Manager without the disclosing
Member’s written consent.

 

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

 

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

 

10.6        Notices.
All notices, demands or other communications to be given under or by reason of
this Agreement shall be in writing and shall be delivered by hand or sent by
facsimile, electronic mail or nationally recognized overnight delivery service
and shall be deemed given when received if delivered on a Business Day during
normal business hours of the recipient or, if not so delivered, on the next
Business Day following receipt. Notices to the Company or any Member shall be
delivered to the Company or such Member as set forth in Exhibit A,
as it may be revised from time to time. Any party to this Agreement may change
its address or fax number for notices, demands and other communications under
this Agreement by giving notice of such change to the other parties hereto in
accordance with this Section 10.6.

 

10.7        Integration.
This Agreement, together with the other Joint Venture Agreements and the
documents referred to herein or therein, or delivered pursuant hereto or
thereto, contain the exclusive entire and final understanding of the parties
with respect to the subject matter hereof and thereof. There are no agreements,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof and thereof other than those expressly set forth herein
and therein. Except as expressly set forth herein, this Agreement together with
the 

 

48

 

other Joint Venture Agreements
supersede all other prior agreements, discussions, negotiations, communications
and understandings between the parties with respect to such subject matter
hereof and thereof. No party has relied on any statement, representation,
warranty, or promise not expressly contained in this Agreement or another Joint
Venture Agreement in connection with this transaction.

 

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

 

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

 

10.10      Governing
Law; Submission to Jurisdiction.

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

(c)           In
the event of any action or other proceeding relating to this Agreement or the
enforcement of any provision of this Agreement, the prevailing party (as
determined by the court) shall be entitled to payment by the non-prevailing
party of all costs and expenses (including reasonable attorneys’ fees) incurred
by the prevailing party, including any costs and expenses incurred in
connection with any challenge to the jurisdiction or the convenience or
propriety of venue of proceedings before any state or federal court located in
Delaware or New York, New York.

 

[Signature Page to Follow]

 

50

 

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

 

	
   

  	
  AMERICAN MULTI-CINEMA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin 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 CINEMEDIA HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael L. Campbell

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael L. Campbell

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL CINEMEDIA, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Authorized Signatory

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
LIMITED LIABILITY OPERATING AGREEMENT

 

 

Exhibit A

 

Members and Units

 

	
  Names
  and Addresses

  	
   

  	
  Common
  Units

  	
   

  	
  Preferred
  Units

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMC Founding Member: 

  American Multi-Cinema, Inc. 
920 Main Street 

  Kansas City, MO 64105 

  Attention: Kevin M. Connor 

  Fax: (816) 480-4700 

  

  with a copy to: 

  Latham & Watkins LLP 

  885 Third Avenue 

  New York, NY 10022 

  Attention: David S. Allinson 

  Fax: (212) 751-4864

  	
   

  	
  17,474,890 
Common Units(1)

  	
   

  	
  18,822,976 
Preferred
  Units(2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cinemark Founding Member: 

  Cinemark Media, Inc. 

  c/o Cinemark Holdings, Inc. 

  3900 Dallas Parkway 

  Suite 500 

  Plano, TX 75093 

  Attention: Robert Copple 

  Fax: (974) 665-1003 

  

  with a copy to:  

  Cinemark Holdings, Inc. 

  3900 Dallas Parkway 

  Suite 500 

  Plano, TX 75093 

  Attention: Michael Cavalier 

  Fax: (974) 665-1003

  	
   

  	
  13,145,349 
Common Units(3)

  	
   

  	
  14,159,437 
Preferred
  Units(4)

  

 

(1) AMC –
Percentage Interest:  18.6%

 

(2) AMC will receive $259,346,737 in redemption and complete
satisfaction of AMC’s Preferred Units under Section 3.4(e).

 

(3) Cinemark Media – Percentage Interest:  14.0%

 

(4) Cinemark Media
will receive $195,091,561 in redemption and complete satisfaction of Cinemark Media’s
Preferred Units under Section 3.4(e).

 

A-1

 

	
  Names
  and Addresses

  	
   

  	
  Common
  Units

  	
   

  	
  Preferred
  Units

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Regal Founding Member: 

  Regal CineMedia Holdings, LLC 
7132 Regal Lane 

  Knoxville, TN 37918 

  Attention: General Counsel 

  Fax: (865) 922-6085 

  

  with a copy to:  

  Hogan & Hartson L.L.P. 

  1200 Seventeenth Street 

  Suite 1500 

  Denver, CO 80202 

  Attention: Christopher J. Walsh 

  Fax: (303) 899-7333

  	
   

  	
  21,230,712 
Common Units(5)

  	
   

  	
  22,868,538 
Preferred
  Units(6)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  National CineMedia, Inc. 

  9100 East Nichols Avenue 

  Suite 200 

  Centennial, CO 80112-3405 

  Attention: General Counsel 

  Fax: (303) 792-8649 

  

  with a copy to: 

  Holme Roberts & Owen LLP 

  1700 Lincoln Street 

  Suite 4100 

  Denver, CO 80203 

  Attention: W. Dean Salter 

  Fax: (303) 866-0200

  	
   

  	
  42,000,000 
Common Units(7)

  	
   

  	
  Zero (0) 
Preferred
  Units(8)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals:

  	
   

  	
  93,850,951
Common Units

  	
   

  	
  55,850,951 
Preferred
  Units

  

 

(5) Regal –
Percentage Interest:  22.6%

 

(6) Regal will receive $315,087,304 in redemption and complete
satisfaction of Regal’s Preferred Units under Section 3.4(e).

 

(7) NCM Inc. –
Percentage Interest:  44.8%

 

(8) NCM Inc.
will receive no amount under Section 3.4(e).

 

A-2

 

Exhibit B

 

Over-Allotment Unit Purchase

 

	
  Founding
  Member

  	
   

  	
  Common
  Units Sold in

  Over-Allotment Unit

  Purchase

  	
   

  	
  Consideration
  Received in

  Over-Allotment Unit

  Purchase

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMC Founding Member

  	
   

  	
  1,348,086 
Common Units

  	
   

  	
  $26,468,966
Cash

  
	
  Cinemark Founding Member

  	
   

  	
  1,014,088 
Common Units

  	
   

  	
  $19,911,073

  Cash

  
	
  Regal Founding Member

  	
   

  	
  1,637,826 
Common Units

  	
   

  	
  $32,157,856

  Cash

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals:

  	
   

  	
  4,000,000 
Common Units

  	
   

  	
  $78,537,895

  Cash

  

 

B-1

 

Exhibit C

 

Form of Common Unit Certificate

 

C-1

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