Document:

Exhibit
10.3

 

EXECUTION VERSION

 

 

 

 

DIGITAL
CINEMA IMPLEMENTATION PARTNERS, LLC 

 

 

AMENDED
AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT

 

 

DATED AS
OF MARCH 10, 2010

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  DEFINITIONS

  	
  1

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
  1.2

  	
  Other Definitional
  Provisions; Interpretation

  	
  11

  
	
  ARTICLE 2

  	
  FORMATION

  	
  11

  
	
  2.1

  	
  Formation; Qualification

  	
  11

  
	
  2.2

  	
  Name

  	
  12

  
	
  2.3

  	
  Term

  	
  12

  
	
  2.4

  	
  Headquarters Office

  	
  12

  
	
  2.5

  	
  Registered Agent and Office

  	
  12

  
	
  2.6

  	
  Purposes

  	
  12

  
	
  2.7

  	
  Powers

  	
  13

  
	
  ARTICLE 3

  	
  MEMBERS AND INTERESTS

  	
  13

  
	
  3.1

  	
  Members

  	
  13

  
	
  3.2

  	
  Meeting of Members

  	
  14

  
	
  3.3

  	
  Certain Duties and Obligations of the Members

  	
  15

  
	
  3.4

  	
  Units

  	
  15

  
	
  3.5

  	
  Authorization and Issuance of Additional Units

  	
  15

  
	
  3.6

  	
  Business Opportunities

  	
  16

  
	
  ARTICLE 4

  	
  MANAGEMENT AND OPERATIONS

  	
  16

  
	
  4.1

  	
  Management of the Company

  	
  16

  
	
  4.2

  	
  Composition of the Board

  	
  17

  
	
  4.3

  	
  Board Committees

  	
  19

  
	
  4.4

  	
  Board Meetings

  	
  19

  
	
  4.5

  	
  Matters Requiring Board Approval

  	
  20

  
	
  4.6

  	
  Officers

  	
  23

  
	
  4.7

  	
  Officers and Directors Insurance

  	
  24

  
	
  4.8

  	
  Budget

  	
  24

  
	
  4.9

  	
  Limitation of Liability; Exculpation

  	
  24

  
	
  4.10

  	
  Indemnification

  	
  25

  
	
  4.11

  	
  Title to Assets

  	
  26

  
				

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  CAPITAL CONTRIBUTIONS; DISTRIBUTIONS

  	
  27

  
	
  5.1

  	
  Capital Contributions

  	
  27

  
	
  5.2

  	
  Loans from Members

  	
  29

  
	
  5.3

  	
  Loans from Third Parties

  	
  29

  
	
  5.4

  	
  Non-Funding Member

  	
  29

  
	
  5.5

  	
  Distributions

  	
  30

  
	
  5.6

  	
  Valuation

  	
  31

  
	
  ARTICLE 6

  	
  BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS; ALLOCATIONS

  	
  31

  
	
  6.1

  	
  General Accounting Matters

  	
  31

  
	
  6.2

  	
  Certain Tax Matters

  	
  32

  
	
  6.3

  	
  Elections

  	
  33

  
	
  6.4

  	
  Tax Year

  	
  33

  
	
  6.5

  	
  Withholding Requirements

  	
  33

  
	
  6.6

  	
  Reports to Members

  	
  33

  
	
  6.7

  	
  Auditors

  	
  34

  
	
  6.8

  	
  Transfers During Year

  	
  34

  
	
  6.9

  	
  Code Section 754
  Election

  	
  35

  
	
  6.10

  	
  Tax Classification

  	
  35

  
	
  ARTICLE 7

  	
  DISSOLUTION

  	
  35

  
	
  7.1

  	
  Dissolution

  	
  35

  
	
  7.2

  	
  Winding-Up

  	
  35

  
	
  7.3

  	
  Final Distribution

  	
  36

  
	
  ARTICLE 8

  	
  TRANSFER; SUBSTITUTION; ADJUSTMENTS

  	
  37

  
	
  8.1

  	
  Restrictions on Transfer

  	
  37

  
	
  8.2

  	
  Substituted Members

  	
  38

  
	
  8.3

  	
  Transfers to Permitted Transferees

  	
  38

  
	
  8.4

  	
  Effect of Void Transfers

  	
  39

  
	
  8.5

  	
  Third Party Transferee

  	
  39

  
	
  8.6

  	
  Rights of First Offer

  	
  39

  
	
  ARTICLE 9

  	
  WITHDRAWAL OF MEMBER

  	
  41

  
	
  9.1

  	
  Withdrawal of a Founding Member

  	
  41

  
	
  9.2

  	
  Effect of Withdrawal

  	
  42

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  MISCELLANEOUS

  	
  42

  
	
  10.1

  	
  Agreement to Cooperate; Further Assurances

  	
  42

  
	
  10.2

  	
  Amendments

  	
  42

  
	
  10.3

  	
  Confidentiality

  	
  42

  
	
  10.4

  	
  Injunctive Relief

  	
  43

  
	
  10.5

  	
  Successors, Assigns and Transferees

  	
  44

  
	
  10.6

  	
  Notices

  	
  44

  
	
  10.7

  	
  Integration

  	
  44

  
	
  10.8

  	
  Severability

  	
  44

  
	
  10.9

  	
  Counterparts

  	
  45

  
	
  10.10

  	
  Governing Law;
  Submission to Jurisdiction

  	
  45

  
				

 

iii

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING
AGREEMENT

 

OF

 

DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC

 

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

 

RECITALS

 

WHEREAS, American
Multi-Cinema, Inc., a Missouri corporation (“AMC” or the “AMC
Founding Member”), Regal/DCIP Holdings, LLC, a Delaware limited
liability company (“Regal”
or the “Regal Founding Member”),
and Cinemark Media, Inc., a Delaware corporation (“Cinemark Media” or the “Cinemark Founding Member”) formed the
Company and entered into the original limited liability company operating
agreement as of February 12, 2007 (the “Original
Agreement”) for the purposes of (i) engaging in the Digital
Cinema Business and acquiring, holding, managing and otherwise dealing with the
assets and liabilities associated therewith, and (ii) engaging in such
other business activities as determined under the terms of this Agreement;

 

WHEREAS, AMC, Regal and
Cinemark Media have made Capital Contributions to the Company in the amounts
listed on Exhibit A hereto;

 

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

 

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

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

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

 

“Additional
Required Funding Notice” has the meaning set forth in the Equity
Contribution Agreement.

 

“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 

 

1

 

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, and (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.

 

“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.

 

“Allocations Exhibit”
means Exhibit B to this Agreement.

 

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

 

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

 

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

 

“Beneficial Owner” or “beneficial owner” (including, with
correlative meanings, the terms “beneficial
ownership” and “beneficially owns”)
has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable, except that a Person shall be deemed
to have Beneficial Ownership of all Units 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” means the Board of Directors of
the Company.

 

“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.

 

“Budget Deadlock” has the meaning set
forth in Section 4.5 of this Agreement.

 

“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 the Allocations Exhibit.

 

“Capital Contribution” means the total
amount contributed (or deemed to be contributed) to the Company in Cash and the
value of Contributed Equipment set forth in the applicable Installation
Agreement, and all other assets (at the agreed fair market value (net of all
liabilities secured by such assets that the Company is considered to assume or
take subject to Section 752 of the Code)) contributed to the Company by a
Member.

 

2

 

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

 

“Cash Equivalents” means (i) direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from
the date of acquisition thereof; (ii) investments in commercial paper
maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating obtainable from 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) investments in certificates of deposit, banker’s acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof that (1) has
a combined capital and surplus and undivided profits of not less than
$500,000,000, (2) has a long-term unsecured debt rating of “Aa3” or better
by Moody’s or, if not rated by Moody’s then otherwise approved by Moody’s, and (3) whose
deposits are insured by the FDIC; (iv) fully collateralized repurchase agreements
with a term of not more than 30 days for securities described in clause (i) above
and entered into with a financial institution satisfying the criteria described
in clause (iii) above; (v) money market funds that (A) comply
with the criteria set forth in Rule 2a 7 under the Investment Company Act
of 1940, (B) are rated AAA by S&P and Aaa by Moody’s, and (C) have
portfolio assets of at least $5,000,000,000; and (vi) in the case of any
Foreign Subsidiary, other short-term investments that are analogous to the
foregoing, are of comparable credit quality and are customarily used by
companies in the jurisdiction of such Foreign Subsidiary for cash management
purposes.

 

“Cause” means (i) willful
malfeasance or willful misconduct by a Director or Officer in connection with
the performance of his or her duties as such, (ii) the commission by a
Director or Officer of (A) any felony or (B) a misdemeanor involving
moral turpitude or (iii) a determination by a court of competent
jurisdiction in the United States that such Director or Officer, as such or in
any other capacity (whether or not relating to the Company), breached a
fiduciary duty owed by him or her to another Person.

 

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

 

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

 

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

 

“Chairman” has the meaning set forth in Section 4.2(b) 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 

 

3

 

at
least 50% of the voting securities 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 voting
securities 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
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 Director” has the meaning set
forth in Section 4.2(a)(ii) of this Agreement.

 

“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 any successor of Cinemark Media.

 

“Closing
Date” has the meaning set forth in the Kasima Parent Holdings
LLC Agreement.

 

“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.

 

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

 

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

 

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

 

“Contributed
Equipment” has the meaning set forth in the applicable
Installation 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.

 

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

 

4

 

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

 

“Director” means a member of the Board.

 

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

 

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

 

“Equity
Contribution Agreement” means that certain Equity Contribution
Agreement dated as of March 10, 2010, by and between the Company and
Kasima Parent Holdings, LLC.

 

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

 

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

 

“Excess
Costs” shall have the meaning set forth in the Kasima Parent
Holdings LLC Agreement.

 

“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”
means AMC, Cinemark USA, Inc., a Texas corporation, and Regal
Entertainment Group, a Delaware corporation.

 

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

 

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

 

5

 

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

 

“Fiscal Year” means (a) the period
commencing on January 1 and ending on December 31, 2010 and (b) any
subsequent twelve month period commencing on January 1 and ending on the
succeeding December 31.

 

“Foreign
Subsidiary” means any Subsidiary that is not a Subsidiary
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.

 

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

 

“Funding
Notice” has the meaning set forth in the Equity Contribution
Agreement.

 

“GAAP” means generally accepted
accounting principles in the United States in effect from time to time.

 

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

 

“Gross
Asset Value” has the meaning set forth in the Allocations
Exhibit.

 

“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, agreements to keep well, agreements to purchase assets, goods,
securities or services, agreements to take-or-pay or agreements to maintain a
minimum net worth, financial ratio or similar requirements, or otherwise) by
such Person.

 

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

 

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

 

6

 

“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 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.  Interests shall be expressed
as a number of Units and as a number of any additional Interests issued by the
Company pursuant to Section 3.5.

 

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

 

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

 

“Kasima
Parent Holdings LLC” means Kasima Parent Holdings, LLC, a
Delaware limited liability company.

 

“Kasima
Parent Holdings LLC Agreement” means that certain Limited
Liability Agreement of Kasima Parent Holdings, LLC, dated as of March 10,
2010, as amended, supplemented, restated or otherwise modified from time to
time.

 

“Liabilities” has the meaning set forth
in Section 4.10(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.

 

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

 

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

 

7

 

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

 

“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 admitted to
the Company as a member in accordance with the provisions of this Agreement
that has not ceased to be a Member as provided in Section 3.1(c) of
this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Optional
Funding Notice” has the meaning set forth in the Equity
Contribution Agreement.

 

“Percentage Interest” means the
percentage determined for each Member by dividing the amount of each Member’s
positive Capital Account by the aggregate positive Capital Accounts of all
Members, as determined from time to time; provided, however, that if any Member’s
Capital Account is negative at the time of determination, then the Percentage
Interests shall be determined by the Board.

 

“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-Affiliate’s general voting power is owned directly or indirectly
through one or more entities that 

 

8

 

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 (general or limited), trust, joint stock
company, business or statutory 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.

 

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

 

“Projected
Optional Capital Contribution Amount” has the meaning set forth
in Section 5.1(d) 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.

 

“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 any successor of Regal.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

“Software License Agreement” means the Second Amended
and Restated Software License Agreement, dated on or about the date hereof, by
and among the Company, AMC, Regal CineMedia Corporation, Cinemark USA, Inc.,
and NCM, 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  Item”
has the meaning set forth in the Allocations Exhibit.

 

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

 

“Third Party Transferee” has the meaning
set forth in Section 8.5 of this Agreement.

 

“Transaction
Documents” has the meaning set forth in the Kasima Parent
Holdings LLC Agreement.

 

“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 upon the foreclosure under any pledge or hypothecation
permitted by clause (b) below that results in a change of title), any
Units or other assets beneficially owned by a Person or any interest in any
Units or other assets beneficially owned by a Person.  Notwithstanding the foregoing:  (a) the Change of Control of any Member
or Permitted Transferee or any Affiliate of such Member or Permitted Transferee
(or any holder of equity in a Member or an Affiliate of a Member) or a Founding
Member’s Ultimate Parent or its stockholders shall not be deemed to be a
Transfer hereunder, and (b) a bona fide pledge of Units 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.

 

10

 

“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.

 

“Unit” means a fractional share of the
Interests of all Members issued in accordance with the terms of this Agreement,
including any additional Units issued by the Company pursuant to Section 3.5
representing such rights and obligations as shall be determined by the
Board.  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.

 

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

 

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

 

“Withdrawal Notice” has the meaning set
forth in Section 9.1 of this Agreement.

 

1.2          Other Definitional Provisions;
Interpretation.

 

(a)           The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement will refer to 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”)
was executed by an authorized person and filed with the Secretary of State of
the State of Delaware on even date with the execution of the Original Agreement
to form the Company as a limited liability company pursuant to the LLC Act.  This Agreement completely amends and restates
the Original Agreement in its entirety. 
The rights, duties and liabilities of the Members shall be as provided
in the LLC Act, except as otherwise provided in this Agreement.

 

11

 

(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 Board, 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 Board shall, to the extent necessary in the judgment of the Board,
maintain the Company’s good standing in each such jurisdiction.

 

(c)           Each Director and each Senior Officer
is 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 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 “Digital Cinema Implementation
Partners, LLC.”  However, the business of
the Company may be conducted upon compliance with all applicable laws under any
other name designated by the Board.

 

2.3          Term.  The term of the Company shall commence 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 Mahwah, New Jersey. 
The Board 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 Service Company, with its
address at 2711 Centerville Road, Suite 400, Wilmington, Delaware,
19808.  The name of the Company’s
registered agent at such address is Corporation Service Company.  The Board may at any time designate another
registered agent or registered office or both.

 

2.6          Purposes.  The purposes of the Company are to:

 

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

 

(b)           engage in all transactions and
activities contemplated by the Transaction Documents to which it is a party,
including, without limitation, (i) performing the services contemplated in
the Management Services Agreements (as defined under the Kasima Parent Holdings
LLC Agreement), (ii) taking all actions (or, as applicable, instructing
all designees on the board of directors or comparable managing body of its
Subsidiaries to take all actions) required or contemplated by the Transaction
Documents, and (iii) executing and delivering any other agreements,
documents, instruments, certifications and reports as are contemplated by the
Transaction Documents or are necessary or ancillary to the transactions
contemplated or permitted thereby (the purposes set forth in clauses (a) and
(b) collectively, the “Joint Venture
Purposes”).

 

12

 

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.

 

ARTICLE 3

 

MEMBERS AND INTERESTS

 

3.1          Members.

 

(a)           Exhibit A hereto contains
the name, address and number of Units owned by each Member as of the date
hereof.  The Company shall revise Exhibit A (i) from
time to time to reflect the issuance, conversion (if applicable) 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 Section 5.4.  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 5.4
shall be deemed to amend this Agreement, but shall not require the approval of
the Board or any Member (and Section 10.2 shall not apply to any such
amendment).  The Company shall send to
each Member a copy of Exhibit A each time it is amended pursuant to
this Section 3.1.

 

(b)           One or more additional Persons may be
admitted as a Member of the Company only upon (i) an issuance of Units
pursuant to Section 3.5 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 Board,
to be bound by all the terms and conditions of this Agreement.  Upon such execution and compliance with the
other provisions hereof, the Company shall amend Exhibit A and
shall amend this Agreement as the Board 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.

 

(c)           Subject to the other provisions of
this Section 3.1 and Section 8.2, each Person that receives 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 or as otherwise provided by
applicable law or herein, in which case Exhibit A shall be amended
to reflect that such Person is no longer a Member.

 

(d)           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 making or repayment of any
Capital Contribution of any other Member or (iii) any act or omission of
any other Member.

 

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

 

13

 

Founding Member so long as
such Person owns any Units.  If a Person
that is a Founding Member transfers all of its Units such Person shall cease to
be a Founding Member hereunder and shall be replaced as such Founding Member
hereunder by a Permitted Transferee (if there is one) of such Person designated
by the holders of a majority of the Units held by such Person’s Permitted
Transferees.

 

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 Board, 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 Board shall discuss
the matters and affairs of the Company, (ii) the Founding Members shall
designate their respective Directors to serve on the Board until the next
annual meeting or until successors are duly designated, and (iii) the
Board shall determine who will serve as Chairman until the next annual meeting
or until such successor is duly designated.

 

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

 

(c)           Place and Conduct of Meetings.  Meetings of the Members for the election of
Directors or for any other purpose 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 Board and stated in the notice of the meeting or in a duly executed
waiver of notice thereof.  All meetings
shall be conducted by the Chairman or such other Person as the Board may appoint
pursuant to such rules for the conduct of the meeting as the Board 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 Board.

 

(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 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.  Each Member shall make a
reasonable good faith effort to attend each duly called meeting of Members
either in person or represented by a valid written proxy.

 

14

 

(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.

 

(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, and with a consent in writing signed
by Members who are holders of outstanding 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 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 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 does
not and 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 and the LLC Act.

 

3.4          Units.

 

(a)           Units shall constitute equal
fractional units into which Interests in the Company shall be divided (and may
include fractions of Units as well as whole Units).

 

(b)           Units may be Transferred only in
accordance with Article 8.

 

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

 

15

 

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

 

ARTICLE 4

 

MANAGEMENT AND OPERATIONS

 

4.1          Management of the Company.

 

(a)           The Company shall have a Board, which
shall consist of Directors who shall constitute “managers” within the meaning
of the LLC Act and whose power and authority is expressly set forth
herein.  The Board shall have full power
and authority and absolute discretion to do all things deemed necessary or
desirable by it to conduct the business of the Company in the name of the
Company in accordance with Section 2.7. 
It is the intention of the Members, subject to the express provisions of
this Agreement, that the Board’s powers be as broad as the LLC Act may now or
hereafter envision, and that any powers that may be conferred only by contract
are deemed to be explicitly conferred hereby. 
In connection therewith, the Board may appoint Officers as provided in Section 4.6.  The day-to-day management, control and
operation of the Company shall be vested in the Officers in accordance with Section 4.6.  Except as otherwise expressly provided
herein, the Members shall not take part in the day-to-day management, operation
or control of the business and affairs of the Company, and the Members shall
only be entitled to vote on or consent to matters as expressly provided herein
or as required by mandatory provisions of the LLC Act.

 

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

 

(c)           Each Director shall, in the
performance of his or her duties, be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports or
statements presented to such Director by any Person (including, without
limitation, legal counsel and public accountants) as to matters that such Director
reasonably 

 

16

 

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

 

(d)           The Founding Members recognize that
they, or their Affiliates, are competitors in certain lines of business (and
will remain so after the date hereof) and that compliance with federal and
state antitrust laws requires appropriate limitations on the disclosure and
exchange of non-public information and on certain concerted conduct between and
among the Company and its Members (including Founding Members and other
Members).  Accordingly, the Board shall
adopt and provide for the implementation of arrangements, procedures and
practices by the Company governing the disclosure and exchange of non-public
information and concerted conduct between and among the Company and Members
(including Founding Members and other Members) in order to assure compliance
with applicable antitrust laws.  Such
procedures and practices may include (by way of illustration and not as a
limitation or exclusion) procedures and safeguards for communications and
information sharing, and for the planning and conduct of meetings and other
activities of the Company.

 

4.2          Composition of the Board.

 

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

 

(i)            the AMC Founding Member shall be
entitled to designate two (2) Directors (each an “AMC Director”);

 

(ii)           the Cinemark Founding Member shall be
entitled to designate two (2) Directors (each a “Cinemark Director”);

 

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

 

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

 

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

 

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

 

17

 

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

 

(c)           Designation; Election.  The Directors shall be determined in
accordance with Section 3.2(a) and Section 4.2(a) without a
vote of the Members, and each such Director shall serve until his earlier
resignation, death, retirement, disability or removal.

 

(d)           Vacancies.

 

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

 

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

 

(e)           Removal.

 

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

 

(ii)           Any Director may be removed for Cause
by a Majority Member Vote.  No removal of
a Director pursuant to this Section 4.2(e)(ii) shall affect any of the
rights of the applicable Founding Member to designate a different or
replacement Director.

 

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

 

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

 

18

 

4.3          Board Committees.  Subject to the other provisions of this
Agreement, the Board may submit and delegate any matter, function or
responsibility to any special committee established by the Board as it deems
appropriate under guidelines which it may determine.  The composition of any such committee shall
be determined by the Board, but in no event shall any such committee be
comprised of less than three (3) Directors, one of whom shall be an AMC
Director, one of whom shall be a Cinemark Director and one of whom shall be a
Regal Director.

 

4.4          Board Meetings.

 

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

 

(b)           Special Meetings.  In addition, at any time, any Director may
request the Chairman in writing to convene a meeting of the Board.  If the Chairman fails to convene a meeting of
the Board to be held within five Business Days after the date of such written
request, then such requesting Director shall have the right and authority to
convene a meeting of the Board.  The
requesting Director shall be entitled to set the agenda for any meeting
requested or convened by such Director. 
Matters voted on at a special meeting of the Board shall be limited to
those relating to the purpose or purposes for which such special meeting is
called.

 

(c)           Notice and Manner of Meeting.

 

(i)            Unless otherwise agreed by the Board
in the event of an emergency, a notice convening a meeting of the Board shall
be given to each Director at least 24 hours prior to (but excluding) the date
upon which the meeting is to be held and shall be accompanied by an agenda and
any other issues to be considered at such meeting together with all relevant
supporting reports and documentation.

 

(ii)           Notice of a meeting need not be given
to any Director if a written waiver of notice, executed by such Director before
or after the meeting, is filed with the records of the meeting, or to any
Director who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice.  A
waiver of notice need not specify the purposes of the meeting.

 

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

 

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

 

19

 

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

 

(e)           Board Action.  Except as otherwise provided in the
definition of Majority Director Vote:  (i) each
Director shall have one vote, and (ii) a Majority Director Vote shall be
the act of the Board.  Any instrument or
writing executed on behalf of the Company by any one or more of the Directors
or Senior Officers shall be valid and binding upon the Company when authorized
or directed by such action of the Board.

 

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

 

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

 

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

 

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

 

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

 

20

 

(c)           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 $1 million, or any
material modification of any such agreements or arrangements;

 

(d)           the entering into or consummation of
any agreements or arrangements involving annual receipts (including the fair
market value of any barter) in excess of $5 million, or any material
modification of any such agreements or arrangements;

 

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

 

(f)            the amendment of any provision of
this Agreement to authorize, and the issuance of, any additional Units and the
designations, preferences and relative, participating or other rights, powers
and duties thereof, pursuant to Section 3.5 (and Section 10.2 shall
not apply to any such amendment);

 

(g)           the hiring or termination of
employment of the CEO, or the entering into, amendment or termination of any
employment, severance, change of control or other contract with any member of
senior management or employee whose compensation package includes an equity
component;

 

(h)           the making of any change in the Joint
Venture Purposes;

 

(i)            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;

 

(j)            the leasing (as lessor), licensing
(as licensor) or other Transfer of assets (including securities) (x) having
a fair market value or for consideration exceeding $5 million, taken as a
whole, or (y) to which the revenues or the profits attributable exceed $5
million, 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;

 

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

 

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

 

(m)          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 

 

21

 

(including any stockholder
of REG, Marquee Holdings or Cinemark that would be deemed an Affiliate but for
the exception set forth in subsections (iii), (iv) or (v) of the
definition of Affiliate herein, or any of such stockholder’s Affiliates) 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;

 

(n)           the admission to the Company of any
new Member;

 

(o)           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), with an
aggregate value in excess of $1 million;

 

(p)           the dissolution of the Company or any
of its Significant Subsidiaries (as such term is defined in Rule 12b-2
promulgated under the Exchange Act); the adoption of a plan of liquidation of
the Company or any of its Significant Subsidiaries; any action by the Company
or any of its Significant Subsidiaries 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 any of its
Significant Subsidiaries, or seeking to adjudicate the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to the Company or any of its Significant
Subsidiaries, or (y) seeking appointment of a receiver, trustee, custodian
or other similar official for the Company or any of its Significant
Subsidiaries, or for all or any material portion of the assets of the Company
or any of its Significant Subsidiaries, or making a general assignment for the
benefit of the creditors of the Company or any of its Significant Subsidiaries;

 

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

 

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

 

(s)           the making of valuation
determinations pursuant to Section 5.6;

 

(t)            the approval of Transfers pursuant
to Article 8 and release of a Transferring Member pursuant to Sections 8.1(b) and
8.3(b);

 

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

 

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

 

(w)          the approval of any other
instructions, requirements, requests or assignments made by the Board to
management from time to time;

 

22

 

(x)            to the extent that the
organizational documents of any Subsidiary condition any action by such
Subsidiary on the affirmative vote or approval of any director appointed by the
Company or any Subsidiary, causing, permitting or approving of such director so
voting or giving such approval; and

 

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

 

No Separate Action Required.  The Company’s entry into Transaction
Documents to which the Company is a party and all of the actions contemplated
thereunder are hereby expressly approved, none of the restrictions set forth
herein shall be applicable thereto, and no separate Board approval thereof
shall be required.  The Board of
Directors is hereby authorized to cause the Company to enter into and perform
the Transaction Documents to which the Company is a party.

 

Budget Deadlock.  In the event that the Board
fails to approve (pursuant to Section 4.8) with a Majority Director Vote
any Budget on or before March 31st of each year
(a “Budget Deadlock”), then
the chief executive officers (or other appropriate officers) of each Founding
Member shall meet during a period of the next 30 calendar days to discuss
the reasons for such Budget Deadlock and to consider solutions to resolve such
Budget Deadlock.  If the Board approves
the proposed Budget (with or without modifications and pursuant to Section 4.5(a))
during such 30-day period, then such proposed Budget (with such modifications
as may have been so approved by the Board) will become the Budget for the next
one-year period covered thereby, subject to the right of the Board to make
further modifications thereto.  If no
resolution can be reached within such 30-day period, then the Budget for the
immediately preceding year shall, by default, remain in effect for such year,
subject to any other subsequent determination by the Board pursuant to a Majority
Director Vote; provided that, if any Founding Member provides notice as
set forth in Section 9.1, then such Founding Member shall have the right
to withdraw from the Company as a Member in accordance with Section 9.1.

 

4.6          Officers.

 

(a)           The Board may, from time to time,
designate one or more officers of the Company (“Officers”) with such titles as may be designated by the
Board to act in the name of the Company with such authority under Section 4.1
and as may be delegated to such Officer by the Board.  All Officers shall be subject to the
supervision and direction of the Board. 
The authority, duties or responsibilities of any Officer may be
suspended and/or employment of any Officer terminated by the Board with or
without Cause pursuant to a Majority Director Vote.

 

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

 

23

 

perform such duties and have
such powers as are appropriate and as prescribed by the Board or the CEO (the “Senior Officers”).  Each Senior Officer may be appointed or have
his or her employment with the Company terminated at will (subject to the terms
of any employment agreement between the Company and such Senior Officer) by the
Board or any Senior Officer acting pursuant to authority granted to such Senior
Officer by the Board.  All appointments
of Senior Officers must be approved by the Board.

 

(c)           Each Officer shall discharge his or
her duty as an Officer in a manner he or she reasonably believes to be in the
best interests of the Company.  Each
Officer shall, in the performance of his or her duties, be fully protected in
relying in good faith upon the records of the Company and upon such
information, opinions, reports or statements presented to such Officer by any
Person (including, without limitation, legal counsel and public accountants) as
to matters that such Officer reasonably believes are within such Person’s
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Board.

 

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

 

4.8          Budget.  On or before January 15th of each year,
the CEO shall submit to the Board a proposed Budget for the one-year period
commencing on January lst of such
year.  Within 30 days after the
submission to the Board of any proposed Budget, the Board shall advise the CEO
whether it approves or is unable to approve such proposed Budget and the
modifications, if any, agreed upon by the Board.  If the Board approves a proposed Budget (with
or without modifications and pursuant to Section 4.5(a)) for the next
Fiscal Year, then such proposed Budget (with such modifications as may have
been so approved by the Board) will become the Budget for the next one-year
period covered thereby, subject to the right of the Board to make further
modifications thereto.  If such proposed
Budget (with or without modifications) is not so approved by the Board, then,
subject to Section 4.5, the Board shall request the CEO to prepare an
alternative proposed Budget in accordance with such further instructions the
Board may determine, and thereafter the CEO shall submit such alternative
Budget to the Board.  Until such time as
any such alternative Budget is approved by the Board, the Budget for the
previous year shall remain in effect for such year.

 

4.9          Limitation of Liability;
Exculpation.

 

(a)           Except to the extent set forth in
Sections 4.9(b) or 5.4, no Member nor any of its Subsidiaries or
Affiliates (including any stockholder of REG, Marquee Holdings or Cinemark that
would be deemed an Affiliate but for the exception set forth in subsections
(iii), (iv) or (v) 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, nor any
Director or Officer (individually, an “Indemnitee”),
shall be liable to the Company or any Member for any act or omission by such
Indemnitee in connection with the conduct of the affairs of the 

 

24

 

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 Member or its Subsidiaries
or Affiliates and (y) the Company or another Member or their Subsidiaries
or Affiliates.

 

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

 

(c)           Notwithstanding any other provision
of this Agreement or otherwise applicable provision of law, whenever in this
Agreement a Director, Officer or Member is permitted or required to take any
action or to make a decision (i) in its “sole discretion” or “discretion,”
with “complete discretion” or under a grant of similar authority or latitude,
such Director, Officer or Member shall be entitled to consider, and make its
determination based upon, 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 Director, Officer or Member shall act
under such express standard and shall not be subject to any other or different
standards.

 

(d)           Any Director, Officer, Liquidator or
Member 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 Director, Officer,
Liquidator and Member 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 Director, Officer, Liquidator or Member, or employee of
the Company, or committees of the Company or Members, or by any other Person
(including, without limitation, legal counsel and public accountants) as to
matters that the Director, Officer, Liquidator or Member 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.

 

4.10        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, 

 

25

 

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 Member, Officer or Director or any
action taken by any Member, Officer or Director or under this Agreement or
otherwise on behalf of the Company (collectively, “Liabilities”), regardless of whether
the Indemnitee continues to be an Officer, a Director, a Member, or an
Affiliate, officer, director, employee, trustee, member or partner or agent of
a Member, 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 or constitute 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 or constituted gross negligence or willful misconduct.

 

(b)           Expenses.  Expenses incurred by an Indemnitee in
defending against any Liability or potential Liability subject to this Section 4.10
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 Board 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 4.10.

 

(c)           Indemnification Rights
Non-Exclusive; Rights of Indemnified Parties.  The indemnification provided by this Section 4.10
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 4.10
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 Board
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.

 

4.11        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 

 

26

 

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 Members have made pre-Closing
Date Capital Contributions to the Company in exchange for Units in the amounts
specified as their respective pre-Closing Date Capital Contributions on Exhibit A.  Except as provided in this Section 5.1,
no Member shall be required to make any other Capital Contribution to, or
provide credit support for, the Company.

 

(b)           On the Closing Date, subject to the
obligations of the Company under the Equity Contribution Agreement and the
Kasima Parent Holdings LLC Agreement, each Member shall make a Capital
Contribution to the Company, comprised of Cash and Equipment in the amounts
specified on Exhibit A.

 

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

 

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

 

27

 

Contribution Amount”).  Each Member may make a Capital Contribution
in an amount up to the amount calculated as such Member’s Projected Optional
Capital Contribution Amount, and, if it elects to make such a Capital
Contribution, the Member shall make such Capital Contribution no later than
noon, New York time, on the Business Day prior to the “Capital Contribution
Date” set forth on such Optional Funding Notice.  Any Member
may elect to fund less than 100% of the amounts described in any such Optional
Funding Notice if it has determined that it will not during the applicable
period be able or willing to fund 100% of the Capital Contribution required to
permit the Company to enter binding purchase orders or installation orders
relating to the Equipment listed on
such Member’s schedule to such Optional Funding Notice (i.e., that Equipment
expected to be installed during such period pursuant to an Installation Agreement to which the Member (or one
or more of its Affiliates) is a party).  To the
extent that any Member does not timely fund
100% of such amounts, the Company will instruct all designees on the
board of directors or comparable managing body of its Subsidiaries to cause
such Subsidiaries not to enter into binding
purchase orders or installation orders in relation to such unfunded Equipment
purchases and installations.  The Company
shall also instruct all designees on the board of directors or
comparable managing body of its Subsidiaries to cause such Subsidiaries to apply such funded amounts only to the Equipment
specified by such partially funding Member.

 

(e)           In
addition to the foregoing Capital Contributions, to the extent that the Company
does not then have the requisite financial resources to perform its managerial
and ministerial performance obligations under the Management Services
Agreements during the current and succeeding fiscal quarter, pursuant to the
performance guarantee of the Exhibitors set forth in such Management Services
Agreements, the Members shall make Capital Contributions to the Company that in
the aggregate equal the amount actually required to enable the Company to
perform such obligations during the current and succeeding fiscal quarter.  Each Member shall fund a pro rata portion of
such aggregate Capital Contribution that is equal to the number of Digital
Systems deployed in such Member’s Screens divided by the number of Digital
Systems deployed in all Members’ Screens as of the end of month preceding the
time that the Capital Contribution is required. 
The Company shall give each Member a written notice of any Capital
Contribution required pursuant to this Section 5.1(e) and each Member
shall fund such Capital Contribution within five (5) Business Days of the
delivery of such notice.

 

(f)            In
addition to the foregoing Capital Contributions, to the extent that the Company
desires to make additional capital contributions to Kasima Parent Holdings LLC,
each Member may elect to make additional Capital Contributions to the Company
to fund such additional capital contributions to Kasima Parent Holdings LLC.

 

(g)           Subject to Section 10.3
of this Agreement, the Company agrees to provide to each Member such additional
information with respect to each such Funding Notice as such Member may
reasonably request.  For the avoidance of
doubt, no Member shall be permitted to receive or review any schedule to any
Funding Notice that pertains to the Capital Contributions to be made by any
other Member.

 

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

 

28

 

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

 

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

 

5.2          Loans from Members.  Loans by Members to the Company shall not be
considered contributions to the capital of the Company hereunder.  Any loan made by a Member 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 Board.

 

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 Board 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          Non-Funding Member.

 

(a)           If any Member does not make any
portion of a Capital Contribution under Sections 5.1(b), (c) or (e) of
this Agreement, then such Member will be deemed to be a “Non-Funding Member”.  The Company shall promptly provide written
notice of the absence of such Capital Contribution to such Non-Funding Member
and to the other Members.  If such
Non-Funding Member does not make such Capital Contribution within ten (10) Business
Days after receipt of such notice, the Board, excluding Directors designated by
the Non-Funding Member, in its sole discretion based on a Majority Director
Vote shall have the right to take all or any of the following actions, in
addition to any other actions that may be available at law or in equity:

 

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

 

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

 

(iii)          determine that any Director designated
by such Member shall not have the right to notice of or to attend and vote at
meetings of the Board or upon actions to be 

 

29

 

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

 

(iv)          assess a reduction in the number of
all Units and the Capital Account balance of the Non-Funding Member in amounts
representing a proportional amount of the Capital Contributions that such
Non-Funding Member has not made pursuant to Sections 5.1(b), (c) or (e) of
this Agreement;

 

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

 

(vi)          offer to Members who are not
Non-Funding Members the opportunity to purchase, at fair market value as
determined by the Board in accordance with Section 5.6, a pro rata portion
of the Units representing a proportional amount of the Capital Contributions
that such Non-Funding Member has failed to make.

 

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

 

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

 

(a)           Sole Discretion of the Board.  Except as expressly provided in this
Agreement, (i) the Company shall have no obligation to distribute any Cash
or other property of the Company to the Members, (ii) the Company shall
have no obligation to liquidate assets to generate Cash balances for
distribution to the Members, (iii) Cash balances shall not include any
Capital Contribution pursuant to Section 5.1, (iv) the Board 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 (v) no Member is entitled to
receive any distribution unless and until declared by the Board.  All distributions under this Section 5.5(a) shall
be made among the Members pro rata in accordance with their then applicable
relative Percentage Interests.

 

(b)           In the event that Capital
Contributions are made pursuant to Section 5.1 with respect to Excess
Costs expected to be incurred but which Excess Costs ultimately are not
incurred, the Company shall cause Kasima Parent Holdings LLC to cause all such
Capital Contributions that it receives as distributions from Kasima Holdings
LLC to be distributed to the Company and the Company shall distribute such
Capital Contributions to the Member or 

 

30

 

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

 

(c)           Distributions in Kind.  No Member has any right to demand or receive
property other than Cash.  However, the
Board 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 its valuation determined in accordance with Section 5.6.

 

(d)           Limitations on Distributions.  Notwithstanding anything in this Agreement to
the contrary:

 

(i)            no distribution shall be made in
violation of the LLC Act; and

 

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

 

(e)           Exculpation.  The Members hereby consent and agree that,
except as expressly provided herein or required by applicable law and 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.

 

5.6          Valuation.  All valuation determinations to be made under
this Agreement shall be made pursuant to the terms of this Section 5.6,
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 Board, which may include an independent appraisal, a
reasonable estimate by the Board 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 5.6 shall be determined by an independent appraiser selected
by the Board if so requested by any Founding Member.

 

ARTICLE 6

 

BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS;
ALLOCATIONS

 

6.1          General Accounting Matters.

 

(a)           The Net Profits, Net Loss and/or
other Tax Items of the Company shall be allocated for federal income tax and
applicable state and local income tax purposes pursuant to the provisions of
the Allocations Exhibit, and such allocations shall be made at the end of each
Fiscal Period, at such times as the Gross Asset Value of Company assets is
adjusted pursuant to Section 1.2 of the Allocations Exhibit and at
such other times as required by this Agreement.

 

31

 

(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 Board deems
appropriate.

 

(c)           The Board 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.

 

(d)           The Company shall maintain
separate books of account for the Company, kept on an accrual basis or as
otherwise provided by the Board 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
instruct all designees on the board of directors or comparable managing body of
its Subsidiaries to cause such 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 Founding 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 Founding 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) in the possession of the Company and its
Subsidiaries, if any, as may reasonably be requested in order to enable such
Founding 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
Founding 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 “tax matters partner” for
purposes of Section 6231(a)(7) of the Code shall be AMC (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.  The Tax Matters Member shall not take any
action contemplated by Sections 

 

32

 

6222 through 6231 of the Code without approval of the Board in accordance
with Section 4.5(r).  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.  The Tax Matters Member shall
take such action as may be reasonably necessary to constitute each of the other
Members as a “notice partner” within the meaning of Section 6231(a)(8) of
the Code, provided, that the other Members provide the Tax Matters Member with
the information that is necessary to take such action.

 

6.3          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 Board; provided that the Company shall make the election to
amortize organizational expenses pursuant to Section 709 of the Code and
the regulations promulgated thereunder.

 

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

 

6.5          Withholding Requirements.  Notwithstanding any provision
herein to the contrary, the Board is authorized to take any and all actions
that it determines to be necessary or appropriate to insure 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 Board 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 Board 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
Board to the satisfaction of the Board that such Member is not subject to such
withholding and tax payment obligation. 
In the event that the Board 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.

 

6.6          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 25 days after
the end of each Fiscal Period of each Fiscal Year of the Company, 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:

 

33

 

(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

 

(v)           a cash flow statement.

 

(c)           Within 40 days after
the end of each Fiscal Year of the Company, 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 hereby consents
to the filing by any Member of the Company’s financial statements with the
Securities and Exchange Commission to the extent such financial statements are
required pursuant to the Securities and Exchange Commission’s Regulation S-X.

 

(e)           The Company shall provide
each Member with monthly “flash reports” when and in such form as determined by
the Board.

 

(f)            With reasonable promptness,
the Board will deliver such other information available to the Board, 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.

 

6.7          Auditors.  The auditors of the Company shall be selected
by the Board in their reasonable discretion.

 

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

 

34

 

6.9          Code Section 754 Election.  If requested by a Member, the
Company shall make the election provided for under Section 754 of the
Code.  Any costs incurred by the Company
in implementing such election at the request of any Member shall be promptly
reimbursed to the Company by the requesting Member.

 

6.10        Tax Classification.  The Members intend that the
Company be classified as a partnership for federal, state and local income tax
purposes and shall take all reasonable actions as may be reasonably required to
qualify for and receive such classification.

 

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 Units to dissolve the Company; or

 

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

 

provided that the
Company may not be dissolved pursuant to clause (a)(i) prior to the
termination of the Transaction Documents.

 

(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 or the LLC Act (including Section 18-304
thereof), the bankruptcy 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 Board
or by a liquidating trustee as may be appointed by the Board (the Board or such
liquidating trustee, as the case may be, the “Liquidator”).  If the Founding 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 

 

35

 

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 reasonably
practicable following the event that caused the dissolution of the Company, the
assets of the Company shall be distributed 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;

 

(iii)          to make any distribution of
the kind described in Section 5.5(b) with respect to distributions
received from Kasima Parent Holdings LLC with respect to Excess Costs that are
ultimately not incurred; and

 

(iv)          to distribute the remaining
assets of the Company pro rata to the Members in accordance with their
respective positive Capital Account balances, determined after all allocations
of Net Profit and Net Loss and all other items of income, gain, loss and
deduction have been made.

 

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 excess deficit, and such excess deficit shall not be
considered a debt owed to the Company or to any other Person for any purpose
whatsoever.

 

(b)           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.

 

(c)           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 Members in the manner provided for in this Agreement,
and (ii) the Certificate shall have been canceled in the manner required
by the LLC Act.

 

36

 

ARTICLE 8

 

TRANSFER; SUBSTITUTION; ADJUSTMENTS

 

8.1          Restrictions on Transfer.

 

(a)           It is a condition to any
Transfer otherwise permitted hereunder that the transferee assumes by operation
of law or by written instrument satisfactory to the Company pursuant to Section 8.l(b)(x) below
all of the obligations of the transferor Member under this Agreement and any
other agreement with the Company to which such transferor Member is a party
with respect to such Transferred Units, and no such Transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Member are assumed by a successor by operation of
law) shall relieve the transferor Member (the “Transferring Member”) of its obligations under this
Agreement without the approval of the Board in accordance with Section 4.5(t),
in its absolute discretion. 
Notwithstanding the foregoing, any transferee of any Transferred Units
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 Transferring
Member 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 by any Member made in the following events shall be void ab initio
(unless, in the case of the restriction set forth in Section 8.1(b)(vi) below,
such Transfer is otherwise approved by the Board):

 

(i)            to any Person who lacks 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;

 

(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 be treated as a “publicly traded partnership,” as such term
is defined in Sections 469(k)(2) or 7704(b) of the Code;

 

37

 

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

 

(vii)         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;

 

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

 

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

 

(x)            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 Board (in its
sole and absolute discretion), or the assignee otherwise assumes by operation
of law all of the obligations of the transferor Member under this Agreement and
any other agreement with the Company to which such transferor Member is a party
with respect to such Transferred Units.

 

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 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
operation of law or 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 being Transferred.

 

(b)           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 transferred thereto.  The admission of any transferee as a Member
shall be subject to the provisions of Section 3.1.

 

8.3          Transfers to Permitted Transferees.

 

(a)           Notwithstanding anything
contained herein to the contrary, each Member may Transfer any or all of its
Units to such Member’s Permitted Transferees if each such Permitted Transferee
agrees by delivery to the Company of an acknowledgment to become a party to,
and be bound by the terms of, this Agreement to the same extent as the
applicable transferor.

 

(b)           If any Member wishes
pursuant to this Section 8.3 to Transfer Units to any Permitted
Transferee, such Member shall give written notice to the other parties hereto
of its intention to make a Transfer permitted under this Section 8.3 not
less than three Business Days prior to effecting such Transfer, which notice
shall state the name and address of any Permitted Transferee to whom such
Transfer is proposed to be made and the number of Units proposed to 

 

38

 

be Transferred to any
Permitted Transferee.  Upon such
Transfer, the Transferring Member shall remain a party to this Agreement and
undertakes to the other Members hereto to procure the performance by its
Permitted Transferees of their obligations pursuant to the provisions of this
Agreement and to indemnify the other Members hereto from and against the breach
by any such Permitted Transferee of any of its obligations under this
Agreement, unless otherwise released by the approval of the Board in accordance
with Section 4.5(t), in its absolute discretion.

 

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

 

(i)            the relevant Transferring
Member shall forthwith notify the other parties hereto of the pending
occurrence of such Unwinding Event; and

 

(ii)           prior to such Unwinding
Event, such Transferring Member shall take all actions necessary to effect a
Transfer of all Units held by the relevant Permitted Transferee either back to
such Transferring Member or, pursuant to this Section 8.3, to a qualifying
Permitted Transferee of such Transferring Member.

 

8.4          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.

 

8.5          Third Party Transferee.  In connection with any Transfer
of Units by a Founding Member to any third party, other than a Permitted
Transferee (a “Third Party Transferee”), such Third Party Transferee shall be
bound by but not enjoy the benefits of this Agreement, except to the extent
that such Third Party Transferee becomes a substituted Member in accordance
with the provisions of Section 8.2 above (including compliance with the
provisions of Section 8.6 below).

 

8.6          Rights of First Offer.

 

(a)           If a Member (the “Selling Member”) intends to Transfer
any Units (other than pursuant to Section 8.3), the Selling Member shall first
give written notice (a “Seller’s Notice”)
to the Company and all of the Founding Members (other than the Selling Member)
(the “Offeree Members”),
stating the Selling Member’s intention to make such Transfer, the number of
Units to be Transferred (the “Offered
Units”), the name and address of the proposed Third Party
Transferee, the proposed price (which must be payable in Cash or marketable
securities that have a value that is readily determinable) which the Selling
Member proposes to accept for the Offered Units (the “Offer Price”) and the other material
terms upon which such Transfer is proposed, including, a copy of any offers
received (if available and permitted pursuant to the terms thereof).

 

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

 

39

 

Units at the Offer Price
payable in Cash and on terms no less favorable to the Offeree Members than
those proposed by a Third Party Transferee. 
The option of the Company under this Section 8.6(b) shall be
exercisable by written notice (a “Response
Notice”) to the Selling Member and the Offeree Members given
within 30 Business Days from receipt of the Seller’s Notice.  If the Company does not deliver a Response
Notice within the required period then the Company shall be deemed to have
elected not to exercise its option to purchase the Offered Units pursuant to
this Section 8.6(b).

 

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

 

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

 

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

 

40

 

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

 

(g)           If one or more of the
Offeree Members effectively exercises its right of Offer hereunder, the closing
of the purchase by the applicable Offeree Member of the Offered Units with
respect to which such right has been exercised shall take place on the fifth
Business Day after the later of (i) the date that such Offeree Member gave
notice of such exercise and (ii) the expiration of such time as the
Offeree Member may reasonably require in order to comply with applicable laws
and regulations.  Upon exercise by any
Offeree Member of its right of Offer under this Section 8.6, such Offeree
Member and the Selling Member shall be legally obligated to consummate the
purchase contemplated thereby and shall use their reasonable efforts to secure
any approvals required, to comply as soon as reasonably practicable with all
applicable laws and regulations, and to take all such other actions and to
execute such additional documents as are necessary or appropriate in connection
therewith.  At such closing, the Selling
Member shall Transfer the Offered Units free and clear of any liens and
encumbrances and together with all rights attached thereto at the date of
Transfer, including any distribution declared but not paid in respect thereof
and with all requisite transfer taxes, if any, paid, and the Offeree Member
shall deliver payment in full for such Offered Units as provided in the
applicable Response Notice or Secondary Response Notice.

 

ARTICLE 9

 

WITHDRAWAL OF MEMBER

 

9.1          Withdrawal of a Founding Member.  Pursuant to Section 4.5 a
Founding Member shall have the right to withdraw from the Company in the event
of a Budget Deadlock.  In the event a
Founding Member has a right to withdraw from the Company, if such Founding
Member provides a notice of withdrawal (a “Withdrawal Notice”) to the Board no
earlier than May 1st and no later than May 15th of the year in question, such
withdrawal shall be effective on the first anniversary of the delivery of the
Withdrawal Notice.  Within 30 days after
the effective date of withdrawal, the Company shall distribute to such Founding
Member its Capital Account balance on the effective date of withdrawal, taking
into account all adjustments to Capital Accounts required under this Agreement
through the date of distribution; provided that, (i) in the event the difference
between such Capital Account balance and such Founding Member’s proportional
share of the Company’s aggregate Cash balance on the effective date of
withdrawal (which shall be determined pursuant to the formula in Section 5.5(a))
is positive, then the Company shall withhold from such distribution, as a
penalty for early withdrawal, such amount, and (ii) in the event the
difference between such Capital Account balance and such Founding Member’s
proportional share of the Company’s aggregate Cash balance on the effective
date of withdrawal (which shall be determined pursuant to the formula in Section 5.5(a))
is zero or negative, then such Founding Member shall receive its proportional
share of such Cash balance.

 

41

 

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

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1        Agreement to Cooperate; Further
Assurances.  In case at
any time any further action is necessary or desirable to make any of the
contributions provided for by Article 5 (including obtaining any
third-party consents) or otherwise to carry out the purposes of this Agreement,
the proper Officers and Directors 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 herewith or with applicable law.

 

10.2        Amendments.  Except as otherwise expressly provided in
this Agreement, 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
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 Founding
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) Section 4.5
and Article 8 may only be amended with the approval of the Board in
accordance with Section 4.5(u) 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 

 

42

 

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); provided,
however, that each Member recognizes and agrees that the Company may and shall
disclose certain Confidential Information, including certain Member
Information, to third parties pursuant to and to the extent required by
Transaction Documents to which the Company and its Subsidiaries are party.

 

(d)           Member Information shall not be
supplied by the Company (and the Company shall instruct all designees to the
board of directors of its Subsidiaries not to supply any such information) to
any Person who is not an employee of the Company, including any employee of a
Member or any Director who is not an employee of the Company.  Notwithstanding the foregoing, (i) 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 applicable Founding Member(s) and (ii) the
Company may and shall disclose certain Member Information, to third parties
(including investors in or creditors of Subsidiaries and counterparties to
Transaction Documents to which the Company or its Subsidiaries are party)
pursuant to and to the extent required by Transaction Documents to which the
Company and its Subsidiaries are party. 
Member Information disclosed by any Member to the Company shall not be
shared with any other Member 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.

 

43

 

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.  Any written notice required or permitted to
be delivered pursuant to this Agreement shall be in writing and shall be deemed
delivered:  (a) upon delivery if
delivered in person; (b) upon transmission if sent via telecopier, with
electronic confirmation of receipt; (c) one Business Day after deposit
with a nationally recognized courier service, provided that confirmation of
such overnight delivery is received by the sender; and (d) upon
transmission if sent via e-mail, with a confirmation copy sent via telecopier
on the same day with electronic confirmation of receipt.  Notices to the 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.  Either
party may change its address for notices by giving written notice of the new
address to the other party in accordance with this Section, but any element of
such party’s address that is not newly provided in such notice shall be deemed
not to have changed.

 

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 or thereto other than those expressly set forth herein or
therein.  Except as expressly set forth
herein and therein, this Agreement, together with the 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.

 

44

 

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;

 

(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 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 the State of Delaware or 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 

 

45

 

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.

 

46

 

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 M. Connor

  
	
   

  	
   

  	
  Name:

  	
  Kevin M. Connor

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CINEMARK MEDIA, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Cavalier

  
	
   

  	
   

  	
  Name:

  	
  Michael Cavalier

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President-General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REGAL/DCIP HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amy E. Miles

  
	
   

  	
   

  	
  Name:

  	
  Amy E. Miles

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

[Signature
Page to DCIP LLC Agreement]

 

 

Exhibit A

 

Members,
Units and Certain Capital Contributions

 

	
  Names and Addresses

  	
   

  	
  Pre-Closing

  Date Units

  	
   

  	
  Pre-Closing Date

  Capital

  Contributions

  	
   

  	
  Closing
  Date

  Capital

  Contribution

  	
   

  	
  Total Units

  (including

  Closing Date

  Units)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMC Founding Member:

  American Multi-Cinema, Inc.

  920 Main Street

  Kansas City, MO 64105

  Attention: Frank Rash, Senior Vice President

  Telecopy: (816) 480-4619

  Telephone: (816) 480-2521

  Email: frash@amctheatres.com

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cinemark Founding Member:

  Cinemark Media, Inc.

  3900 Dallas Parkway, Suite 500

  Plano, TX 75093

  Attention: Robert Copple, Chief Financial Officer

  Telecopy: (972) 665-1003

  Telephone: (972) 665-1116

  Email: rcopple@cinemark.com

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Regal Founding Member:

  Regal/DCIP Holdings, LLC

  7132 Regal Lane

  Knoxville, TN 37918

  Attention: Amy Miles

  Telecopy: (865) 922-6085

  Telephone: (865) 925-9422

  Email: amy.miles@regalcinemas.com

  	
   

  	
  [* * *]

  	
   

  	
  [* * *]

  	
   

  	
  Cash: $28,079,935

  
 Equipment: $12,688,565

  
 Total: $40,768,500

  	
   

  	
  [* * *]

  

 

[* * *]      Certain confidential
information contained in this document, marked by three asterisks, has been
omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934, as amended.

 

A-1

 

Exhibit B

 

ALLOCATIONS EXHIBIT

 

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

 

1.             Capital Accounts.

 

1.1.          Establishment and
Maintenance of Capital Accounts. 
The Company shall establish and maintain for each Member a separate
account (“Capital Account”) in accordance
with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv) and
this Allocations Exhibit.  The Capital
Account of each Member shall be increased by (i) the amount of cash or the
Gross Asset Value of any property contributed (or deemed contributed) by a
Member to the Company (net of liabilities secured by the property or to which
the property is subject) pursuant to the Agreement, (ii) the amount of Net
Profits allocated to such Member pursuant to this Allocations Exhibit, and (iii) the
amount of any other items of income or gain specially allocated to such Member
pursuant to this Allocations Exhibit. 
The Capital Account of each Member shall be decreased by (x) the
amount of cash or Gross Asset Value (net of liabilities secured by the property
or to which the property is subject) of any distributions of cash or property
made to such Member pursuant to the Agreement, (y) the amount of Net Loss
allocated to such Member pursuant to this Allocations Exhibit, and (z) the
amount of any other items of deduction or loss specially allocated to such
Member pursuant to this Allocations Exhibit. 
The Capital Accounts of each Member shall be increased or decreased to
reflect the revaluation of Company assets under Section 1.2 of this
Allocations Exhibit.

 

1.2.          Revaluations of Company
Assets.

 

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

 

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

 

B-1

 

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

 

(iii)          In
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e) the
Gross Asset Value of Company assets distributed in kind shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Company assets, as of the time any such asset is
distributed.

 

(iv)          In
determining Unrealized Gain or Unrealized Loss for purposes of this Allocations
Exhibit, the aggregate cash amount and fair market value of all Company assets
(including cash or cash equivalents) shall be determined by the Board using
such reasonable method of valuation as it may adopt, or in the case of a
liquidating distribution pursuant to Article 7 of the Agreement, be
determined and allocated by the Board using such reasonable methods of
valuation as it may adopt.  The Board
shall allocate such aggregate value among the assets of the Company (in such
manner as it may determine in its sole and absolute discretion to arrive at a
fair market value for individual properties).

 

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

 

2.             Allocation of Net Profit
and Net Loss.

 

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

 

2.2.          Substantial Economic
Effect.  The allocation
provisions contained in this Allocations Exhibit are intended to comply
with Code Section 704(b) and the Treasury Regulations promulgated
thereunder.

 

B-2

 

3.             Special Allocations.  Notwithstanding any other provision of the
Agreement or this Allocations Exhibit, the following special allocations shall
be made in the following order:

 

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

 

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

 

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

 

3.4.          Gross Income Allocation.  If any Member would otherwise have an
Adjusted Capital Account Deficit as of the last day of any Fiscal Year (or
other applicable period), individual items of income and gain of the Company
shall be specifically allocated to such Member (in the manner specified in Section 3.3
of this Allocations Exhibit) so as to eliminate such deficit as quickly as
possible.

 

3.5.          Limitations on Net Loss
Allocations.  With respect to
any Member, notwithstanding the provisions of Section 2.1, the
amount of Net Losses for any Fiscal Year (or 

 

B-3

 

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

 

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

 

3.7.          Partner Nonrecourse
Deductions.  Any Partner
Nonrecourse Deductions for any Fiscal Year (or other applicable period) shall
be specially allocated to the Member who bears the economic risk of loss, under
Treasury Regulation Section 1.704-2(i)(1), with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Treasury Regulation Section 1.704-2(i)(2).

 

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

 

3.9.          Curative Allocations.  The foregoing allocations set forth in this Article 3
(the “Regulatory Allocations”) are
intended to comply with certain requirements of Treasury Regulation Sections
1.704-1(b) and 1.704-2.  Notwithstanding
any provisions of this Allocations Exhibit to the contrary (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into account
in allocating other items of income, gain, loss and deduction among the Members
so that, to the extent possible, the cumulative net amount for the allocations
of Company items under the other Articles hereof shall be equal to the net
amount that would have been allocated had the Regulatory Allocations not
occurred.  This Section 3.9 is intended
to minimize to the extent possible and to the extent necessary any economic
distortions which may result from application of the Regulatory Allocations and
shall be interpreted in a manner consistent therewith.

 

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

 

3.11.        Non-Funding Member.  In the event that the Capital Account
balances of the Members are adjusted to take account of a Non-Funding Member
pursuant to Section 5.4(a)(v) of the Agreement, Net Profits
and Net Loss, and individual items of Company income, gain, loss and deduction,
shall be specially allocated to the Members to reflect the adjustment
contemplated by Section 5.4(a)(v) of the Agreement.

 

B-4

 

3.12         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 2.1, the deduction
attributable to such payment shall be specially allocated to such Member.

 

4.             Allocations for Tax
Purposes.

 

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

 

4.2.          Sections 1245/1250
Recapture.  If any portion of
gain from the sale of property is treated as gain which is ordinary income by
virtue of the application of Code Sections 1245 or 1250 (“Affected
Gain”), then (A) such Affected Gain shall be allocated
among the Members in the same proportion that the depreciation and amortization
deductions giving rise to the Affected Gain were allocated and (B) other
Tax Items of gain of the same character that would have been recognized, but
for the application of Code Sections 1245 and/or 1250, shall be allocated away
from that Member who is allocated Affected Gain pursuant to clause (A) so
that, to the extent possible, the other Member is allocated the same amount and
type, of capital gain that would have been allocated to it had Code Sections
1245 and/or 1250 not applied.  For
purposes hereof, in order to determine the proportionate allocations of
depreciation and amortization deductions for each Fiscal Year (or other
applicable period), such deductions shall be deemed allocated on the same basis
as Net Profit and Net Loss for such Fiscal Year (or other applicable period).

 

4.3.          Tax
Allocations:  Code Section 704(c).  In accordance with Code Section 704(c) and
the Treasury Regulations promulgated thereunder, income, gain, loss and
deduction with respect to any asset contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Members so as to take
account of any variation between the adjusted basis of such asset to the
Company for federal income tax purposes and its initial Gross Asset Value.  In the event the Gross Asset Value of any
Company asset is adjusted pursuant to this Allocations Exhibit, subsequent
allocations of income, gain, loss and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset to
the Company for federal income tax purposes and its Gross Asset Value in the
same manner as under Code Section 704(c) and the Treasury Regulations
promulgated thereunder.  Any elections or
other decisions relating to such allocations shall be made by the Board in any
manner that reasonably reflects the purpose and intention of this Agreement,
provided that any items of loss or deduction attributable to property
contributed by a Member shall, to the extent of an amount equal to the excess
of (A) the federal income tax basis of such asset at the time of its
contribution over (B) the Gross Asset Value of such asset at such time, be
allocated in its entirety to such contributing Member and the tax basis of such
asset for purposes of computing the amounts of all items allocated to any other
Member (including a transferee of the contributing Member) shall be equal to
its Gross Asset Value upon its contribution to the Company. Allocations
pursuant to this Section 4.3 are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into
account in computing, any Member’s Capital Account or share of Net Profits, Net
Loss, other items, or distributions pursuant to any provision of this
Agreement.

 

B-5

 

5.             Excess
Nonrecourse Liabilities.

 

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

 

6.             Definitions.

 

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

 

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

 

(ii)           Debit to such
Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) of the Treasury
Regulations.

 

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

 

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

 

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

 

6.4.          “Code” means
the Internal Revenue Code of 1986, as amended from time to time.

 

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

 

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

 

B-6

 

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

 

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

 

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

 

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

 

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

 

(i)            The computation of
all items of income, gain, loss and deduction shall be made without regard to
the fact that items described in Sections 705(a)(1)(B) or 705(a)(2)(B) of
the Code are not includable in gross income or are neither currently deductible
nor capitalized for federal income tax purposes;

 

(ii)           Any income, gain or
loss attributable to the taxable disposition of any Company asset shall be
determined as if the adjusted basis of such asset as of such date of
disposition were equal in amount to the Company’s Gross Asset Value with
respect to such asset as of such date;

 

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

 

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

 

(v)           Any items specially
allocated under Article 3 of this Allocations Exhibit shall
not be taken into account.

 

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

 

B-7

 

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

 

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

 

6.12.        “Partner Nonrecourse
Deductions” shall have the meaning set forth in Section 1.704-2(i)(1) of
the Treasury Regulations.

 

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

 

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

 

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

 

6.16         “Treasury Regulations”
means the federal income tax regulations, including any temporary regulations,
promulgated under the Code, as such Treasury Regulations may be amended 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.

 

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

 

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

 

B-8Exhibit 10.1

 

FIRST AMENDMENT TO LEASE

 

This
First Amendment to Lease (“First Amendment”) is entered into this 24th day of February, 2010 (the “First Amendment
Effective Date”), by and between OCC, LLC, a Delaware LLC (“Landlord”) and
CardioNet, Inc., a Delaware Corporation (“Tenant”).

 

RECITALS

 

WHEREAS,
HI/OCC, Inc. and PDSHeart, Inc. executed a Lease Agreement in or
about September, 2006 (“Lease”) for certain premises at the building commonly
known as One Corporate Center I, 7401 Metro Boulevard, Edina, Minnesota, 55439
(“Building”);

 

WHEREAS,
Landlord is the successor-in-interest to HI/OCC, Inc.;

 

WHEREAS,
Tenant is the successor-in-interest to PDSHeart, Inc.;

 

WHEREAS,
Landlord and Tenant now desire to modify and supplement the Lease by extending
the Lease Term, expanding the Premises and modifying certain other terms of the
Lease;

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

 

1.                                       Interpretation
of Amendment.  The Lease is
hereby modified and supplemented as of the First Amendment Effective Date.  Wherever there exists a conflict between this
First Amendment and the Lease, the provisions of this First Amendment shall
control.  Unless otherwise indicated, defined
terms shall have the definition set forth in the Lease.  Except as modified and supplemented herein,
the Lease is in full force and effect.

 

2.                                       Extension of
Lease Term. Landlord and Tenant agree to end the existing
Lease Term and commence a new Lease Term of approximately sixty (60) months
commencing on March 15, 2010 (the “First Amendment Commencement Date”) and
continuing through and including March 31, 2015 (the “First Amendment
Expiration Date”).  The period commencing
on the First Amendment Commencement Date and continuing through and including
the First Amendment Expiration Date is hereinafter referred to as the “New Term”.  If the New Premises is not ready for
occupancy by the First Amendment Commencement Date, in Landlord’s reasonable
determination, then the First Amendment Commencement Date shall be postponed
until the New Premises is ready for occupancy in Landlord’s reasonable
determination.

 

3.                                       Assignment of
Tenancy.  The parties acknowledge that
Tenant has succeeded PDSHeart, Inc. as tenant under the Lease.  Tenant agrees to be bound by all the
obligations ascribed to the tenant pursuant thereto.

 

1

 

4.                                       New Premises.  Effective as of the First Amendment
Commencement Date, the Premises is hereby relocated that portion of the fourth
(4th) floor of the
Building commonly known as Suite 460, which is collectively deemed to
contain 2,035 rentable square feet (the “New Premises”).

 

5.                                       Basic Rent.  Basic Rent payable for the New Premises
throughout the New Term shall be as follows:

 

	
  Period

  	
   

  	
  Basic Rent

  Per RSF Per Year

  	
   

  	
  Basic Rent

  Per Year

  	
   

  	
  Basic Rent

  Per Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 1 – 4

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Months 5 – 12

  	
   

  	
  $

  	
  11.15

  	
   

  	
  22,690.25

  	
   

  	
  $

  	
  1,890.85

  	
   

  
	
  Months
  13 – 16

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Months
  17 – 24

  	
   

  	
  $

  	
  11.65

  	
   

  	
  $

  	
  23,707.75

  	
   

  	
  $

  	
  1,975.65

  	
   

  
	
  Months
  25 – 36

  	
   

  	
  $

  	
  12.15

  	
   

  	
  $

  	
  24,725.25

  	
   

  	
  $

  	
  2,060.44

  	
   

  
	
  Months
  37 – 48

  	
   

  	
  $

  	
  12.65

  	
   

  	
  $

  	
  25,742.75

  	
   

  	
  $

  	
  2,145.23

  	
   

  
	
  Months
  49 – 60

  	
   

  	
  $

  	
  13.15

  	
   

  	
  $

  	
  26,760.25

  	
   

  	
  $

  	
  2,230.02

  	
   

  

 

6.                                       Additional Rent.  Throughout the New Term, in
addition to Basic Rent, Tenant shall pay to Landlord, as Additional Rent, (i) an
amount equal to Tenant’s Proportionate Share of Operating Costs, as that term
is defined in the Lease (including all taxes), and (ii) all other amounts
owed to Landlord as Additional Rent under the Lease.  The 2010 estimate is $2.43/SF for real estate
taxes and $6.40/SF for operating expenses.

 

a.               Conversion to Net Lease.  Effective as of the First Amendment
Commencement Date, the parties desire to convert the Lease to a net lease, and therefore
to modify the Lease to reflect that the Basic Rent no longer includes any
amounts owed by Tenant as Additional Rent.

 

b.              Estimated Payments.  Within thirty (30) days after the end of each
calendar year, Landlord shall provide Tenant with an estimate of Tenant’s
monthly Additional Rent obligation for the upcoming calendar year.  Tenant shall pay such estimated Additional
Rent in addition to Tenant’s monthly Basic Rent payments.  Within one hundred twenty (120) days
following the close of each calendar year, Landlord shall provide Tenant with a
statement showing, in reasonable detail, all computations of Additional Rent
due under this Section.  If the statement
shows that the total of the monthly payments made by Tenant exceeds the amount
of Additional Rent due by Tenant under this Section, then the statement shall
be accompanies by a credit to Tenant’s account. 
If the statement shows that the total of the monthly payments made by
Tenant is less than the amount of Additional Rent due by Tenant under this
Section, then Tenant shall immediately pay to Landlord the amount shown on the
statement as owing to Landlord.

 

2

 

c.               Controllable Costs.  Increases in Operating Costs shall not exceed
Five Percent (5%) for each year of the Lease for Controllable Costs (as defined
below), but there shall be no cap on Uncontrollable Costs.

 

i.                  “Uncontrollable Costs” is
defined to mean costs associated with water/sewer expenses, utility services,
taxes, insurance premiums, maintenance and repairs, cleaning of the Common
Areas, trash collection, landscaping, and snow removal.

 

ii.               “Controllable Costs” is
defined to mean all Operating Costs except Uncontrollable Costs.

 

7.                                       Tenant
Improvements.  Landlord
shall provide, at its expense using building standard materials, certain
improvements to the New Premises described by the plan(s)/bid(s) (the “Tenant
Improvements”).  Landlord shall retain
contractors of its choosing to construct the Tenant Improvements.  Landlord, its agents, contractors and
employees, shall have the ongoing, unfettered right to supervise and or manage
all Tenant Improvements constructed within the New Premises.  If Tenant elects to make changes to the
Tenant Improvements, then all such changes must be first approved in writing by
Landlord, and done pursuant to Section 8 of the Lease.  Tenant agrees that all additional planning
and/or construction costs arising from any such election will be Tenant’s sole
responsibility, and Tenant shall immediately pay (or reimburse to Landlord) all
such costs upon demand.  Tenant shall
cooperate with Landlord in obtaining lien waivers for the total amounts for all
work performed within the New Premises. 
Tenant acknowledges that all prior improvements, construction allowances
or other allowances to have been provided by Landlord under the Lease have been
provided in full.

 

8.                                       Option to
Terminate.  So long as
Tenant is not in default, Tenant shall have the one-time option to terminate
the Lease and this First Amendment after the forty-eighth (48th) month of the New
Term.  In the event Tenant elects to
exercise said option, Tenant agrees to provide to Landlord not less than six (6) months
prior written notice to Landlord and to concurrently pay a termination fee
equal to one (1) month of Tenant’s gross rent at the time notice is given
(includes both Basic Rent and Additional Rent). 
If Tenant is in default at the time notice is given, then such notice
will not be valid and this Option to Terminate will be of no further force or
effect.

 

3

 

9.                                       Tenant’s
Proportionate Share.  The Lease
is hereby modified so that all references to “Tenant’s Proportionate Share” is
redefined to be a fraction, with the number of square feet of rentable area in
the New Premises as the numerator and the total number of square feet of
rentable area in the Building as the denominator.  Tenant’s Proportionate Share is currently
estimated to be 1.83% and may be recalculated from time to time by Landlord if
the number of square feet of rentable area in the Premises or Building changes,
including, without limitation, due to Landlord’s decision to combine the
Building’s operating budget with other buildings in the Complex.

 

10.                                 Existing
Furniture and IT Relocation.  Provided Tenant is not in default, Landlord
shall be responsible and shall bear the cost to relocate of all of Tenant’s
furniture from the Original Premises to the New Premises.  Landlord shall also be responsible for the
cost of installing comparable data and telephone lines into the New Premises.

 

11.                                 Confidentiality.  Tenant agrees to treat the terms and
conditions of the Lease or this First Amendment as the confidential,
proprietary information of Landlord. 
Tenant covenants not to disclose, release, distribute, discuss or
otherwise share this information with anyone except Tenant’s independent
accountants, attorneys and other professional advisors (who must agree to also
keep this information confidential), and otherwise only to the extent required
by any law or court order.  If Tenant
breaches this covenant, Landlord may seek equitable relief from any court of
competent jurisdiction, and may receive recovery for any monetary damages
suffered by Landlord as a result of Tenant’s breach.

 

12.                                 Options
Superseded.  All Tenant
options described in the Lease (including, but not limited to, Section 26
of the Lease) are superseded by this First Amendment and are of no further
force or effect.

 

13.                                 Notices.  The Basic Lease Information of the Lease is
hereby revised so that the Landlord’s and Tenant’s address for all notices
delivered pursuant to the Lease or this First Amendment shall be as follows:

 

	
  Landlord’s
  Address:

  	
  Tenant’s
  Address:

  
	
  OCC,
  LLC

  	
  CardioNet, Inc.

  
	
  c/o
  Hempel Properties

  	
  227
  Washington Street

  
	
  527
  Marquette Avenue

  	
  Conshohocken,
  PA 19428

  
	
  Minneapolis,
  MN 55402

  	
  Attn:
  Sr. VP of Operations with a copy to Legal

  
	
  Attn: Jon Hempel

  	
   

  

 

4

 

14.                                 Brokers.  Tenant represents and warrants to Landlord
that it has not dealt with any broker in connection with this First Amendment
except for Cresa Partners.  Tenant hereby
indemnifies and holds Landlord harmless from any and all losses, liability,
costs or expenses (including attorney fees) incurred as a result of an alleged
breach of the foregoing warranty.  Tenant
warrants that all prior brokerage fees to have been paid under the Lease have
been paid in full.

 

15.                                 Entire
Agreement.  This First
Amendment sets forth the entire agreement with respect to the matters set forth
herein.  There have been no additional
oral or written representations or agreements. 
No modification, supplementation or amendment to the Lease or this First
Amendment shall be effective unless made by written agreement between Landlord
and Tenant.

 

16.                                 Counterparts.  This First Amendment may be executed in any
number of counterparts, any one of which shall be an original, but all of which
together shall be one and the same instrument.

 

17.                                 Choice of Law.  The Lease and this First Amendment shall be
governed by the laws of the State of Minnesota.

 

[signature
page follows]

 

5

 

IN WITNESS WHEREOF, this
First Amendment is executed effective as of the First Amendment Effective Date.

 

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  OCC,
  LLC,

  	
   

  	
  CardioNet, Inc.,

  
	
   

  	
   

  	
   

  
	
  a
  Delaware limited liability company.

  	
   

  	
  a
  Delaware corporation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print:

  	
   

  	
   

  	
  Print:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

6

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