(a) AMC, Regal and Cinemark were previously admitted as Members to the Company subject to the
Second Amended Agreement. Upon the execution of this Agreement,
NCM Inc. shall be admitted to the Company as a Member. Following the Common Unit Purchase and
Over-Allotment Unit Purchase, each Person named as a Member on Exhibit A hereto on the date
hereof shall be deemed to own the number of Common Units and Preferred Units specified in
(c) One or more additional Persons may be admitted as a Member of the Company only upon (i) an
issuance of Units pursuant to Section 3.4(f) or 3.5 or a Transfer of Units pursuant to Article 8,
and (ii) the execution and delivery by such Person of a counterpart to this Agreement or other
written agreement, in a form satisfactory to the Manager, to be bound by all the terms and
conditions of this Agreement. Upon such execution, the Company shall amend Exhibit A and
shall amend this Agreement as the Manager may reasonably determine is necessary, to reflect the
admission of such Person as a Member and such other information of such Person as indicated in
Exhibit A. Unless admitted to the Company as a Member as provided in this Section 3.1 or
Section 8.2, no Person is, or will be considered to be, a Member.
(d) Subject to the other provisions of this Section 3.1 and Section 8.2, each Person that
holds one or more Units in compliance with the terms of this Agreement shall be a Member. A Member
will cease to be a Member when such Person ceases to own any Units in the Company, in which case
Exhibit A shall be amended to reflect that such Person is no longer a Member.
(e) Except as provided in the LLC Act, in no event shall any Member (or any former Member), by
reason of its status as a Member (or former Member), have any liability for (i) the debts, duties
or any other obligations of the Company, (ii) the repayment of any Capital Contribution of any
other Member or (iii) any act or omission of any other Member.
Company at the same time, such
Founding Member and transferees shall designate one of them to act on behalf of all of them and
vote all of their Common Units with respect to any matter requiring approval of the Founding
the event NCM Inc.
issues, transfers from treasury stock or repurchases NCM Inc. common stock in a transaction not
contemplated in this Agreement, the Manager shall have the authority to take all actions such that,
after giving effect to all such issuances, transfers or repurchases, the number of outstanding
Common Units owned by NCM Inc. will equal on a one-for-one basis the number of outstanding shares
of NCM Inc. common stock. In the event NCM Inc. issues, transfers from treasury stock or
repurchases NCM Inc. preferred stock in a transaction not contemplated in this Agreement, the
Manager shall have the authority to take all actions such that, after giving effect to all such
issuances, transfers or repurchases, NCM Inc. holds mirror
equity interests in the Company which (in the good faith determination by the Manager) are in
the aggregate substantially equivalent to the outstanding NCM Inc. preferred stock. The Company
shall not undertake any subdivision (by any Unit split, Unit distribution, reclassification,
recapitalization or similar event) or combination (by reverse Unit split, reclassification,
recapitalization or similar event) of the Units that is not accompanied by an identical subdivision
or combination of the NCM Inc. common stock to maintain at all times a one-to-one ratio between the
number of Common Units owned by NCM Inc. and the number of outstanding shares of NCM Inc. common
stock, unless such action is necessary to maintain at all times a one-to-one ratio between the
number of Common Units owned by NCM Inc. and the number of outstanding shares of NCM Inc. common
stock as contemplated by the first sentence of this Section 3.4(g).
connection with the issuance of
additional Common Units and admission of additional Members under this Section 3.5.
(i) In connection with the exercise of Options, NCM Inc. shall have the right to acquire
additional Common Units from the Company. NCM Inc. shall exercise its rights under this Section
3.5(c)(i) by giving written notice (the Equity Compensation Notice) to the Company and
all Members following exercise of the Options. The Equity Compensation Notice shall specify the
net number of shares of NCM Inc. common stock issued by NCM Inc. pursuant to exercise of the
Options. The Company shall issue the Common Units to which NCM Inc. is entitled under Section
3.5(c)(i) within three (3) Business Days after delivery of the Equity Compensation Notice (to be
effective immediately prior to the close of business on such date). The number of additional
Common Units that NCM Inc. shall be entitled to receive under this Section 3.5(c)(i) shall be equal
to the net number of shares of NCM Inc. common stock issued by NCM Inc. pursuant to the exercise of
the Options. The net number of shares of NCM Inc. common stock issued by NCM Inc. pursuant to
exercise of the Options shall be equal to (i) the number of shares of NCM Inc. common stock with
respect to which the Options were exercised, less (ii) any shares of NCM Inc. common stock
transferred to or withheld by NCM Inc. (e.g., in connection with a stock swap or otherwise) in
satisfaction of the exercise price or taxes payable as a result of the exercise of the Options. In
consideration of the Common Units issued by the Company to NCM Inc. under this Section 3.5(c)(i),
NCM Inc. shall contribute to the Company the cash consideration, if any, received by NCM Inc. in
exchange for the net shares of NCM Inc. common stock issued pursuant to exercise of the Options.
NCM Inc. shall contribute any cash consideration to which the Company is entitled under this
Section 3.5(c)(i) on the same date (and to be effective as of the same time) that the Company
issues the Common Units to NCM Inc.
interests, such insurance as the Manager believes is warranted for the operations being conducted.
4.11 Transactions Between Company and Manager. The Manager may cause the Company to contract
and deal with the Manager, or any Affiliate of the Manager, provided such contracts and dealings
are on terms comparable to and competitive with those available to the
Company from others dealing at arms length or are approved by a Majority Member Vote. The Members
hereby approve the Common Unit Adjustment Agreement, the Exhibitor Services Agreements, the Loews
Agreement, the Management Services Agreement, the Software License Agreement, the Senior Credit
Facility, the Subscription Agreement and the Tax Receivable Agreement.
(a) The Manager may, from time to time, designate one or more Persons to fill one or more
officer positions of the Company. Any officers so designated shall have such titles and authority
and perform such duties as the Manager may, from time to time, delegate to them. If the title
given to a particular officer is one commonly used for officers of a business corporation, the
assignment of such title shall constitute the delegation to such officer of the authority and
duties that are normally associated with that office, subject to any specific delegation of
authority and duties made to such officer, or restrictions placed thereon, by the Manager. Each
officer shall hold office until his or her successor is duly designated, until his or her death or
until he or she resigns or is removed in the manner hereinafter provided. Any number of offices
may be held by the same Person. The salaries or other compensation, if any, of the officers of the
Company shall be fixed from time to time by the Manager.
(b) Any officer of the Company may resign at any time by giving written notice thereof to the
Manager. Any officer may be removed, either with or without cause, by the Manager whenever in its
judgment the best interests of the Company will be served thereby; provided,
however, that such removal shall be without prejudice to the contract rights, if any, of
the Person so removed. Designation of an officer shall not, by itself, create contract rights.
4.13 Management Fee; Reimbursement of Expenses. Except as provided in the Management Services
Agreement, the Manager shall not be entitled to compensation for performance of its duties
hereunder unless such compensation has been approved by a Majority Member Vote. The Manager shall
be reimbursed by the Company for any reasonable out-of-pocket expenses incurred on behalf of the
4.14 Limitation of Liability; Exculpation.
(a) No Manager, Member or officer of the Company, nor any of their respective Subsidiaries or
Affiliates (including any stockholder of REG, Marquee Holdings, Cinemark or NCM Inc. that would be
deemed an Affiliate but for the exception set forth in subsections (iii), (iv), (v) or (vi) of the
definition of Affiliate herein, or any of such stockholders Affiliates) nor any of their
respective direct or indirect officers, directors, trustees, members, partners, equity holders,
employees or agents, nor any of their heirs, executors, successors and assigns (individually, an
), shall be liable to the Company or any Member for any
act or omission by such
Indemnitee in connection with the conduct of affairs of the Company or otherwise incurred in
connection with the Company or this Agreement or the matters contemplated herein, in each case
unless such act or omission was the result of gross negligence or willful misconduct or constitutes
a breach of, or a failure to comply with, any agreement between (x) such Indemnitee and (y) the
Company or its Subsidiaries and Affiliates.
(b) Notwithstanding any other provision of this Agreement or otherwise applicable provision of
law or equity, whenever in this Agreement a Manager, Member or officer of the Company is permitted
or required to make a decision (i) in its sole discretion or discretion, with complete
discretion or under a grant of similar authority or latitude, such Manager, Member or officer
shall be entitled to consider only such interests and factors as it desires, including its own
interests, and shall, to the fullest extent permitted by applicable law, have no duty or obligation
to give any consideration to any interest of or factors affecting the Company or the Members, or
(ii) in its good faith or under another expressed standard, such Manager, Member or officer shall
act under such express standard and shall not be subject to any other or different standards.
(c) Any Manager, Member, Liquidator or officer of the Company may consult with legal counsel
and accountants selected by it at its expense or with legal counsel and accountants for the Company
at the Companys expense. Each Manager, Member, Liquidator and officer of the Company shall be
fully protected in relying in good faith upon the records of the Company and upon information,
opinions, reports, or statements presented by another Manager, Member, Liquidator or officer, or
employee of the Company, or committees of the Company, Manager or Members, or by any other Person
(including, without limitation, legal counsel and public accountants) as to matters that the
Manager, Member, Liquidator or officer reasonably believes are within such other Persons
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.
(a) Indemnification Rights
. The Company shall indemnify and hold harmless each
Indemnitee from and against any and all losses, claims, demands, costs, damages, liabilities,
expenses of any nature (including attorneys fees and disbursements), judgments, fines, settlements
(whether on an individual or joint and several basis) and other amounts arising from any and all
claims, demands, actions, suits or proceedings, whether civil, criminal, administrative, arbitral
or investigative, in which the Indemnitee was involved or may be involved, or threatened to be
involved, as a party or otherwise, arising out of or in connection with the business of the
Company, this Agreement, any Persons status as a Manager, Member or officer of the Company or any
action taken by any Manager, Member or officer of the Company or under this Agreement or otherwise
on behalf of the Company (collectively, Liabilities
), regardless of whether the
Indemnitee continues to be a Manager, Member or officer of the Company, or an Affiliate, officer,
director, employee, trustee, member or partner or agent of a
Manager, Member or officer of the
Company, to the fullest extent permitted by the LLC Act and all other applicable laws;
provided that an Indemnitee shall be entitled to indemnification hereunder only to the
extent that such Indemnitees conduct did not result from gross negligence or willful misconduct.
The termination of any proceeding by settlement, judgment, order, conviction, or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a
presumption that such Indemnitees conduct resulted from gross negligence or willful
(b) Expenses. Expenses incurred by an Indemnitee in defending against any Liability
or potential Liability subject to this Section 4.15 shall, from time to time, be advanced by the
Company prior to the final disposition of such Liability upon receipt by the Company of an
undertaking reasonably acceptable in form and substance to the Manager by or on behalf of the
Indemnitee to repay such amount if it shall be determined that such Person is not entitled to be
indemnified as authorized in this Section 4.15.
(c) Indemnification Rights Non-Exclusive; Rights of Indemnified Parties. The
indemnification provided by this Section 4.15 shall be in addition to any other rights to which
those indemnified may be entitled under any agreement, by a Majority Member Vote, as a matter of
law or equity, or otherwise. Such indemnification shall continue with respect to an Indemnitee
even though it has ceased to serve in any particular capacity and shall inure to the benefit of its
heirs, executors, successors, assigns and other legal representatives.
(d) Assets of the Company. Any indemnification under this Section 4.15 shall be
satisfied solely out of the assets of the Company, and no Member shall be subject to personal
liability or required to fund or cause to be funded any obligation by reason of these
(e) Other Liability Insurance. The Company may purchase and maintain insurance, at
the Companys expense, on behalf of such Persons as the Manager shall reasonably determine, against
any liability that may be asserted against, or any expense that may be incurred by, such Person in
connection with the activities of the Company and its Subsidiaries or Affiliates regardless of
whether the Company would have the obligation to indemnify such Person against such liability under
the provisions of this Agreement.
4.16 Title to Assets. Unless specifically licensed or leased to the Company, title to the
assets of the Company, whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Company as an entity, and no Members, individually or collectively, shall
have any ownership interest in such assets (other than licensed or leased assets) or any portion
CAPITAL CONTRIBUTIONS; DISTRIBUTIONS
5.1 Capital Contributions.
(a) The AMC Founding Member, as the successor to NCN, and the Regal Founding Member have made
their required Capital Contributions to the Company as set forth in
the Contribution and Unit
Holders Agreement, Cinemark Media has made its required Capital Contribution to the Company as set
forth in the Contribution Agreement and NCM Inc. has made its required Capital Contribution to the
Company as set forth in the Subscription Agreement. Except as provided in Sections 3.5(b), 3.5(c),
5.1(b) and otherwise in this Agreement, no Member shall be required to make any other capital contribution
to, or provide credit support for, the Company.
(b) In addition to the Capital Contributions that NCM Inc. has made as provided in Section
5.1(a), NCM Inc. shall make the following additional Capital Contributions to the Company:
(i) On or before the due date of the Companys obligation to make a payment under Section
3.02(a) of the Tax Receivable Agreement, NCM Inc. shall contribute to the Company an amount equal
to any ESA-Related Tax Benefit Payment; and
(ii) On or before the due date of the Companys obligation to make a payment under Section
3.02(b) of the Tax Receivable Agreement, NCM Inc. shall contribute to the Company an amount equal
to any increase in any ESA-Related Tax Benefit Payment.
(c) Except as provided in Article 9 of this Agreement, no Member shall be entitled to
withdraw, or demand the return of, any part its Capital Contributions or Capital Account. No
Member shall be entitled to interest on or with respect to any Capital Contribution or Capital
(d) Except as otherwise provided in this Agreement, no Person shall have any preemptive,
preferential or similar right to subscribe for or to acquire any Units.
5.2 Loans from Members. Loans by Members to the Company shall not be considered contributions
to the capital of the Company hereunder. If any Member shall advance funds to the Company in
excess of the amounts required to be contributed to the capital of the Company, the making of such
advances shall not result in any increase in the amount of the Capital Account of such Member and
shall be payable or collectible in accordance with the terms and conditions upon which advances are
made; provided that the terms of any such loan shall not be less favorable to the Company,
taken as a whole, than would be available to the Company from unrelated lenders and such loan shall
be approved by the Manager (or a Majority Member Vote in the event the Manager is making the loan
to the Company).
5.3 Loans from Third Parties. The Company may incur Indebtedness, or enter into other similar
credit, guarantee, financing or refinancing arrangements for any purpose with any Person upon such
terms as the Manager determines appropriate; provided that the Company shall not incur any
Indebtedness that is recourse to any Member, except to the extent otherwise agreed to in writing by
the applicable Member in its sole discretion.
Distributions. Except as provided in
Section 3.5(c)(ii), all distributions made by the Company, if any, shall be made in accordance with this Section 5.4.
(a) Nonliquidating Distributions. The Manager will cause the Company to make
distributions of the Distribution Amount in the following manner:
(i) Within 60 calendar days following the last day of each Fiscal Period (or the next Business
Day if the 60th calendar day is not a Business Day), the Company shall make a
distribution in an amount equal to the Distribution Amount for such Fiscal Period.
(ii) Except as provided in Section 5.4(b), all distributions shall be made among the Members
pro rata in accordance with their Percentage Interests; provided that if (i) the Company is
in default under any Funded Indebtedness, (ii) the distribution would cause the Company to default
under any Funded Indebtedness, or (iii) restrictions imposed on the Companys funds pursuant to any
Funded Indebtedness, cause (x) the product of the Distribution Amount times NCM Inc.s
Percentage interest, to be less than the sum of (y) the product of the Tax Distribution Amount
times NCM Inc.s Percentage Interest, plus the Tax Receivable Distribution Amount,
then the Company shall distribute the Tax Distribution Amount among the Members pro rata in
accordance with their Percentage Interests and distribute the Tax Receivable Distribution Amount to
(iii) The Company shall determine Available Cash (i) for each Fiscal Period, and (ii) for each
Fiscal Year (the Distribution Year) in connection with the preparation of the audited
report delivered to the Members for the Distribution Year, as provided in Section 6.9(c). To the
extent Available Cash for the Distribution Year is greater than the total Distribution Amount
distributed to the Members under Section 5.4(a)(i) with respect to the four Fiscal Periods in such
Distribution Year (the Distribution Increase), the Distribution Increase will be added to
Available Cash for the second Fiscal Period in the Fiscal Year following the Distribution Year. To
the extent Available Cash for the Distribution Year is less than the total Distribution Amount
distributed to the Members under Section 5.4(a)(i) with respect to the four Fiscal Periods in such
Distribution Year (the Distribution Decrease), the Distribution Decrease will be
subtracted from Available Cash for the second Fiscal Period in the Fiscal Year following the
Distribution Year. Any Distribution Increase or Distribution Decrease provided for in this Section
5.4(a)(iii) shall be taken into account in the distributions made to the Members under Section
5.4(a)(i) following the last day of the second Fiscal Period in the Fiscal Year following the
(iv) Within three (3) Business days of receiving or being deemed to receive any ESA-Related
Payment from an ESA Party pursuant to Sections 3.02 or 5.03 of the Tax Receivable Agreement, the
Company shall distribute such ESA-Related Payment to NCM Inc.
(b) Liquidating Distributions. All distributions made in connection with the sale,
exchange or other disposition of all or substantially all of the Companys assets, or with respect
to the winding up and liquidation of the Company, shall be made among the Members pro rata in
accordance with their Percentage Interests.
(c) Sole Discretion of the Manager. Except as specified in Sections 3.4(e),
3.5(c)(ii), 4.3, 5.4(a), 5.4(b), 7.3 or 9.1(a), (i) the Company shall have no obligation to
distribute any cash or other property of the Company to the Members, (ii) the Manager shall have
sole discretion in determining whether to distribute any cash or other property of the Company,
when available, and in determining the timing, kind and amount of any and all distributions, and
(iii) no Member is entitled to receive any distribution unless and until declared by the Manager.
(d) Distributions in Kind. No Member has any right to demand or receive property
other than cash. However, the Manager may, in its sole discretion, elect to make distributions,
entirely or in part, in property of the Company other than cash. Property
distributed in kind shall be deemed to have been sold for their valuation determined in
accordance with Section 5.5.
(e) Limitations on Distributions. Notwithstanding anything in this Agreement to the
contrary, no distribution shall be made in violation of the LLC Act.
(f) Exculpation. The Members hereby consent and agree that, except as expressly
provided herein or required by applicable law and except for distributions not made in compliance
with this Agreement, no Member shall have an obligation to return cash or other property paid or
distributed to such Member by the Company, whether such obligation would have arisen under §
18-502(b) of the LLC Act or otherwise.
5.5 Valuation. All valuation determinations to be made under this Agreement shall be made
pursuant to the terms of this Section, which determinations shall be conclusive and binding on the
Company, all Members, former Members, their successors, assigns, legal representatives and any
other Person, except for computational errors or fraud, and to the fullest extent permitted by law,
no such Person shall have the right to an accounting or an appraisal of the assets of the Company
or any successor thereto except for computational errors or fraud. Valuations shall be determined
by a reasonable method of valuation determined by the Manager, which may include an independent
appraisal, a reasonable estimate by the Manager or some other reasonable method of valuation.
Distributions of property in kind shall be valued at fair market value; provided that any
valuation under this Section shall be determined by an independent appraiser selected by the
Manager if so requested by any Founding Member.
BOOKS AND RECORDS; TAX; CAPITAL ACCOUNTS; ALLOCATIONS
6.1 General Accounting Matters.
(a) Allocations of Net Income or Net Losses pursuant to Section 6.4 shall be made at the end
of each Fiscal Period, at such times as the Carrying Value of Company assets is adjusted pursuant
to the definition thereof and at such other times as required by this Agreement.
(b) Each Member shall be supplied with the information of the Company necessary to enable such
Member to prepare in a timely manner (and in any event within 120 days after the end of the Company
Fiscal Year) its federal, state and local income tax returns and such other financial or other
statements and reports that the Manager deems appropriate.
(c) The Manager shall keep or cause to be kept books and records pertaining to the Companys
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 Companys books of account shall be kept on an accrual basis or as otherwise provided
by the Manager and otherwise in accordance with GAAP, except that for
income tax purposes such books shall be kept in accordance with applicable tax accounting
(e) The Company shall, and shall cause each of its Subsidiaries to, (i) maintain accurate
books and records reflecting its assets and liabilities and maintain proper and adequate internal
control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
promulgated under the Exchange Act, and as such rules may be amended and supplemented from time to
time); and (ii) deliver to any Member, immediately upon request, certifications and statements with
respect to the Company and its Subsidiaries satisfying the requirements of Rule 13a-l4(a) or
15d-14(a) under the Exchange Act, and 18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of
(f) Subject to the confidentiality provisions of this Agreement, the Company will permit
representatives of a Member and its Affiliates, at their expense, to obtain all books and accounts,
documents and other information (other than documents and information relating to pricing or other
proprietary information of any Member or its Affiliates collected pursuant to any Exhibitor
Services Agreement) in the possession of the Company and its Subsidiaries, if any, as may
reasonably be requested in order to enable such Member to monitor its investment in the Company and
to exercise its rights under this Agreement and, to the extent applicable, to provide such other
access and information as may be reasonably required to enable such Member to account for the
investment in the Company and otherwise comply with the requirements of applicable laws, generally
accepted accounting principles and requirements of any Governmental Authority.
6.2 Certain Tax Matters. The Company shall make the TEFRA Election for all taxable years of
the Company. The tax matters partner for purposes of Section 6231(a)(7) of the Code shall be NCM
Inc. (the Tax Matters Member). The Tax Matters Member shall have all the rights, duties,
powers and obligations provided for in Sections 6221 through 6232 of the Code with respect to the
Company. The Tax Matters Member shall inform each other Member of all significant matters that may
come to its attention in its capacity as such by giving notice thereof within ten days after
becoming aware thereof and, within such time, shall forward to each other Member copies of all
significant written communications it may receive in such capacity. This provision is not intended
to authorize the Tax Matters Member to take any action left to the determination of an individual
Member under Sections 6222 through 6231 of the Code.
6.3 Capital Accounts.
(a) The Company shall maintain for each Member on the books of the Company a capital account
(a Capital Account). Each Members Capital Account shall be maintained in accordance
with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and the provisions of this
(b) The Capital Account of a Member shall be credited with the amount of all Capital
Contributions by such Member to the Company. The Capital Account of a Member shall
be increased by
the amount of any Net Income (or items of gross income) allocated to such Member pursuant to this
Article 6, and decreased by (i) the amount of any Net Losses (or items
of loss or deduction) allocated to such Member pursuant to this Article 6 and (ii) the amount
of any cash distributed to such Member and (iii) the fair market value of any asset distributed in
kind to such Member (net of all liabilities secured by such asset that such Member is considered to
assume or take subject to under Section 752 of the Code). The Capital Account of the Member also
shall be adjusted appropriately to reflect any other adjustment required pursuant to Treasury
Regulations Section 1.704-1 or 1.704-2.
(c) In the event that any Interest in the Company is Transferred, the transferee of such
Interest shall succeed to the portion of the transferors Capital Account attributable to such
(d) For purposes of this Article 6, the Manager may apply any reasonable convention in
determining the date during the same month on which any Member is admitted to the Company.
(a) General. Except as provided in Section 6.4(b) and as otherwise provided in this
Agreement, Net Income and Net Losses, and, to the extent necessary, individual items of Company
income, gain, loss and deduction, shall be allocated to the Members in such amounts, to the maximum
extent possible, to make the Adjusted Capital Account Balances of the Members (after the
application of this Section 6.4(a)) to be in proportion to the Members Percentage Interests.
(b) Special Allocations.
(i) Qualified Income Offset. If any Member receives an unexpected adjustment,
allocation, or distribution described in Section l.704-l(b)(2)(ii)(d)(4-6) of the Treasury
Regulations in any Fiscal Year or other period which would cause such Member to have a deficit
Adjusted Capital Account Balance as of the end of such Fiscal Year or other period, items of
Company income and gain (consisting of a pro rata portion of each item of Company income, including
gross income and gain) shall be specifically allocated to such Member in an amount and manner
sufficient to eliminate, to the extent required by the Treasury Regulations, the deficit in such
Members Adjusted Capital Account Balance as quickly as possible. This Section 6.4(b)(i) is
intended to comply with the qualified income offset provision in Section l.704-l(b)(2)(ii)(d) of
the Treasury Regulations and shall be interpreted consistently therewith.
(ii) Gross Income Allocation. If any Member would otherwise have a deficit Adjusted
Capital Account Balance as of the last day of any Fiscal Year or other period, individual items of
income and gain of the Company shall be specifically allocated to such Member (in the manner
specified in Section 6.4(b)(i)) so as to eliminate such deficit as quickly as possible.
(iii) Partnership Minimum Gain Chargeback
. If there is a net decrease in Partnership
Minimum Gain during a Fiscal Year or other period, each Member shall be
allocated items of Company
gross income and gain for such Fiscal Year or other period (and, if necessary, subsequent Fiscal
Years or periods) in proportion to, and to the extent of, such
Members share of such net decrease, except to the extent such allocation would not be
required by Section 1.704-2(f) of the Treasury Regulations. The amounts referred to in this
Section 6.4(b)(iii), and the items to be so allocated shall be determined in accordance with
Section 1.704-2 of the Treasury Regulations. This Section 6.4(b)(iii) is intended to constitute a
minimum gain chargeback provision as described in Section 1.704-2(f) or 1.704-2(j)(2) of the
Treasury Regulations and shall be interpreted consistently therewith.
(iv) Partner Nonrecourse Debt Minimum Gain Chargeback. If there is a net decrease in
Partner Nonrecourse Debt Minimum Gain during a Fiscal Year or other period, then each Member shall
be allocated items of Company gross income or gain equal to such Members share of such net
decrease, except to the extent such allocation would not be required under Section l.704-2(i)(4) or
1.704-2(j)(2) of the Treasury Regulations. The amounts referred to in this Section 6.4(b)(iv) and
the items to be so allocated shall be determined in accordance with Section 1.704-2 of the Treasury
Regulations. This Section 6.4(b)(iv) is intended to comply with the minimum gain chargeback
requirement contained in Section 1.704-2(i)(4) of the Treasury Regulations and shall be interpreted
(v) Limitations on Net Loss Allocations. With respect to any Member, notwithstanding
the provisions of Section 6.4(a), the amount of Net Losses for any Fiscal Year or other period that
would otherwise be allocated to a Member under Section 6.4(a) shall not cause or increase a deficit
Adjusted Capital Account Balance. Any Net Losses in excess of the limitation set forth in this
Section 6.4(b)(v) shall be allocated among the Members, pro rata, to the extent each, respectively,
is liable or exposed with respect to any debt or other obligations of the Company.
(vi) Partner Nonrecourse Deductions. Partner nonrecourse deductions (as described in
Section 1.704-2(i) of the Treasury Regulations) for any Fiscal Year or other period shall be
specifically allocated to the Members who bear the economic risk of loss with respect to Partner
Nonrecourse Debt to which such partner nonrecourse deductions are attributable in accordance with
Section 1.704-2(i)(1) of the Treasury Regulations.
(vii) Nonrecourse Deductions. Nonrecourse deductions (as described in Section
1.704-2(b) of the Treasury Regulations) for any Fiscal Year or other period shall be allocated to
the Founding Members in accordance with their relative Percentage Interests.
(viii) Excess Nonrecourse Liabilities. If the built-in gain in Company assets subject
to Nonrecourse Debts exceeds the gain described in Section 1.752-3(a)(2) of the Treasury
Regulations, the Excess Nonrecourse Liabilities shall be allocated (i) first, among the Founding
Members up to the amount of built-in gain that is allocable to the Founding Members on Section
704(c) Property, (ii) second, among the Members other than the Founding Members up to the amount of
built-in gain that is allocable to such other Members on Section 704(c) Property, and (iii) last,
any remaining Excess Nonrecourse Liabilities shall be allocated among the Members in accordance
with their relative Percentage Interests.
(ix) Ordering Rules. Anything contained in this Agreement to the contrary
notwithstanding, allocations for any Fiscal Period or other period of
nonrecourse deductions (as described in Section 1.704-2(b) of
the Treasury Regulations) or partner nonrecourse deductions (as described in Section 1.704-2(i) of the Treasury Regulations), or of
items required to be allocated pursuant to the minimum gain chargeback requirements contained in
Sections 6.4(b)(iii) and 6.4(b)(iv), shall be made before any other allocations hereunder.
(x) Special Allocation. If, for federal income tax purposes, the Company is deemed to
have made a deductible payment to a Member that is not actually paid, then notwithstanding Section
6.4(a), the deduction attributable to such payment shall be specially allocated to such Member.
(c) Curative Provisions. The allocations set forth in Section 6.4(b)(i)-(viii) (the
Regulatory Allocations) are intended to comply with certain requirements of Section
1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory Allocations may not be
consistent with the manner in which the Members intend to allocate Net Income and Net Losses or
make Company contributions. Accordingly, notwithstanding the other provisions of this Agreement,
but subject to the Regulatory Allocations, Members shall reallocate items of income, gain,
deductions and loss among the Members so as to eliminate the effect of the Regulatory Allocations
and thereby cause the respective Capital Accounts of the Members to be in the amounts (or as close
thereto as possible) they would have been if Net Income and Net Losses (and such other items of
income, gain, deduction and loss) had been allocated without reference to the Regulatory
Allocations. In general, the Members anticipate that this will be accomplished by specially
allocating other Net Income and Net Losses (and such other items of income, gain, deduction and
loss) among the Members so that the net amount of the Regulatory Allocations and such special
allocations to each such Member is zero. In addition, if in any Fiscal Year or other period there
is a decrease in Partnership Minimum Gain, or in Partner Nonrecourse Debt Minimum Gain, and
application of the minimum gain chargeback requirements set forth in this Section 6.4 would cause a
distortion in the economic arrangement among the Members, the Members may, if they do not expect
that the Company will have sufficient other income to correct such distortion, request the Internal
Revenue Service to waive either or both of such minimum gain chargeback requirements. If such
request is granted, this Agreement shall be applied in such instance as if it did not contain such
minimum gain chargeback requirements.
6.5 Allocations of Net Income and Net Losses for Federal Income Tax Purposes. The Companys
ordinary income and losses and capital gains and losses as determined for federal income tax
purposes (and each item of income, gain, loss or deduction entering into the computation thereof)
shall be allocated to the Members in the same proportions as the corresponding book items are
allocated pursuant to Section 6.4 of this Agreement. Notwithstanding the foregoing sentence,
federal income tax items relating to any Section 704(c) Property shall be allocated among the
Members in accordance with Section 704(c) of the Code and Treasury Regulations Section
1.704-1(b)(2)(iv)(g) to take into account the difference between the fair market value and the tax
basis of such Section 704(c) Property using any method approved by the Manager and prescribed under
Treasury Regulations corresponding to Section 704(c) of the Code. Items described in this Section
6.5 shall neither be credited nor charged to the Members Capital Accounts.
6.6 Elections. Except as otherwise expressly provided herein, all elections required or
permitted to be made by the Company under the Code or other applicable tax law, and all decisions
with respect to the calculation of its taxable income or tax loss under the Code or other
applicable tax law, shall be made in such manner as may be reasonably determined by the Manager;
provided that the Company shall make (i) the election to amortize organizational expenses
pursuant to Section 709 of the Code and the regulations promulgated thereunder, and (ii) the TEFRA
Election as provided in Section 6.2.
6.7 Tax Year. The taxable year of the Company shall be the same as its Fiscal Year.
6.8 Withholding Requirements. Notwithstanding any provision herein to the contrary, the
Manager is authorized to take any and all actions that it determines to be necessary or appropriate
to ensure that the Company satisfies any and all withholding and tax payment obligations under
Section 1441, 1445, 1446 or any other provision of the Code or other applicable law. Without
limiting the generality of the foregoing, the Manager may withhold from distributions the amount
that it determines is required to be withheld from the amount otherwise distributable to any Member
pursuant to Article 5; provided, however, that such amount shall be deemed to have
been distributed to such Member for purposes of applying Article 5 and this Article 6. The Manager
will not withhold any amounts from cash or other property distributable to any Member to satisfy
any withholding and tax payment obligations to the extent that such Member demonstrates to the
Managers satisfaction that such Member is not subject to such withholding and tax payment
obligation. In the event that the Manager withholds or pays tax in respect of any Member for any
period in excess of the amount of cash or other property otherwise distributable to such Member for
such period (or there is a determination by any taxing authority that the Company should have
withheld or paid any tax for any period in excess of the tax, if any, that it actually withheld or
paid for such period), such excess amount (or such additional amount) shall be treated as a
recourse loan to such Member that shall bear interest at the rate of ten percent per annum and be
payable on demand.
6.9 Reports to Members.
(a) The books of account and records of the Company shall be audited as of the end of each
Fiscal Year by the Companys independent public accountants.
(b) Within 60 calendar days after the end of each Fiscal Period of each Fiscal Year of the
Company (or the next Business Day if the 60th calendar day is not a Business Day), the
Company shall send to each Person who was a Member during such period an unaudited report setting
forth the following as of the end of such Fiscal Period:
(i) unless such Fiscal Period is the last Fiscal Period of the Fiscal Year, an unaudited
balance sheet as of the end of such period;
(ii) unless such Fiscal Period is the last Fiscal Period of the Fiscal Year, an unaudited
income statement of the Company for such period;
(iii) a statement of each Members Capital Account;
(iv) a summary of the Companys activities during such period; and
(v) a cash flow statement.
(c) Within 100 calendar days after the end of each Fiscal Year of the Company (or the next
Business Day if the 100th calendar day is not a Business Day), the Company shall send to
each Person who was a Member during such period an audited report setting forth the following as of
the end of such Fiscal Year:
(i) an audited balance sheet as of the end of such Fiscal Year;
(ii) an audited income statement of the Company for such Fiscal Year;
(iii) a statement of each Members Capital Account; and
(iv) a cash flow statement.
(d) The Company shall provide each Member with monthly flash reports.
(e) With reasonable promptness, the Manager will deliver such other information available to
the Manager, including financial statements and computations, as any Member may from time to time
reasonably request in order to comply with regulatory requirements, including reporting
requirements, to which such Member is subject.
6.10 Auditors. The auditors of the Company shall be Deloitte & Touche LLP, unless
otherwise determined by the Manager.
6.11 Transfers During Year. In order to avoid an interim closing of the Companys
books, the allocation of Net Income and Net Losses under this Article 6 between a Member who
Transfers part or all of its Interest in the Company during the Companys Fiscal Year and such
Members transferee, or to a Member whose Percentage Interest varies during the course of the
Companys Fiscal Year, may be determined pursuant to any method chosen by the Manager.
6.12 Code Section 754 Election. Pursuant to the Tax Receivable Agreement, the Company shall
make the election provided for under Code Section 754.
(a) The Company shall be dissolved and subsequently terminated upon the occurrence of the
first of the following events:
(i) the unanimous decision of the Members that then hold Common Units to dissolve the Company;
(ii) the entry of a decree of judicial dissolution of the Company pursuant to § 18-802 of the
LLC Act; or
(iii) the termination of the legal existence of the last remaining Member or the occurrence of
any other event that causes the last remaining Member to cease to be a Member of the Company,
unless the Company is continued without dissolution pursuant to Section 7.1(b).
(b) Upon the occurrence of any event that causes the last remaining Member of the Company to
cease to be a Member of the Company (other than upon continuation of the Company without
dissolution upon an assignment by the Member of all of its Interest in the Company and the
admission of the transferee as a Member pursuant to Section 8.2), to the fullest extent permitted
by law, the personal representative of such Member is hereby authorized to, and shall, within 90
days after the occurrence of the event that terminated the continued membership of such Member in
the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute Member of the
Company, effective as of the occurrence of the event that terminated the continued membership of
such Member in the Company.
(c) Notwithstanding any other provision of this Agreement, the bankruptcy (as defined in §§
18-101(1) and 18-304 of the LLC Act) of a Member shall not cause the Member to cease to be a Member
of the Company and upon the occurrence of such an event, the Company shall continue without
7.2 Winding-Up. When the Company is dissolved, the business and property of the Company shall
be wound up in an orderly manner by the Manager or by a liquidating trustee as may be appointed by
the Manager (the Manager or such liquidating trustee, as the case may be, the
Liquidator). If the Members are unable to agree with respect to the distribution of any
Company assets, then the Liquidator shall use its reasonable best efforts to reduce to cash and
Cash Equivalents such assets of the Company as the Liquidator shall deem it advisable to sell,
subject to obtaining fair market value for such assets and any tax or other legal considerations.
No Member shall take any action (with respect to the Company) that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Companys business and affairs.
7.3 Final Distribution.
(a) As soon as reasonable following the event that caused the dissolution of the Company, the
assets of the Company shall be applied in the following manner and order:
(i) to pay the expenses of the winding-up, liquidation and dissolution of the Company, and all
creditors of the Company, other than Members, either by actual payment or by making a reasonable
provision therefor, in the manner, and in the order of priority, set forth in § 18-804 of the LLC
(ii) to pay, in accordance with the provisions of this Agreement, on a pro rata basis, the
debts payable to all creditors of the Company that are Members, either by actual payment or by
making a reasonable provision therefor; and
(iii) to distribute the remaining assets of the Company to the Members in accordance with
Section 5.4(b), taking into account all adjustments to Capital Accounts or offsets required under
this Agreement through the date of distribution.
(b) If any Member has a deficit balance in its Capital Account in excess of any unpaid Capital
Contributions (if any), such Member shall have no obligation to make any Capital Contribution to
the Company with respect to such deficit, and such deficit shall not be considered a debt owed to
the Company or to any other Person for any purpose whatsoever.
(c) Each Member shall look solely to the assets of the Company for the amounts distributable
to it hereunder and shall have no right or power to demand or receive property therefor from any
(d) The Company shall terminate when (i) all of the assets of the Company, after payment of or
due provision for all debts, liabilities and obligations of the Company shall have been distributed
to the Member in the manner provided for in this Agreement, and (ii) the Certificate shall have
been canceled in the manner required by the LLC Act.
TRANSFER; SUBSTITUTION; ADJUSTMENTS
8.1 Restrictions on Transfer.
(a) Notwithstanding anything contained herein to the contrary, each Member may, subject to
Section 8.1(b), Transfer any or all of its Units. It is a condition to any Transfer by a Member
(the Transferring Member) otherwise permitted hereunder that the transferee (i) agrees to
become a party to, and be bound by the terms of, this Agreement to the same extent as the
Transferring Member, and (ii) assumes by operation of law or express agreement all of the
obligations of the Transferring Member under this Agreement or to which such Transferring Member is
a party with respect to such Transferred Units or other Equity Interests in the Company.
Notwithstanding the foregoing, any transferee of any Transferred Units or other Equity Interests in
the Company shall be subject to any and all ownership limitations contained in this Agreement or
any other agreement with the Company to which such Transferring Member is a party. Any transferee,
whether or not admitted as a Member, shall take subject to the obligations of the transferor
(b) In addition to any other restrictions on Transfer herein contained, including, without
limitation, the provisions of this Article 8, any purported Transfer or assignment of a Unit or
other Equity Interests in the Company by any Member made in the following events shall be void ab
(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 he treated as a
publicly traded partnership, as such term is defined in Sections 469(k)(2) or 7704(b) of the
(vi) if such Transfer subjects the Company to be regulated under the Investment Company Act of
1940, the Investment Advisors Act of 1940 or ERISA, each as amended;
(vii) if such Transfer may cause the Company to cease to be classified as a partnership for
federal or state income tax purposes;
(viii) if such Transfer violates any applicable laws; or
(ix) if the Company does not receive written instruments (including without limitation, copies
of any instruments of Transfer and such assignees consent to be bound by this Agreement as an
assignee) that are in a form satisfactory to the Manager (in its sole and absolute discretion).
8.2 Substituted Members.
(a) No Member shall have the right to substitute a transferee as a Member in his or her place
with respect to any Units or other Equity Interests in the Company so Transferred (including any
transferee permitted by Section 8.1) unless (i) such Transfer is made in compliance with the terms
of this Agreement and any other agreements with the Company or other Members to which such
transferor Member is a party and (ii) such transferee assumes, by written instrument satisfactory
to the Company pursuant to Section 8.l(b)(ix) above, all the rights and powers and is subject to
all the restrictions and liabilities that were applicable to the transferor by virtue of the
transferors ownership of the Units or other Equity Interests in the Company being Transferred.
(b) Except as provided in Section 8.2(c) and otherwise in this Agreement, a transferee who has
been admitted as a Member in accordance with Section 8.2(a) shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Member under this Agreement holding the
same Units or other Equity Interests in the Company. The admission of any transferee as a Member
shall be subject to the provisions of Section 3.1.
(c) In the event of a Transfer by a Founding Member, the transferee shall not have the rights
and powers of a Founding Member under this Agreement unless (i) the transferee is a Permitted
Transferee of the Founding Member prior to and following the Transfer, or (ii) in the case of a
direct or indirect Change of Control of the Founding Member, or any direct or indirect holder of
equity in the Founding Member, following the Change of Control the
Founding Members ESA Party or its stockholders owns 50% or more of the general voting power
of the transferee.
8.3 Effect of Void Transfers. No Transfer of any Units owned by a Member in violation hereof
shall be made or recorded on the books of the Company, and any such purported Transfer shall be
void and of no effect.
REDEMPTION RIGHT OF MEMBER
9.1 Redemption Right of a Member.
(a) Each Member (other than NCM Inc.) shall be entitled to cause the Company to redeem its
Common Units (the Redemption Right) from time to time. A Member desiring to exercise its
Redemption Right (the Redeeming Member) shall exercise such right by giving written
notice (the Redemption Notice) to the Company (with a copy to NCM Inc.). The Redemption
Notice shall specify the number of Common Units (the Redeemed Units) that the Redeeming
Member intends to have the Company redeem and a date, which is not less than seven (7) Business
Days nor more than 10 Business Days after delivery of the Redemption Notice, on which exercise of
the Redemption Right shall be completed (the Redemption Date). Unless the Redeeming
Member has timely delivered a Retraction Notice as provided in Section 9.1(b), on the Redemption
Date (to be effective immediately prior to the close of business on the Redemption Date) (i) the
Redeeming Member shall transfer and surrender the Redeemed Units to the Company, free and clear of
all liens and encumbrances, and (ii) the Company shall (x) cancel the Redeemed Units, (y) transfer
to the Redeeming Member the consideration to which the Redeeming Member is entitled under Section
9.1(b), and (z) issue to the Redeeming Member pursuant to Section 3.4(h) a certificate for a number
of Common Units equal to the difference (if any) between the number of Common Units evidenced by
the certificate surrendered by the Redeeming Member pursuant to clause (i) of this Section 9.1(a)
and the Redeemed Units.
(b) In exercising its Redemption Right, a Redeeming Member, at NCM Inc.s option as provided
in Section 3.5(b) and subject to Section 9.1(d), shall be entitled to receive the Share Settlement
or the Cash Settlement. Within three (3) Business Days of delivery of the Redemption Notice, NCM
Inc. shall give written notice (the Contribution Notice) to the Company (with a copy to
the Redeeming Member) of its intended settlement method; provided that if NCM Inc. does not
timely deliver a Contribution Notice, NCM Inc. shall be deemed to have elected the Share Settlement
method. If NCM Inc. elects the Cash Settlement method, the Redeeming Member may retract its
Redemption Notice by giving written notice (the Retraction Notice) to the Company (with a
copy to NCM Inc.) within two (2) Business Days of delivery of the Contribution Notice. The timely
delivery of a Retraction Notice shall terminate all of the Redeeming Members, Companys and NCM
Inc.s rights and obligations under this Section 9.1 arising from the Redemption Notice.
(c) The number of shares of NCM Inc. common stock and the Redeemed Units Equivalent that a
Redeeming Member is entitled to receive under Section 9.1(b) (whether
through a Share Settlement or Cash Settlement) shall not be adjusted on account of any
distributions previously made with respect to the Redeemed Units or dividends previously paid with
respect to NCM Inc. common stock; provided, however, that if a Redeeming Member
causes the Company to redeem Redeemed Units and the Redemption Date occurs subsequent to the record
date for any distribution with respect to the Redeemed Units but prior to payment of such
distribution, the Redeeming Member shall be entitled to receive such distribution with respect to
the Redeemed Units on the date that it is made notwithstanding that the Redeeming Member
transferred and surrendered the Redeemed Units to the Company prior to such date.
(d) In the event of a reclassification or other similar transaction as a result of which the
shares of NCM Inc. common stock are converted into another security, then in exercising it
Redemption Right a Redeeming Member shall be entitled to receive the amount of such security that
the Redeeming Member would have received if such Redemption Right had been exercised and the
Redemption Date had occurred immediately prior to the record date of such reclassification or other
(e) The provisions of this Section 9.1 and Section 3.5(b) shall be interpreted and applied in
a manner consistent with the corresponding provisions of NCM Inc.s certificate of incorporation.
9.2 Effect of Exercise of Redemption Right. This Agreement shall continue notwithstanding the
exercise of a Redeeming Members Redemption Right and all governance or other rights set forth
herein shall be exercised by the remaining Members and the Redeeming Member (to the extent of such
Redeeming Members remaining Interest in the Company). No exercise of a Redeeming Members
Redemption Right shall relieve such Redeeming Member of any prior breach of this Agreement.
Notwithstanding the exercise of a Redeeming Members Redemption Right, the Exhibitor Services
Agreement executed between such Redeeming Members ESA Party (if such Redeeming Member is a
Founding Member) and the Company shall remain in full force and effect in accordance with the terms
of such Exhibitor Services Agreement. The Redeeming Member (if a Founding Member) and its
Affiliates shall retain all ownership and rights with respect to its theatres and other assets that
are not Contributed Assets (as defined in Section 2.5 of the Contribution and Unit Holders
Agreement). All Contributed Assets of such Member shall remain the sole and exclusive property of
10.1 Agreement to Cooperate; Further Assurances. In case at any time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper officers and
Managers of the Company and each Member and their respective Affiliates shall execute such further
documents (including assignments, acknowledgments and consents and other instruments of Transfer)
and shall take such further action as shall be necessary or desirable to effect such Transfer and
to otherwise carry out the purposes of this Agreement, in each case to the extent not inconsistent
with applicable law.
10.2 Amendments. Except as otherwise expressly provided in this Agreement (including as
provided in Sections 4.3(b)(vi) and 4.3(b)(xix)), amendments to this Agreement shall require a
Majority Member Vote; provided, however, that (i) this Agreement may not be amended
so as to materially impair the voting power or economic rights of any outstanding Common Units in
relation to any other outstanding Units or of any Member in relation to the other Members, in
either case, without the consent of each Member and the holders representing a majority of the then
issued and outstanding Units or the affected Member, as the case may be, and (ii) Article 8 may
only be amended with the approval of the Manager and a Majority Member Vote.
10.3 Confidentiality. For a period of three years after the earlier of (x) the dissolution of
the Company and the termination of this Agreement or (y) the date upon which such Member ceases to
be a Member of the Company:
(a) (i) Each Member shall use and cause its Affiliates to use the same degree of care it uses
to safeguard its own Confidential Information (as defined below) and to cause its and its
Affiliates directors, officers, employees, agents and representatives to keep confidential all
Confidential Information, including but not limited to Intellectual Property and other Proprietary
Information of the other Members and the Company, and
(ii) Each Member shall hold and shall cause its Affiliates to hold and shall cause its and its
Affiliates directors, officers, employees, agents and representatives to hold in confidence,
unless compelled to disclose by judicial or administrative process or, in the opinion of counsel,
by the requirements of law, all documents and information concerning any other party hereto
furnished it by such other party or its representatives in connection with the transactions
contemplated by this Agreement (together with the information referred to in clause (i) above, the
Confidential Information)), except to the extent that any such information can be shown
to have been (A) previously known by the party to which it is furnished lawfully and without
breaching or having breached an obligation of such party or the disclosing party to keep such
documents and information confidential, (B) in the public domain through no fault of the disclosing
party, or (C) independently developed by the disclosing party without using or having used the
(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
Companys 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).
(d) Member Information shall not be supplied by the Company or its Subsidiaries to any Person
who is not an employee of the Company or the Manager, including any employee of a Member who is not
an employee of the Company or the Manager. Notwithstanding the foregoing, Member Information may
be disclosed to authorized third-party contractors of the Company if the Company determines that
such disclosure is reasonably necessary to further the business of the Company, and if such
contractor executes a non-disclosure agreement preventing such contractor from disclosing such
Member Information for the benefit of each provider of Member Information in a form reasonably
acceptable to the Founding Members. Member Information disclosed by any Member to the Company or
the Manager shall not be shared with any other Member that is not the Manager without the
disclosing Members written consent.
10.4 Injunctive Relief. The Company and each Member acknowledge and agree that a violation of
any of the terms of this Agreement will cause the other Members and the Company, as the case may
be, irreparable injury for which an adequate remedy at law is not available. Accordingly, it is
agreed that each of the Members and the Company will be entitled to an injunction, restraining
order or other equitable relief to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent jurisdiction, in
addition to any other remedy to which they may be entitled at law or, equity. Nothing stated
herein shall limit any other remedies provided under this Agreement or available to the parties at
law or in equity.
10.5 Successors, Assigns and Transferees. The provisions of this Agreement will be binding upon
and will inure to the benefit of the parties hereto and their respective successors and Permitted
Transferees, and nothing in this Agreement, express or implied, is intended to or shall confer upon
any other Person, including but not limited to any creditor of the Company or its Subsidiaries, any
right, benefit, or remedy of any nature by reason of this Agreement. An assignment of the rights,
interests or obligations hereunder, including but not limited to an assignment by operation of law,
shall be null and void unless a provision of this Agreement specifically provides otherwise or the
Company gives its prior written consent therefor.
10.6 Notices. All notices, demands or other communications to be given under or by reason of
this Agreement shall be in writing and shall be delivered by hand or sent by facsimile, electronic
mail or nationally recognized overnight delivery service and shall be deemed given when received if
delivered on a Business Day during normal business hours of the recipient or, if not so delivered,
on the next Business Day following receipt. Notices to the Company or any Member shall be
delivered to the Company or such Member as set forth in Exhibit A, as it may be revised
from time to time. Any party to this Agreement may change its address or fax number for notices,
demands and other communications under this Agreement by giving notice of such change to the other
parties hereto in accordance with this Section 10.6.
10.7 Integration. This Agreement, together with the other Joint Venture Agreements and the
documents referred to herein or therein, or delivered pursuant hereto or thereto, contain the
exclusive entire and final understanding of the parties with respect to the subject matter hereof
and thereof. There are no agreements, representations, warranties, covenants or undertakings with
respect to the subject matter hereof and thereof other than those expressly set forth herein and
therein. Except as expressly set forth herein, this Agreement together with the
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
10.8 Severability. If one or more of the provisions, paragraphs, words, clauses, phrases or
sentences contained herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, then such provision, paragraph, word,
clause, phrase or sentence shall be deemed restated to reflect the original intention of the
parties as nearly as possible in accordance with applicable law and the remainder of this
Agreement. The legality and enforceability of any such provision, paragraph, word, clause, phrase
or sentence in every other respect and of the remaining provisions, paragraphs, words, clauses,
phrases or sentences hereof will not be in any way impaired, it being intended that all
obligations, rights, powers and privileges of the Company and the Members will be enforceable to
the fullest extent permitted by law. Upon such determination of invalidity, illegality or
unenforceability, the Company and the Members shall negotiate in good faith to amend this Agreement
to effect the original intent of the Members.
10.9 Counterparts. This Agreement may be executed in one or more counterparts and by different
parties on separate counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument. The parties agree that this Agreement shall be legally
binding upon the electronic transmission, including by facsimile or email, by each party of a
signed signature page hereof to the other party.
10.10 Governing Law; Submission to Jurisdiction.
(a) This Agreement is to be construed in accordance with and governed by the internal laws of
the State of Delaware without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the State of Delaware
to the rights and duties of the parties.
(b) Each party hereto agrees that any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement shall be brought or otherwise
commenced exclusively in any state or federal court located in Delaware or in New York, New York.
Subject to the preceding sentence, each party thereto:
(i) expressly and irrevocably consents and submits to the jurisdiction of each state and
federal court located in Delaware or New York, New York (and each appellate court located in
Delaware or the State of New York) in connection with any such legal proceeding, including to
enforce any settlement, order or award;
(ii) consents to service of process in any such proceeding in any manner permitted by the
applicable laws of Delaware or the State of New York, and agrees that service of process by
registered or certified mail, return receipt requested, at its address specified pursuant to
Section 10.6 is reasonably calculated to give actual notice, to the extent permitted by applicable
(iii) agrees that each state and federal court located in Delaware or New York, New York shall
be deemed to be a convenient forum;
(iv) waives and agrees not to assert (by way of motion, as a defense or otherwise), in any
such legal proceeding commenced in any state or federal court located in Delaware or New York, New
York, any claim that such party is not subject personally to the jurisdiction of such court, that
such legal proceeding has been brought in an inconvenient forum, that the venue of such proceeding
is improper or that this Agreement or the subject matter hereof or thereof may not be enforced in
or by such court; and
(v) agrees to the entry of an order to enforce any resolution, settlement, order or award made
pursuant to this Section by the state and federal courts located in Delaware or New York, New York
and in connection therewith hereby waives, and agrees not to assert by way of motion, as a defense,
or otherwise, any claim that such resolution, settlement, order or award is inconsistent with or
violative of the laws or public policy of the laws of Delaware or the State of New York or any
(c) In the event of any action or other proceeding relating to this Agreement or the
enforcement of any provision of this Agreement, the prevailing party (as determined by the court)
shall be entitled to payment by the non-prevailing party of all costs and expenses (including
reasonable attorneys fees) incurred by the prevailing party, including any costs and expenses
incurred in connection with any challenge to the jurisdiction or the convenience or propriety of
venue of proceedings before any state or federal court located in Delaware or New York, New York.
[Signature Page to Follow]
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.
||/s/ CRAIG R. RAMSEY
||Craig R. Ramsey
Executive Vice President
||and Chief Financial Officer
||CINEMARK MEDIA, INC.
||/s/ MICHAEL CAVALIER
||Its Senior Vice President-General Counsel
||REGAL CINEMEDIA HOLDINGS, LLC
||/s/ MICHAEL L. CAMPBELL
||Michael L. Campbell
||Its Chief Executive Officer
||NATIONAL CINEMEDIA, INC.
||/s/ GARY W. FERRERA
||Gary W. Ferrera
||Its Executive Vice President and
Chief Financial Officer
signature page to THIRD amended and restated limited liability operating agreement
Members and Units
|Names and Addresses
AMC Founding Member:
American Multi-Cinema, Inc.
920 Main Street
Kansas City, MO 64105
Attention: Kevin M. Connor
Fax: (816) 480-4700
with a copy to:
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Attention: David S. Allinson
Fax: (212) 751-4864
Cinemark Founding Member:
Cinemark Media, Inc.
c/o Cinemark Holdings, Inc.
3900 Dallas Parkway
Plano, TX 75093
Attention: Robert Copple
Fax: (974) 665-1003
with a copy to:
Cinemark Holdings, Inc.
3900 Dallas Parkway
Plano, TX 75093
Attention: Michael Cavalier
Fax: (974) 665-1003
1 AMC Percentage Interest: 18.6%
2 AMC will receive $259,346,737 in redemption and
complete satisfaction of AMCs Preferred Units under Section 3.4(e).
3 Cinemark Media Percentage Interest: 14.0%
4 Cinemark Media will receive $195,091,561 in
redemption and complete satisfaction of Cinemark Medias Preferred Units
under Section 3.4(e).
Regal Founding Member:
Regal CineMedia Holdings, LLC
7132 Regal Lane
Knoxville, TN 37918
Attention: General Counsel
Fax: (865) 922-6085
with a copy to:
Hogan & Hartson L.L.P.
1200 Seventeenth Street
Denver, CO 80202
Attention: Christopher J. Walsh
Fax: (303) 899-7333
National CineMedia, Inc.
9100 East Nichols Avenue
Centennial, CO 80112-3405
Attention: General Counsel
Fax: (303) 792-8649
with a copy to:
Holme Roberts & Owen LLP
1700 Lincoln Street
Denver, CO 80203
Attention: W. Dean Salter
Fax: (303) 866-0200
5 Regal Percentage Interest: 22.6%
6 Regal will receive $315,087,304 in redemption and
complete satisfaction of Regals Preferred Units under Section 3.4(e).
7 NCM Inc. Percentage Interest: 44.8%
8 NCM Inc. will receive no amount under Section 3.4(e).
Over-Allotment Unit Purchase
||Common Units Sold
AMC Founding Member
Cinemark Founding Member
Regal Founding Member
Form of Common Unit Certificate