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EXHIBITOR SERVICES AGREEMENT DATED AS OF FEBRUARY 13, 2007

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NATIONAL CINEMEDIA, INC. | AMERICAN MULTI-CINEMA, INC

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Title: EXHIBITOR SERVICES AGREEMENT DATED AS OF FEBRUARY 13, 2007
Governing Law: Delaware     Date: 2/16/2007
Industry: MOVIES     Law Firm: Latham & Watkins LLP    

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Exhibitor Services Agreement dated as of February 13, 2007

Exhibit 10.2

NOTE: THIS DOCUMENT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. PORTIONS OF THIS DOCUMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED HAVE BEEN REDACTED AND ARE MARKED HEREIN BY “***”. SUCH REDACTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION PURSUANT TO THE CONFIDENTIAL TREATMENT REQUEST.

 


EXHIBITOR SERVICES AGREEMENT

BETWEEN NATIONAL CINEMEDIA, LLC AND

AMERICAN MULTI-CINEMA, INC.

DATED AS OF FEBRUARY 13, 2007

 



TABLE OF CONTENTS

 

 

 

 

 

 

 

  

 

  

Page

ARTICLE 1 DEFINITIONS

  

1

Section 1.01

  

Definitions

  

1

 

 

ARTICLE 2 PARTICIPATION AND FEES

  

13

Section 2.01

  

Theatre Service Participation

  

13

Section 2.02

  

Addition of Theatres

  

14

Section 2.03

  

Disposition of Theatres

  

15

Section 2.04

  

Mandatory Participation

  

15

Section 2.05

  

ESA Modification Payments; Theatre Access Fees

  

16

Section 2.06

  

Non-Cash Consideration

  

17

 

 

ARTICLE 3 EQUIPMENT

  

17

Section 3.01

  

Procurement; Cost; Specifications

  

17

Section 3.02

  

Ownership of Equipment

  

18

Section 3.03

  

AMC Equipment

  

18

Section 3.04

  

Installation

  

18

Section 3.05

  

Upgrades and Modifications

  

19

Section 3.06

  

Network Integration

  

19

Section 3.07

  

Training

  

19

Section 3.08

  

Equipment Maintenance Standard

  

20

 

 

ARTICLE 4 DELIVERY OF THE SERVICE

  

21

Section 4.01

  

Content and Distribution of the Digital Content Service and Traditional Content Program

  

21

Section 4.02

  

Delivery of Lobby Promotions, Digital Programming Services and Meeting Services

  

22

Section 4.03

  

Content Standards

  

23

Section 4.04

  

Development of the Service

  

24

Section 4.05

  

Brand; Policy Trailer; Branded Slots

  

24

Section 4.06

  

Beverage and Legacy Agreements

  

25

Section 4.07

  

Other AMC Advertising Agreements

  

26

Section 4.08

  

AMC Run-Out Obligations

  

28

Section 4.09

  

License

  

29

Section 4.10

  

Cooperation and Assistance

  

29

Section 4.11

  

Trailers

  

31

Section 4.12

  

Customer Access to Pre-Feature Program

  

31

Section 4.13

  

Excluded Theatres; IMAX Screens

  

31

Section 4.14

  

Grand Openings; Popcorn Tubs; Employee Uniforms

  

32

Section 4.15

  

Consultation regarding Certain Advertising Agreements

  

33

 

 

ARTICLE 5 SUPPORT; MAKE GOODS

  

33

Section 5.01

  

Software Support

  

33

 

i


 

 

 

 

 

Section 5.02

  

Cooperation

  

33

Section 5.03

  

Make Goods

  

33

 

 

ARTICLE 6 DIGITAL PROGRAMMING SERVICES AND MEETING SERVICES

  

34

Section 6.01

  

Participation in Digital Programming

  

34

Section 6.02

  

Participation in Meeting Services

  

34

Section 6.03

  

Marketing and Promotion of Digital Programming Services and Meeting Services

  

34

Section 6.04

  

Concessions, Sponsorships

  

35

Section 6.05

  

LLC’s First Right

  

35

Section 6.06

  

Digital Programming Content

  

35

Section 6.07

  

Use of Digital Content Network

  

35

 

 

ARTICLE 7 INTELLECTUAL PROPERTY

  

36

Section 7.01

  

Software License

  

36

Section 7.02

  

License of the LLC Marks

  

36

Section 7.03

  

License of the AMC Marks

  

37

Section 7.04

  

Status of the LLC Marks and AMC Marks

  

39

 

 

ARTICLE 8 FEES

  

39

Section 8.01

  

Payment

  

39

Section 8.02

  

Audit

  

39

 

 

ARTICLE 9 TERM AND TERMINATION

  

40

Section 9.01

  

Term

  

40

Section 9.02

  

Termination; Defaults

  

41

Section 9.03

  

Right of First Refusal

  

42

Section 9.04

  

Survival

  

44

Section 9.05

  

Effect of Termination

  

44

 

 

ARTICLE 10 REPRESENTATIONS, WARRANTIES AND COVENANTS

  

44

Section 10.01

  

Representations and Warranties

  

44

Section 10.02

  

Additional Covenants

  

45

Section 10.03

  

Disclaimer

  

46

 

 

ARTICLE 11 INDEMNIFICATION

  

46

Section 11.01

  

Indemnification

  

46

Section 11.02

  

Defense of Action

  

47

 

 

ARTICLE 12 ADDITIONAL RIGHTS AND OBLIGATIONS

  

48

Section 12.01

  

Assistance

  

48

Section 12.02

  

Infringement

  

48

Section 12.03

  

Theatre Passes

  

48

Section 12.04

  

Compliance with Law

  

48

Section 12.05

  

Insurance

  

48

Section 12.06

  

Most Favored Nations

  

48

 

ii


 

 

 

 

 

Section 12.07

  

Non-Competition and Non-Solicitation

  

49

 

 

ARTICLE 13 OWNERSHIP

  

50

Section 13.01

  

Property

  

50

Section 13.02

  

Derived Works

  

50

Section 13.03

  

No Title

  

51

 

 

ARTICLE 14 CONFIDENTIALITY

  

51

Section 14.01

  

Confidential Treatment

  

51

Section 14.02

  

Injunctive Relief

  

52

 

 

ARTICLE 15 MISCELLANEOUS

  

52

Section 15.01

  

Notices

  

52

Section 15.02

  

Waiver; Remedies

  

53

Section 15.03

  

Severability

  

53

Section 15.04

  

Integration; Headings

  

53

Section 15.05

  

Construction

  

54

Section 15.06

  

Non-Recourse

  

54

Section 15.07

  

Governing Law; Submission to Jurisdiction

  

54

Section 15.08

  

Assignment

  

55

Section 15.09

  

Force Majeure

  

56

Section 15.10

  

Third Party Beneficiary

  

56

Section 15.11

  

Export

  

56

Section 15.12

  

Independent Contractors

  

56

Section 15.13

  

Counterparts

  

56

EXHIBITS AND SCHEDULE

 

 

 

 

Exhibit A

 

Description of Advertising Services and Digital Programming Services

 

 

Exhibit A-1

 

Inventory of Lobby Promotions

 

 

Exhibit B

 

Creative Services, Beverage Agreement Advertising Rate, Digital Programming Services, Administrative Fee

 

 

Exhibit B-1

 

Terms regarding Meeting Services

 

 

Schedule 1

 

Calculation of Exhibitor Allocation, Theatre Access Fee and Run-Out Obligations

 

iii


EXHIBITOR SERVICES AGREEMENT

THIS EXHIBITOR SERVICES AGREEMENT (this “Agreement”) is entered into and effective as of February 13, 2007 (the “Effective Date”) by and between National CineMedia, LLC, a Delaware limited liability company (“LLC”), and American Multi-Cinema, Inc., a Missouri corporation (“AMC,” and with LLC, each a “Party” and collectively, the “Parties”).

BACKGROUND

WHEREAS, AMC, Regal CineMedia Holdings, LLC (“RCH”) and Cinemark Media, Inc. (“Cinemark Media”), are parties to that certain Third Amended and Restated Limited Liability Company Operating Agreement, dated of even date herewith (the “LLC Agreement”), which shall govern the rights and obligations of AMC, RCH and Cinemark Media (collectively, the “Founding Members”) and National CineMedia, Inc. (“National CineMedia”) as Members in LLC and their ownership of certain Common Units (as defined in the LLC Agreement) in LLC; and

WHEREAS, pursuant to the LLC Agreement, LLC will operate a Digital Content Network (as defined below), which has the capabilities to provide the Founding Members the Digital Content Service, the Digital Programming Services and the Meeting Services (each as defined below) pursuant to the terms and conditions herein; and

WHEREAS, AMC participates in the Digital Content Network through its Theatres; and

WHEREAS, LLC and AMC desire to enter into a service arrangement pursuant to which LLC will provide the Advertising Services (as defined below), including the Digital Content Service and the Traditional Content Program, the Digital Programming Services and the Meeting Services to AMC theatres, and AMC will accept the Advertising Services, the Digital Programming Services and the Meeting Services in such theatres, all on the terms and conditions set forth herein; and

WHEREAS, LLC and AMC anticipate that this service arrangement will, among other accomplishments, improve both the movie-going experience of theatre patrons and the ability of national, regional and local advertisers to reach their target consumers.

NOW, THEREFORE, in consideration of the premises and mutual covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, and, intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 Definitions. Within the context of this Agreement, the following terms shall have the following meanings:

4.03 Revenue” has the meaning assigned to it in Section 4.03.


Acceptance Notice” has the meaning assigned to it in Section 9.03(c).

Acquisition Theatre(s)” has the meaning assigned to it in Section 2.02(b).

Additional Lobby Promotion” has the meaning assigned to it in Section 4.02(a)(i).

Administrative Agent” means Lehman Commercial Paper Inc., as administrative agent under the LLC Credit Agreement and any successors and assignees in accordance with the terms of the LLC Credit Agreement.

Administrative Fee” means the fee for services provided by LLC as requested by AMC in connection with delivery of content to Theatres.

Advertising Services” means the advertising and promotional services (including the Digital Content Service, the Digital Carousel, the Traditional Content Program, Lobby Promotions and Event Sponsorships) as described in Part A of Exhibit A hereto.

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

Aggregate Advertising Revenue” means, for the applicable measurement period, the total revenue, in the form of cash and non-cash consideration, payable to LLC for Advertising Services, excluding revenue payable to LLC related to (i) Event Sponsorship, (ii) Advertising Services provided to third parties that are not Founding Members, and (iii) Advertising Services provided to Founding Members outside the provisions of this Agreement pursuant to a written agreement between LLC and such Founding Members.

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

Alternative Agreement” has the meaning assigned to it in Section 9.03(a).

AMC” has the meaning assigned to it in the preamble of this Agreement.

AMC Derived Works” has the meaning assigned to it in Section 13.02(b).

 

2


AMC Equipment” means the Equipment owned by AMC.

AMC Information” means all Confidential Information supplied by AMC and its Affiliates.

AMC Initial ESA Modification Payment” has the meaning assigned to it in Section 2.05(a)(i).

AMC Legacy Agreement(s)” means all pre-Effective Date agreements of AMC or its Affiliates, including without limitation such agreements relating to the purchase of advertising in Acquisition Theatres, pursuant to which services which fall within the definition of Advertising Services are provided and which are expected to result in the generation of revenue payable to AMC or its Affiliates on and after the Effective Date, but excluding the Beverage Agreement, agreements with third-party cinema advertising service providers (which give rise to Run-Out Obligations pursuant to Section 4.08) and agreements between AMC or its Affiliates and any theatres owned by third parties (including other Members or their Affiliates) regarding the exhibition of content, advertisements or promotions in such third-party theatres.

AMC Marks” means the trademarks, service marks, logos, slogans and/or designs owned by AMC or otherwise contributed by AMC for use under this Agreement, in any and all forms, formats and styles, including as may be used in the Brand (as defined herein), as may be modified from time-to-time all as notified to LLC from time-to-time by AMC.

AMC Property” has the meaning assigned to it in Section 13.01(b).

AMC Quality Standards” has the meaning assigned to it in Section 7.03(c).

“Assignment and Assumption” has the meaning assigned to it in Section 15.08.

Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §101 et seq.), as amended from time to time.

Beverage Agreement” means the Marketing, Advertising and Brand Presence Agreement by and between AMC and The Coca-Cola Company, dated as of January 1, 2005, and all exhibits and amendments thereto, as such agreement may be amended from time to time, and any subsequent agreements entered into by AMC and its beverage concessionaires at the expiration or termination of the agreement referenced above which is in effect on the Effective Date.

Beverage Agreement Advertising Rate” has the meaning assigned to it in Section 4.06(a).

Beverage Compliance Report” has the meaning assigned to it in Section 4.10(b)(i).

Brand” has the meaning assigned to it in Section 4.05.

Branded Slots” has the meaning assigned to it in Section 4.05.

 

3


“Church Worship Service” means a Meeting Event sold to a non-profit religious organization.

Cinemark” means Cinemark USA, Inc., a Texas corporation.

Cinemark Exhibitor Agreement” means the Exhibitor Services Agreement between LLC and Cinemark, dated of even date herewith, as the same may be amended, supplemented or otherwise modified from time to time.

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

Cinemark Media” has the meaning assigned to it in the recitals to this Agreement.

“Cinemark Theatre” means any “Theatre” as defined in the Cinemark Exhibitor Agreement.

Client Limitation” has the meaning assigned to it in Section 4.07(b)(i).

“Common Unit Adjustment” has the meaning assigned to it in the LLC Agreement.

“Com