Summit Operating Agreement

8/7/2019 Summit Operating Agreement

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Summit


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5.3 Officers.5.3.1 Appointment of Officers. The Board of Directors may, subject to theterms of any employment agreement, from time to time appoint (and subsequently remove)individuals to act on behalf of the Company as officers of the Company within the meaning ofSection 18-407 of the Act to conduct the day-to-day management of the Company with suchgeneral or specific authority as the Board of Directors may specify and are permitted or

authorized in this Agreement. The officers of the Company may include, but are not limited to,a Chief Executive Officer, President, Vice President, Secretary, Chief Financial Officer andChief Operating Officer and such officers shall have the duties and powers set forth onSchedule E attached hereto. The officers sball serve at the pleasure of the Board of Directors,subject to any rights of such officers under any employment contract. The officers shallexercise such powers and perform such duties, as are determined from time to time by approvalof the Board of Directors and as permitted or authorized in this Agreement. Any individual mayhold any number of offices. An officer need not be a Member. The initial officers of theCompany shall be as follows:NameRobert G. FriedmanPatrick WachsbergerBob HaywardRon Hohauser

TitleCo-Chairman and Chief Executive OfficerCo-Chairman and PresidentChief Operating OfficerChief Financial Officer and Secretary

5.3.2 Removal Resignation. and Filling of Vacancy of Officers. Anyofficer may be removed, either with or without cause, by a majority vote of the Board of

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Directors at any time. Any officer may resign at any time by giving written notice to the Boardof Directors. Any resignation shall take effect at the date of the receipt of that notice or at anylater time specified in that notice; and, unless otherwise specified in that notice, the acceptanceof the resignation shall not be necessary to make it effective. Any resignation or removal iswithout prejudice to the rights, if any, of the parties under any contract to which the officer is aparty. A vacancy in any office because of death, resignation, removal, disqualification or anyother cause shall be filled, if at all, by majority vote of the Board of Directors.

5.3.3 Signing Authority of Officers. Subject to any restrictions imposed bythe Board of Directors, any officer, acting alone, is authorized to endorse checks, drafts andother evidences of indebtedness made payable to the order of the Company, but only for thepurpose of deposit into the Company's accounts. The Chief Executive Officer, acting alone,shall be authorized to sign any check, draft or other instrument obligating the Company to paymoney and to sign contracts and other obligations on behalf of the Company. Other officers ofthe Company shall be authorized to sign checks, .drafts, or other instruments obligating theCompany to pay money, and to sign contracts and other obligations on behalf of the Company,but only to the extent expressly provided in and subject to any restrictions contained inresolutions adopted by the Board of Directors which may be general or specific.

5.4 Limitations on Authority. Neither the Directors nor the officers shall do any actin contravention of this Agreement, or possess Company property, in their capacity as officer orDirector, or assign rights in Company property other than for Company purposes.5.4.1 Approval by Majority Vote of the Board of Directors.Notwithstanding any provision to the contrary in this Agreement (but subject to Section 5.4.2),neither the Directors nor the officers shall, without the affirmative majority vote of the Board ofDirectors:

(a) take any action that would make it impracticable to carry onthe ordinary business activities of the Company; or(b) amend this Agreement or the Certificate; or(c) cause the Company to create any new class of Units (whetherCommon Units, Preferred Units or other Units) or issue any new Units (or any options,subscriptions, warrants, securities or other rights exercisable or exchangeable for or convertibleinto Units), or to admit new Members or to alter the relative rights of existing Units, in each caseexcept as specifically provided in this Agreement or pursuant to the 2007 Unit Incentive Plan; or(d) cause the Company or its subsidiaries (i) to extend the statuteof limitations for assessment of tax deficiencies with respect to adjustments to the Company's orits subsidiaries' federal, state, local or other tax returns or tax-related filings; (ii) to settle anydispute with the Internal Revenue Service or any state, local or other taxing authority; (iii) tochange any federal, state, local or other tax treatment of transactions in which the Company orone of its subsidiaries participates; or (iv) to enter into any "reportable transaction" within themeaning of the Code and applicable Regulations; or

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(e) cause the Company to make any change to the Company'saccounting methods, principles, procedures or practices, except as may be required by a changeinGAAP; or

(f) after a Conversion of the Class A Preferred Units that occursprior to a QIPO, effect any of the actions set forth in Section 5.4.2 that do not expressly continueto be effective after such Conversion pursuant to Section 3.12.5.c:o.~ 5.4.2 Approval by Class A Directors. Notwithstanding any provision to the

contrary in this Agreement (but subject to Section 3.12.5), neither the Directors nor the officersshall, without the affirmative majority vote of the Board of Directors (which majority vote shallinclude the Special Class A Director if one has been designated, or, if a Special Class A Directorhas not been designated, at least one (1) Class A Director):(a) enter into any merger, consolidation, share exchange, oracquisition by the Company of the securities of any entity, or the acquisition of all or

substantially all of the assets of such entity, pursuant to which all or in excess of twenty-five(25%) of the consideration payable in connection with such acquisition consists of securities ofthe Company; or(b) enter into a strategic (i) transaction, (ii) joint venture, (iii)merger or (iv) other business combination, in each case, out of the ordinary course of businessand where the value of such transaction Lq in excess of twenty-five percent (25%) of theCompany's net equity; provided that for purposes hereof, in the calculation of net equity,distribution costs and expenses shall be amortized in a manner similar to production costs insteadof expensed when incurred; or(c) cause the Company to acquire or agree to acquire (by mergingor consolidating with, or by purchasing a substantial portion of the assets of, or by any othermanner) any business, or any corporation, partnership, limited liability company or otherbusiness entity or any division thereof out of the ordinary course of business (it being understoodthat the ordinary course of business for the Company includes the acquisition of rights in or toMotion Pictures, including .distribution rights, whether through the acquisition of a specialpurpose production vehicle or otherwise); or(d) on behalf of the Company incur any indebtedness for borrowedmoney or assume, guarantee, endorse or assume other responsibility for the obligations of anyother Person, in each case, except for (i) the Company's obligations pursuant to the CreditAgreements, (ii) the obligations assumed by the Company in connection with the transactionscontemplated by the Contribution Agreement, (iii) indebtedness incurred in the ordinary courseof business, provided that such indebtedness shall not exceed, in each instance, fifty thousand

dollars ($50,000), and (iv) indebtedness incurred in connection with the financing, directly orindirectly, of direct costs, distribution costs and expenses or participations for Motion Picturesincurred in the ordinary course of business; or(e) voluntarily purchase, cancel, prepay or otherwise provide for acomplete or partial discharge of any indebtedness of the Company prior to a scheduled

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repayment date, except in the ordinary course of business, which includes, without limitation,prepaying production loans or making prepayments under the Credit Agreements; or

(f) cause the Company to take any affirmative action that wouldrequire the Lenders to waive any of the Company's covenants under the Credit Agreements; or

(g) adopt an annual operating budget for the Company or makeany material change to the then current and adopted annual operating budget of the Company; or(h) except with respect to existing commitments, approve anycapital expenditure, capital addition or capital improvement (other than any capital expenditure,capital addition or capital improvement related to the production or distribution of MotionPictures) that is:

i) with respect to any capital expenditure, capital additionor capital improvement in an amount equal to or less than Two Hundred Thousand Dollars($200,000), more than Twenty Thousand Dollars ($20,000) in excess of the amount budgetedtherefore in the then-current annual operating budget; orii) with respect to any capital expenditure, capital additionor capital improvement in an amount in excess of Two Hundred Thousand Dollars ($200,000),more than one hundred and ten percent (110%) of the amount budgeted therefore in the then-current annual operating budget; or

(i) other than loans to employees existing as of the date hereof,making any loan or advance to any Person or guaranteeing the obligations of any Person, otherthan customary advances to Directors, officers, employees or consultants of the Company or itssubsidiaries, as contemplated by the Credit Agreements or advances or guarantees in connectionwith the development, production, acquisition or-distribution ofMotion Pictures; or(j) other than as approved by the Compensation Committee inaccordance with the guidelines set forth in Schedule C attached hereto, cause the Company to

enter into or amend any employment agreement that is either not part of the then-current annualoperating budget or provides for compensation to the employee that is more than Twenty-FiveThousand Dollars ($25,000) in excess of the amount budgeted therefore in the then-currentannual operating budget; or(k) except in the ordinary course of business, and pursuant to theCredit Agreements, cause the Company to sell, lease, license or grant any security interest in orotherwise dispose of or encumber any of the Company's properties or assets; or(1 ) authorize any material amendment to the Credit Agreements;

or(m) authorize a change of the Company's auditors; or(n) authorize the Company to engage in any business, other thanthe Business; or

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(0) cause the Company to commence any action, suit orproceeding, other than (i) in the ordinary course of business; or (ii) in such cases where theCompany in good faith determines that failure to commence suit would result in the impairmentof a valuable aspect of its business; or (iii) in respect of a breach of this Agreement; or

(P) cause the Company to engage in any dissolution, liquidation,consolidation or reorganization; or(q) cause the Company to commence avoluntary Bankruptcy caseor institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution ofBankruptcy or insolvency proceedings against it or file a petition seeking, or consent to any,reorganization, liquidation or relief under any applicable federal or state law relating toBankruptcy, insolvency, reorganization or dissolution, or consent to the appointment of areceiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or asubstantial part of its property, or make an assignment for the benefit of creditors, or admit inwriting its inability to pay its debts as they become due, or take corporate action in furtherance of

any such action or take any similar action with respect to any securitization trust established byit; or(r) increase the number of Directors that may serve on theCompensation Committee or change the number of votes of Directors required to. approve amatter before the Compensation Committee; or(s) modify or rescind any resolution of the Board of Directors (orany committee thereof) which by its terms requires the approval of the Class A Special Directorfor any modification or rescission.

5.5 Remuneration of Officers and Directors. The officers and Directors of theCompany may be entitled to remuneration for providing services to the Company and shall beentitled to reimbursement of reasonable out-of-pocket business expenses, all as determined bythe Board of Directors or as set forth in any employment agreement with such officer orDirector.

5.6 Liability of Directors and Officers. No officer or Director of the Company shallbe personally liable under any judgment of a court, or in any other manner, for any debt,obligation, or liability of the Company, whether that debt, obligation, or liability arises incontract, tort, or otherwise, solely by reason of participating in the management of the Companyor being an officer of the Company or both. Except as otherwise provided in this Agreement, noofficer or Director shall be liable to the Company or to any Member for any loss or damagesustained by the Company or any Member in its capacity as such, unless (i) the loss or damageshall have been the result of fraud, deceit, reckless or intentional misconduct, gross negligence,or a knowing violation of law by such officer or Director or (ii) such officer or Director derivedan improper personal benefit from the transaction that resulted in such loss or damage.5.7 Indemnification.

5.7.1 Indemnification. To the fullest extent permitted by applicable law,any Member, officer or Director shall be entitled to indemnification from the Company for any

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loss, damage, or claim incurred by such Person by reason of any act or omission performed oromitted by such Person in good faith on behalf of, or in connection with the business and affairsof, the Company and in a manner reasonably believed to be within the scope of authorityconferred on such Person by this Agreement, except that no such Person shall be entitled to be

> indemnified in respect of any loss, damage, or claim incurred by such Person (i) by reason of:fraud,deceit, reckless or intentionalmisconduct, gross negligence, or a knowing violation oflawwith respect to such acts or omissions or (ii) as a result of any transaction from which suchPerson derived an improper personal benefit; provided, however, that any indemnity under thisSection 5.7.1 shall be provided out of and to the extent of Company assets only, no debt shall beincurred by the Members in order to provide a source of funds for any indemnity, and noMember shall have any personal liability (or any liability to make any additional CapitalContributions) on account thereof.

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Summit Operating Agreement