Document:

EX-10.4

 

AGREEMENT: GARBALIZER MACHINERY CORP AND COMPANY

 

AGREEMENT

 

This agreement entered into the date below shown between Garbalizer Machinery Corporation, a Utah corporation [Garbalizer] and Garb-Oil & Power Corporation, a Utah corporation [Garb-Oil]

Whereas Garbalizer, on February 25, 1999 entered into a stock exchange agreement with RecycleNet Corporation of Ontario, Canada [RecycleNet], and

Whereas Garbalizer and RecycleNet agreed that Garbalizer would have, prior to the closing of said agreement, the right to sell and convey all its existing assets (including the “Garbalizer” name and logo, patents, machinery designs, and contract rights) to Garb-Oil in exchange for Garb-Oil’s assumption of existing indebtedness of Garbalizer in the approximate amount of $500,000.00 (U.S.), and

Whereas Garb-Oil is desirous of obtaining said existing assets, the “Garbalizer” name and logo, patents, machinery designs, and contract rights and further, is desirous of assuming the existing indebtedness of Garbalizer in the approximate amount of $500,000.00 (U.S.), and

Whereas the board of directors of both Garbalizer and Garb-Oil have by resolution authorized their respective corporation to enter into this transaction and have authorized the officers of their respective corporations to perform all acts necessary and to execute all documents necessary to effect this transaction, therefore

Garbalizer, by these presents, hereby convoys all existing assets including all right, title, and interest in and to the Garbalizer name and logo, patents [as identified in the attached exhibit], machinery designs, and contract rights by it possessed.

Garb-Oil, by these presents, and as consideration for the assets above referenced, hereby assumes all existing indebtedness of Garbalizer in the approximate amount of $500,000.00 (U.S.).

Dated the 19th day of March, 1999.

 

	
            GARBALIZER MACHINERY CORPORATION  
 	
            ATTEST:
 

 

 

	
            By /s/ John C. Brewer  
 	
            /s/ Charles K. Laver
 

	
            -----------------------------  
 	
            ----------------------------
 

	
             
 	
            President  
 	
            Secretary
 

 

	
            GARB-OIL & POWER CORPORATION  
 	
            ATTEST:
 

 

 

	
            By /s/ John C. Brewer  
 	
            /s/ Charles K. Laver
 

	
            -----------------------------  
 	
            ----------------------------
 

	
             
 	
            President  
 	
            Secretary
 

 

 

 

 

 

EXHIBIT TO

GARBALIZER/GARB-OIL

AGREEMENT

 

GARBALIZER SHREDDER PATENTS

 

U.S. PATENTS

 

	
             
 	
            patent #3578252
 

	
             
 	
            patent #3708127
 

	
             
 	
            patent #3762655
 

	
             
 	
            patent #3840187
 

	
             
 	
            patent #3893635
 

	
             
 	
            patent #3951346
 

	
             
 	
            patent #4059236
 

	
             
 	
            patent #4082232
 

	
             
 	
            patent #4099678
 

	
             
 	
            patent #4125228
 

	
             
 	
            patent #4176800
 

	
             
 	
            patent #4205799
 

	
             
 	
            patent #4350308
 

	
             
 	
            patent #4927088
 

 

INTERNATIONAL PATENTS

 

	
             
 	
            Canada  
 	
            patent #1018958
 

	
             
 	
            Canada  
 	
            patent #1137949  
 

	
             
 	
            Switzerland  
 	
            patent #555195  
 

	
             
 	
            Japan  
 	
            patent #924581
 

	
             
 	
            England  
 	
            patent #1441783
 

	
             
 	
            France  
 	
            patent #74-02442
 

 

 

 

Garbalizer Machinery Corporation has the following machinery patents which it intends to develop and market as funds become available:

 

	
             
 	
            Mechanical Waste Receiver
 	
            patent #3660038
 

	
             
 	
            Waste Remover Vehicle [packer truck]  
 	
            patent #3831789
 

	
             
 	
            Air Classification  
 	
            patent #3856217
 

	
             
 	
            Refuse Processing Equipment [mangler]  
 	
            patent #3966129
 

	
             
 	
            Waste Mangler System and Structure  
 	
            patent #3993256Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

dated as of November 5, 2008

 

among

 

Entretenimiento GM de México S.A. de C.V., as Buyer,

 

and

 

AMC Netherlands HoldCo B.V.,

 

LCE Mexican Holdings, Inc.,
and

 

AMC Europe S.A., as Sellers

 

and

 

AMC Entertainment Inc., as Guarantor

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  SALE AND
  TRANSFER OF SHARES; CLOSING

  	
  12

  
	
   

  	
  2.1.

  	
  SHARES

  	
  12

  
	
   

  	
  2.2.

  	
  PURCHASE
  PRICE

  	
  12

  
	
   

  	
  2.3.

  	
  WORKING
  CAPITAL CALCULATION AND POST-CLOSING ADJUSTMENTS

  	
  13

  
	
   

  	
  2.4.

  	
  CLOSING

  	
  16

  
	
   

  	
  2.5.

  	
  CLOSING
  OBLIGATIONS

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLERS

  	
  21

  
	
   

  	
  3.1.

  	
  ORGANIZATION

  	
  21

  
	
   

  	
  3.2.

  	
  AUTHORITY;
  NO CONFLICT

  	
  22

  
	
   

  	
  3.3.

  	
  CAPITALIZATION

  	
  23

  
	
   

  	
  3.4.

  	
  FINANCIAL
  STATEMENTS

  	
  24

  
	
   

  	
  3.5.

  	
  BOOKS AND
  RECORDS

  	
  24

  
	
   

  	
  3.6.

  	
  TITLE TO
  PROPERTIES; ENCUMBRANCES

  	
  25

  
	
   

  	
  3.7.

  	
  CONDITION
  AND SUFFICIENCY OF ASSETS

  	
  25

  
	
   

  	
  3.8.

  	
  TAXES

  	
  25

  
	
   

  	
  3.9.

  	
  NO MATERIAL
  ADVERSE CHANGE

  	
  26

  
	
   

  	
  3.10.

  	
  EMPLOYEE
  BENEFITS

  	
  27

  
	
   

  	
  3.11.

  	
  COMPLIANCE
  WITH MEXICAN LEGAL REQUIREMENTS; MEXICAN GOVERNMENTAL AUTHORIZATIONS

  	
  27

  
	
   

  	
  3.12.

  	
  LEGAL
  PROCEEDINGS; ORDERS

  	
  29

  
	
   

  	
  3.13.

  	
  ABSENCE OF
  CERTAIN CHANGES AND EVENTS

  	
  30

  
	
   

  	
  3.14.

  	
  CONTRACTS;
  NO DEFAULTS

  	
  31

  
	
   

  	
  3.15.

  	
  INSURANCE

  	
  34

  
	
   

  	
  3.16.

  	
  EMPLOYEES

  	
  34

  
	
   

  	
  3.17.

  	
  LABOR
  RELATIONS; COMPLIANCE

  	
  34

  
	
   

  	
  3.18.

  	
  INTELLECTUAL
  PROPERTY

  	
  35

  
	
   

  	
  3.19.

  	
  CERTAIN
  PAYMENTS

  	
  35

  
	
   

  	
  3.20.

  	
  RELATIONSHIPS
  WITH RELATED PERSONS

  	
  35

  
	
   

  	
  3.21.

  	
  BROKERS OR
  FINDERS

  	
  36

  
	
   

  	
  3.22.

  	
  REPRESENTATIONS
  CONCERNING SYMPHONY

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS
  AND WARRANTIES OF BUYERS

  	
  37

  
	
   

  	
  4.1.

  	
  ORGANIZATION
  AND GOOD STANDING

  	
  37

  
	
   

  	
  4.2.

  	
  AUTHORITY;
  NO CONFLICT

  	
  37

  
	
   

  	
  4.3.

  	
  CERTAIN
  PROCEEDINGS

  	
  38

  
	
   

  	
  4.4.

  	
  BROKERS OR
  FINDERS

  	
  38

  

 

i

 

	
   

  	
  4.5.

  	
  AVAILABLE
  FUNDS

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  COVENANTS

  	
  39

  
	
   

  	
  5.1.

  	
  ACCESS AND
  INVESTIGATION

  	
  39

  
	
   

  	
  5.2.

  	
  OPERATION OF
  BUSINESSES

  	
  39

  
	
   

  	
  5.3.

  	
  NEGATIVE
  COVENANTS

  	
  39

  
	
   

  	
  5.4.

  	
  REQUIRED
  APPROVALS

  	
  41

  
	
   

  	
  5.5.

  	
  SUPPLEMENTS
  TO DISCLOSURE STATEMENT

  	
  42

  
	
   

  	
  5.6.

  	
  NO
  NEGOTIATION

  	
  43

  
	
   

  	
  5.7.

  	
  BEST EFFORTS

  	
  43

  
	
   

  	
  5.8.

  	
  RELEASE OF
  CURRENT OFFICERS AND DIRECTORS

  	
  43

  
	
   

  	
  5.9.

  	
  NONCOMPETITION;
  NONSOLICITATION

  	
  43

  
	
   

  	
  5.10.

  	
  PURCHASE BY
  MEXICAN INDIVIDUALS

  	
  44

  
	
   

  	
  5.11.

  	
  BOOKS AND
  RECORDS

  	
  44

  
	
   

  	
  5.12.

  	
  WITHHOLDING

  	
  44

  
	
   

  	
  5.13.

  	
  CERTAIN
  ACTIONS

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  CONDITIONS
  PRECEDENT TO BUYERS’ OBLIGATION TO CLOSE

  	
  45

  
	
   

  	
  6.1.

  	
  ACCURACY OF
  REPRESENTATIONS

  	
  46

  
	
   

  	
  6.2.

  	
  SELLERS’
  PERFORMANCE

  	
  46

  
	
   

  	
  6.3.

  	
  CONSENTS

  	
  46

  
	
   

  	
  6.4.

  	
  ANTITRUST
  APPROVAL

  	
  46

  
	
   

  	
  6.5.

  	
  NO ORDER

  	
  46

  
	
   

  	
  6.6.

  	
  NO
  PROCEEDINGS

  	
  47

  
	
   

  	
  6.7.

  	
  NO
  PROHIBITION

  	
  47

  
	
   

  	
  6.8.

  	
  DELIVERABLES

  	
  47

  
	
   

  	
  6.9.

  	
  RELEASE

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  CONDITIONS
  PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE

  	
  47

  
	
   

  	
  7.1.

  	
  ACCURACY OF
  REPRESENTATIONS

  	
  47

  
	
   

  	
  7.2.

  	
  BUYERS’
  PERFORMANCE

  	
  48

  
	
   

  	
  7.3.

  	
  CONSENTS

  	
  48

  
	
   

  	
  7.4.

  	
  ANTITRUST
  APPROVAL

  	
  48

  
	
   

  	
  7.5.

  	
  NO ORDER

  	
  48

  
	
   

  	
  7.6.

  	
  NO
  PROCEEDINGS

  	
  48

  
	
   

  	
  7.7.

  	
  NO
  PROHIBITION

  	
  48

  
	
   

  	
  7.8.

  	
  DELIVERABLES

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  GENERAL
  INDEMNIFICATION OBLIGATIONS

  	
  49

  
	
   

  	
  8.1.

  	
  DEFINITIONS

  	
  49

  
	
   

  	
  8.2.

  	
  SURVIVAL

  	
  49

  
	
   

  	
  8.3.

  	
  INDEMNIFICATION
  BY BUYERS

  	
  50

  
	
   

  	
  8.4.

  	
  INDEMNIFICATION
  BY SELLERS

  	
  50

  
	
   

  	
  8.5.

  	
  LIMITATIONS
  ON INDEMNIFICATION

  	
  50

  
	
   

  	
  8.6.

  	
  INDEMNIFICATION
  PROCEDURES

  	
  52

  

 

ii

 

	
   

  	
  8.7.

  	
  TREATMENT OF
  INDEMNITY PAYMENTS

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TERMINATION

  	
  54

  
	
   

  	
  9.1.

  	
  TERMINATION
  EVENTS

  	
  54

  
	
   

  	
  9.2.

  	
  EFFECT OF
  TERMINATION

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  INTENTIONALLY
  OMITTED

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  TAX MATTERS

  	
  55

  
	
   

  	
  11.1.

  	
  TRANSFER
  TAXES

  	
  55

  
	
   

  	
  11.2.

  	
  PREPARATION
  OF TAX RETURNS

  	
  55

  
	
   

  	
  11.3.

  	
  TAX PAYMENTS
  AND REFUNDS

  	
  56

  
	
   

  	
  11.4.

  	
  TAX
  COOPERATION AND EXCHANGE OF INFORMATION

  	
  59

  
	
   

  	
  11.5.

  	
  CONTESTS

  	
  59

  
	
   

  	
  11.6.

  	
  MISCELLANEOUS

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  GENERAL
  PROVISIONS

  	
  61

  
	
   

  	
  12.1.

  	
  EXPENSES

  	
  61

  
	
   

  	
  12.2.

  	
  PUBLIC
  ANNOUNCEMENTS

  	
  61

  
	
   

  	
  12.3.

  	
  CONFIDENTIALITY

  	
  62

  
	
   

  	
  12.4.

  	
  NOTICES

  	
  62

  
	
   

  	
  12.5.

  	
  FURTHER
  ASSURANCES

  	
  63

  
	
   

  	
  12.6.

  	
  WAIVER

  	
  63

  
	
   

  	
  12.7.

  	
  ENTIRE
  AGREEMENT AND MODIFICATION

  	
  64

  
	
   

  	
  12.8.

  	
  DISCLOSURE
  STATEMENT

  	
  64

  
	
   

  	
  12.9.

  	
  ASSIGNMENTS,
  SUCCESSORS, AND NO THIRD-PARTY RIGHTS

  	
  64

  
	
   

  	
  12.10.

  	
  SEVERABILITY

  	
  65

  
	
   

  	
  12.11.

  	
  SECTION
  HEADINGS, CONSTRUCTION

  	
  65

  
	
   

  	
  12.12.

  	
  TIME OF
  ESSENCE

  	
  65

  
	
   

  	
  12.13.

  	
  GOVERNING
  LAW

  	
  64

  
	
   

  	
  12.14.

  	
  JURISDICTION
  AND VENUE

  	
  65

  
	
   

  	
  12.15.

  	
  WAIVER OF
  JURY TRIAL

  	
  66

  
	
   

  	
  12.16.

  	
  COUNTERPARTS

  	
  66

  
	
   

  	
  12.17.

  	
  SPECIFIC
  PERFORMANCE; LIQUIDATED DAMAGES; ATTORNEYS’ FEES

  	
  66

  
	
   

  	
  12.18.

  	
  EFFECT OF
  INVESTIGATION

  	
  68

  
	
   

  	
  12.19.

  	
  NO
  SUBROGATION

  	
  68

  
	
   

  	
  12.20.

  	
  NATURE OF
  SELLERS’ OBLIGATIONS

  	
  68

  
	
   

  	
  12.21.

  	
  NATURE OF
  BUYERS’ OBLIGATIONS

  	
  68

  

 

iii

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Grupo Cinemex S.A. de C.V. Wholly-Owned Subsidiaries

  
	
  Exhibit B

  	
   

  	
  Transaction Documents

  
	
  Exhibit C

  	
   

  	
  Form of Resignation and Release of Directors

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  Sellers’ Knowledge Persons

  
	
  Schedule 2

  	
   

  	
  Buyers’ Knowledge Persons

  
	
  Schedule 2.1

  	
   

  	
  Transfers of Shares between Buyers and Sellers

  
	
  Schedule 2.3

  	
   

  	
  Working Capital

  
	
  Schedule 4.2

  	
   

  	
  Buyers’ Consents

  
	
   

  	
   

  	
   

  
	
  DISCLOSURE STATEMENT

  

 

iv

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (“Agreement”) is made as of November 5,
2008, among Entretenimiento GM de México S.A. de C.V. (“Entretenimiento”), AMC
Netherlands HoldCo B.V. (“AMC Netherlands”), LCE Mexican Holdings, Inc. (“LCE
Mexican”), and AMC Europe S.A. (“AMC Europe”) (each, a “Seller” and
collectively, the “Sellers”).  
Entretenimiento and the individuals designated by Entretenimiento
pursuant to Section 5.10 are referred to in this Agreement individually as
a “Buyer,” and collectively, the “Buyers”.

 

RECITALS

 

Buyers desire to purchase from AMC Netherlands, LCE Mexican and AMC
Europe, and AMC Netherlands, LCE Mexican and AMC Europe desire to sell (i) all
of the issued and outstanding common shares of capital stock (the “Cinemex
Common Shares”) of Grupo Cinemex, S.A. de C.V., a Mexican sociedad
anónima de capital variable (the “Target Company”) and (ii) all
of the issued and outstanding equity interests (partes
sociales) (the “Symphony Company Interest” and together with the Cinemex
Common Shares, the “Shares”) of Symphony Subsisting Vehicle, S. de R.L. de C.V.
(“Symphony”), for the consideration and on the terms set forth in this
Agreement.

 

AGREEMENT

 

The parties, intending to be legally bound, agree as follows:

 

1.             DEFINITIONS

 

For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:

 

“AMC Credit Agreement “ — as defined in Section 6.9.

 

“AMC Europe” — as defined in the preamble to this Agreement.

 

“AMC Netherlands” — as defined in the preamble to this Agreement.

 

“Aggregate Working Capital” — as defined in Section 2.3(a).

 

“Agreement” — as defined in the preamble of this Agreement.

 

“Antitrust Approval” — as defined in Section 6.4.

 

“Antitrust Laws” — as defined in Section 5.4(b).

 

“Applicable Contract” — any Contract (a) under which any Cinemex
Company has any rights, (b) under which any Cinemex Company is subject to
any obligation or liability, or (c) by which any Cinemex Company or any of
the assets or property owned or used by it is bound.

 

 

“Applicable Exchange Rate” — as of any day of determination, the
exchange rate for the Mexican peso to the United States dollar known as the “tipo de cambio para solventar obligaciones denominadas en moneda
extranjera pagaderas en la República Mexicana” published by Banco de Mexico in the Diario Oficial de la
Federación for the Business Day immediately preceding (i) for
the purposes of the payment of any claim for Losses made pursuant to Section 8.3
or 8.4, the date on which such Losses are determined by a final non-appealable
judgment or mutually agreed to by the Indemnifying Party and the Indemnified
Party, as applicable or (ii) for all other purposes, the Closing Date.

 

“Applicable Law” — shall mean regarding any Person, any Mexican Legal
Requirement or Legal Requirement of any Governmental Body applicable to such
Person or to any of its Subsidiaries or to any of its corresponding properties
or assets.

 

“Applicable Territory” — the United Mexican States.

 

“Balance Sheet” — as defined in Section 3.4(a).

 

“Best Efforts” — the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances, and that are within its
control, to ensure that such result is achieved as expeditiously as possible; provided,
however, that an obligation to use Best Efforts under this Agreement
does not require the Person subject to that obligation to take actions that
would result in a material adverse change in the benefits that are expected to
be obtained by such Person from this Agreement and the Contemplated
Transactions.

 

“Breach” — a “Breach” of a representation, warranty, covenant,
obligation, or other provision of any nature under this Agreement or any
instrument delivered pursuant to this Agreement will be deemed to have occurred
if there is or has been any inaccuracy in or breach of, or any failure to
perform or comply with, such representation, warranty, covenant, obligation, or
other provision.  The term “Breached”
shall have a correlative meaning.

 

“Broker Losses” — as defined in Section 8.1(g).

 

“Business Day” — means (i) for the purposes of the definition of “Antitrust
Approval”, any day that is not a Saturday, Sunday or other day on which
commercial banks in Mexico City, Mexico, are authorized or required by law to remain
closed and (ii) for all other purposes, any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City, New York or
Mexico City, Mexico, are authorized or required by law to remain closed.

 

“Buyer” or “Buyers” — as defined in the preamble of this Agreement.

 

“Buyer Indemnified Parties” — as defined in Section 8.1(a).

 

“Buyer Liquidated Damages” — as defined in Section 12.17(d).

 

2

 

“Buyer Material Adverse Change” — with respect to Buyers, any change or
effect that has a material adverse effect on the ability of Buyers to perform
their obligations under any of this Agreement and the other Transaction
Documents.

 

“Buyers’ Advisors” — as defined in Section 5.1.

 

“CME” — as defined in Section 6.9.

 

“Capital Expenditure” — any expenditure for fixed assets that would be
classified as a fixed asset under Mexican NIF.

 

“Cash and Cash Equivalents” — the sum of the fair market value
(determined in accordance with Mexican NIF) of all immediately available cash
and cash equivalents (including marketable securities and short term
investments) of the Cinemex Companies plus the aggregate amount in respect of
the Success Bonus Program payments, but only to the extent the Purchase Price is
decreased by the same amount pursuant to Section 2.2(d).

 

“Cinemex Business” — first run movie exhibition business as conducted
by the Cinemex Companies as of the date of this Agreement.

 

“Cinemex Capitalization” — as defined in Section 2.5(d)(ii)(C).

 

“Cinemex Common Shares” — as defined in the recitals of this Agreement.

 

“Cinemex Companies” or “Cinemex Company” — the Target Company and each
and all of the Subsidiaries, collectively.

 

“Closing” — as defined in Section 2.4.

 

“Closing Date” — the date and time as of which the Closing actually
takes place.

 

“Closing Date Balance Sheet” — as defined in Section 2.3(b).

 

“Closing Date Balance Sheet Calculations” — as defined in Section 2.3(b).

 

“Closing Date Interim Period Capital Expenditures” — as defined in Section 2.3(b).

 

“Closing Date Net Funded Indebtedness” — as defined in Section 2.3(b).

 

“Closing Date Working Capital” — as defined in Section 2.3(b).

 

“Closing Proceeds” — as defined in Section 2.2.

 

“Competing Business” — as defined in Section 3.20(a).

 

3

 

“Consent” — any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).

 

“Contemplated Transactions” — all of the transactions contemplated by
this Agreement, including:

 

(a)           the sale of the Shares
by Sellers to Buyers;

 

(b)           the performance by
Buyers and Sellers of their respective covenants and obligations under this
Agreement; and

 

(c)           Buyers’ acquisition and
ownership of the Shares.

 

“Contest” — as defined in Section 11.5(b).

 

“Contract” — any agreement, contract, obligation, or undertaking that
is legally binding.

 

“Current Assets” — as defined in Section 2.3(a).

 

“Current Liabilities” — as defined in Section 2.3(a).

 

“Dávila Separation Agreement” — as defined in Section 2.2(c).

 

“Disclosure Statement” — the disclosure statement delivered by Sellers
to Buyers concurrently with the execution and delivery of this Agreement.

 

“Encumbrance” — any lien, option, pledge, security interest, right of
first refusal or similar restriction, including with respect to the Shares, any
restriction on voting, transfer or exercise of any other attribute of
ownership.

 

“Entretenimiento” — as defined in the preamble of this Agreement.

 

“Estimated Interim Period Capital Expenditures” — the good faith
estimate delivered to Buyers two Business Days before the Closing Date by the
chief financial officer of Target Company of the Interim Period Capital
Expenditures.  Estimated Interim Period
Capital Expenditures will be expressed in pesos and converted to United States
dollars at the Applicable Exchange Rate.

 

“Estimated Net Funded Indebtedness” — the good faith estimate delivered
to Buyers two Business Days before the Closing Date by the chief financial
officer of Target Company of the Net Funded Indebtedness as of the close of
business immediately preceding the Closing Date.  Estimated Net Funded Indebtedness will be
expressed in pesos and converted to United States dollars at the Applicable
Exchange Rate.

 

“Estimated Working Capital” — the good faith estimate delivered to
Buyers two Business Days before the Closing Date by the chief financial officer
of Target Company of the Aggregate Working Capital as of the close of business 

 

4

 

immediately preceding the Closing Date.  Estimated Working Capital will be expressed
in pesos and converted to United States dollars at the Applicable Exchange
Rate.

 

“Family” — as defined in the definition of “Related Person”.

 

“Fundamental Losses” — as defined in Section 8.1(b).

 

 “Funded Indebtedness” — with
respect to the Cinemex Companies, as of any date of determination, without
duplication, all indebtedness (determined in accordance with Mexican NIF) for
borrowed money or indebtedness issued in substitution or exchange for borrowed
money (other than capital leases, trade accounts payables, accrued operating
expenses and other indebtedness arising in the ordinary course of business) as
of such day of determination together with all accrued and unpaid interest
thereon.

 

“Gamboa” — as defined in Section 11.2(b).

 

“Governmental Authorization” — any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.

 

“Governmental Body” — any:

 

(a)           nation, state,
municipality, city, or other jurisdiction of any nature;

 

(b)           federal, state, local,
municipal, foreign, or other legislative or judicial authority or government;

 

(c)           governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal);

 

(d)           multi-national
organization or body; or

 

(e)           body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.

 

“IETU” — Impuesto
Empresarial a Tasa Unica imposed under Mexican Legal Requirements.

 

“Inbursa Additional Amount” — as defined in Section 2.5(c)(iii).  The Inbursa Additional Amount shall not
include any fee or other amount paid or payable to the Inbursa Lender Parties
in connection with or in consideration for the Inbursa Amendment or Waiver.

 

“Inbursa Adjustment” — as defined in Section 2.3(b).

 

 

5

 

“Inbursa Amendment or Waiver” — as defined in Section 2.5(b).

 

“Inbursa Lender Parties” — as defined in Section 2.5(b).

 

“Inbursa Loan Agreements” — collectively, the Inbursa Term Loan
Agreement, the Inbursa Revolving Loan Agreement and the other Loan Documents (Documentos del Crédito) (as defined in each Inbursa Loan
Agreement).

 

“Inbursa Repayment Amount” — as defined in Section 2.5(c)(iii).

 

“Inbursa Revolving Loan Agreement” — the revolving credit agreement (contrato de crédito revolvente) dated as of December 20,
2005, as amended, among Cadena Mexicana de Exhibición, S.A. de C.V., the
subsidiary guarantors named therein, the lenders party thereto, Banco Inbursa,
S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa, as
administrative agent, and Scotiabank Inverlat, S.A., Institución de Banca
Múltiple, Grupo FinancieroScotiabank Inverlat, as syndication agent.

 

“Inbursa Term Loan Agreement” — the credit agreement (contrato de crédito) dated as of August 16, 2004, as
amended, among Cadena Mexicana de Exhibición, S.A. de C.V., the subsidiary
guarantors named therein, the lenders party thereto, Banco Inbursa, S.A.,
Institución de Banca Múltiple, Grupo Financiero Inbursa, as administrative
agent, and Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo
FinancieroScotiabank Inverlat, as syndication agent.

 

“Inbursa Payoff Letter” — as defined in Section 2.5(c)(iii).

 

“Income Tax Contest” — as defined in Section 11.5(b).

 

“Indemnified Party” — as defined in Section 8.1(c).

 

“Indemnifying Party” — as defined in Section 8.1(d).

 

“Independent Accountant” — as defined in Section 2.3(c).

 

“Intellectual Property Assets” — as defined in Section 3.18.

 

“Interim Period Capital Expenditures” — the aggregate amount of Capital
Expenditures of the Cinemex Companies made with respect to the theatres
currently under construction in Morelia and Santa Fe, Mexico, respectively,
from the date of this Agreement through the close of business immediately
preceding the Closing Date.

 

“Knowledge” — an individual will be deemed to have “Knowledge” of a
particular fact or other matter (a) when used in Sections 3 and 4 for
purposes of Section 8, if such individual is actually aware or would
reasonably be expected to be aware of such fact or matter as a prudent
businessperson (taking into account such individual’s role), and (b) when
used in Sections 3 and 4 for all other purposes, if such individual is actually
aware, after making such due inquiry as a prudent businessperson (taking into
account such individual’s role) to those employees who directly report to that
individual, 

 

6

 

of such fact or other matter.  A Person (other than an individual) will be deemed
to have “Knowledge” of a particular fact or other matter if (i) in the
case of Sellers or the Cinemex Companies, any of the individuals listed on
Schedule 1 has or is deemed to have Knowledge of such fact or other matter, or (ii) in
the case of Buyers, any of the individuals listed on Schedule 2 has or is
deemed to have Knowledge of such fact or other matter.

 

“LCE Mexican” — as defined in the preamble to this Agreement.

 

“Legal Requirement” — any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, law, ordinance,
regulation, statute, or treaty.

 

“Loss” or “Losses” — as defined in Section 8.1(e).

 

“Material Adverse Change” — shall mean any events, changes, facts,
developments or effects which, individually or in the aggregate, would be
reasonably expected to have a material adverse effect on the business,
operations, assets, financial condition or results of operations of the Cinemex
Companies, taken as a whole; provided, however, that in
determining whether there has been a Material Adverse Change, any adverse
effect principally attributable to any of the following shall be
disregarded:  (i) any adverse
change, event, development or effect arising from or relating to (A) general
economic conditions (including those in one or more of the geographic markets
in which the Cinemex Companies conduct or propose to conduct business), (B) economic
conditions relating to the film exhibition industry, (C) regional,
national or international political or social conditions, including the
engagement by the United States or Mexico in hostilities, whether or not
pursuant to the declaration of a national emergency or war, or the occurrence
of any military or terrorist attack upon anywhere in the world, and (D) financial,
banking or securities markets (including any disruption thereof and any decline
in the price of any security or any market index); except, in the case of
clauses (A), (B), (C) and (D) above and clause (iv) below, to
the extent any such adverse effect or change disproportionately affects the
Cinemex Companies or the Cinemex Business as compared to other movie exhibition
companies in Mexico; (ii) the taking of any action specifically required
by this Agreement; (iii) any event, circumstance, change or effect that is
demonstrated to have resulted from the announcement of the acquisition of the
Target Company or the identity of Buyers or their affiliates; and (iv) any
change of any Legal Requirement, Mexican Legal Requirement or Mexican NIF of
general application that is applicable to the Cinemex Companies.

 

“Material Interest” — as defined in the “Related Person” definition.

 

“Mexican Consolidated Income Tax Return” — as defined in Section 11.2(b).

 

“Mexican Federal Competition Law” — as defined in Section 5.4(a).

 

7

 

“Mexican Governmental Authorization” — any Governmental Authorization
issued, granted, given or otherwise made available by or under the authority of
any Mexican Governmental Body or pursuant to any Mexican Legal Requirement.

 

“Mexican Governmental Body” — any:

 

(a)           Mexican federal, state
or municipal government;

 

(b)           Mexican legislative,
judicial or governmental authority of any nature (including any governmental
agency, branch, department, official or entity, centralized or decentralized,
commission, government owned or controlled entities and any court or other
tribunal); or

 

(c)           multi-national
organization or body of which Mexico is a party.

 

“Mexican
Income Tax” — the income tax imposed under Mexican Legal Requirements.

 

“Mexican Legal
Requirement” — any law, rule, regulation, administrative order, decree, or
statute enacted or promulgated by any Mexican Governmental Body.

 

“Mexican NIF” — Mexican financial reporting standards (Normas de Información Financiera), as issued from time to
time by the Mexican Financial Reporting Standards Board (Consejo
Mexicano para la Investigación y Desarrollo de Normas de Información Financiera).

 

“Mexican Post-Closing Return” — as defined in Section 11.2(b).

 

“Mexican VAT” — the value added tax imposed under Mexican Legal
Requirements.

 

“Mexico” — the United Mexican States.

 

“Net Funded Indebtedness” — Funded Indebtedness less Cash and Cash
Equivalents.

 

“Notice of Objection” — as defined in Section 2.3(c).

 

“Order” — any award, decision, injunction, judgment, order, ruling, or
verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Body.

 

“Ordinary Course of Business” — an action taken by a Person will be
deemed to have been taken in the “Ordinary Course of Business” only if such
action is consistent with the past practices of such Person, is taken in the
ordinary course of the 

 

8

 

normal day-to-day operations of such Person
and is consistent with the usage and custom of the industry in which such
Person operates.

 

“Organizational Documents” — (a) the articles or certificate of
incorporation and the bylaws or the combination of both or the estatutos sociales of a corporation; (b) the
partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) the articles or
certificate of formation and the operating agreement or limited liability
company agreement of a limited liability company; (e) any charter or
similar document adopted or filed in connection with the creation, formation,
or organization of a Person; and (f) any amendment to any of the foregoing.

 

“Outside Date” — as defined in Section 9.1(a).

 

“Pending Refund” — as defined in Section 11.2(a).

 

“Pepsi Deferred Revenue Amount” — US$1,900,000.

 

“Permitted Encumbrances” — as defined in Section 3.6.

 

“Person” — any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body,  of any nature.

 

“pesos” or “$” — Mexican pesos, legal tender of Mexico (except where
otherwise specifically indicated to be United States dollars, i.e., “US$”).

 

“Plans” — as defined in Section 3.10(a).

 

“Post-Closing Returns” — as defined in Section 11.2(b).

 

“Proceeding” — any action, arbitration, hearing, litigation, or suit
(whether civil, criminal, administrative, investigative, or informal)
commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Body or arbitrator.

 

“Purchase Price” — as defined in Section 2.2.

 

“Related Person” — with respect to a particular individual:

 

(a)           each other member of
such individual’s Family;

 

(b)           any Person that is
directly or indirectly controlled by such individual or one or more members of
such individual’s Family;

 

9

 

(c)                                  any
Person in which such individual or members of such individual’s Family hold
(individually or in the aggregate) a Material Interest; and

 

(d)                                 any
Person with respect to which such individual or one or more members of such
individual’s Family serves as a director, officer, partner, or trustee (or in a
similar capacity).

 

With respect to a specified Person other than an individual:

 

(a)                                  any
Person that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with such
specified Person;

 

(b)                                 any
Person that holds a Material Interest in such specified Person;

 

(c)                                  each
Person that serves as a director, officer, partner, or trustee of such
specified Person (or in a similar capacity);

 

(d)                                 any
Person in which such specified Person holds a Material Interest;

 

(e)                                  any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and

 

(f)                                    any
Related Person of any individual described in clause (b) or (c).

 

For purposes of this definition, (a) the “Family” of an individual
includes (i) the individual, (ii) the individual’s spouse and former
spouses, (iii) any other natural person who is related to the individual
or the individual’s spouse within the fourth degree, and (iv) any other
natural person who resides with such individual, and (b) “Material
Interest” means direct or indirect beneficial ownership of voting securities or
other voting interests representing at least 10% of the outstanding voting
power of a Person or equity securities or other equity interests representing
at least 10% of the outstanding equity securities or equity interests in a
Person.

 

“Releasee” — as defined in Section 5.8.

 

“Required Working Capital” — Negative $180’000,000 pesos  converted to United States dollars at the Applicable
Exchange Rate.

 

“Representative” — with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.

 

“Seller” or “Sellers” — as defined in the preamble of this Agreement.

 

“Seller Liquidated Damages” — as defined in Section 12.17(c).

 

10

 

“Seller’s Percentage” — means a Seller’s percentage of ownership of the
Target Company and Symphony, as measured by the number of Shares held by such
Seller in relation to the total number of Shares.

 

“Sellers Structuring Transactions” — as defined in Section 5.3(b).

 

“Shares” — as defined in the Recitals of this Agreement.

 

“Specified Taxes” — IETU, Mexican Income Tax and Mexican VAT.

 

“Straddle Period” — as defined in Section 11.3(a).

 

“Straddle Period Tax” — as defined in Section 11.3(a).

 

“Straddle Period Tax Calculation” — as defined in Section 11.3(d).

 

“Subsidiary” — any of the Target Company’s subsidiaries set forth on Exhibit A
to this Agreement, and “Subsidiaries” means all of them collectively.

 

“Success Bonus Program” — means the Transaction Success Bonus Program,
dated October 24, 2008 made available by the Cinemex Companies to certain
executives of the Cinemex Companies.

 

“Symphony” — as defined in the recitals of this Agreement.

 

“Symphony Company Interest” — as defined in the recitals of this
Agreement.

 

“Target Company” — as defined in the recitals of this Agreement.

 

“Tax Benefit” — as defined in Section 8.5(e).

 

“Tax Loss Cap” — as defined in Section 8.5(c)(ii).

 

“Tax Losses” — as defined in Section 8.1(f).

 

“Tax Returns” — any return, report, notice, form, declaration, claim
for refund, estimate, election, or information returns or statement or other
document relating to or required by law to be filed by an entity in connection
with any Tax, including any Schedule or attachment thereto, and including any
amendment thereof.  Any one of the
foregoing Tax Returns shall be referred to sometimes as a “Tax Return”.

 

“Taxable Period” — any taxable year or any other period that is treated
as a taxable year (or other period, or portion thereof, in the case of a Tax
imposed with respect to such other period; e.g., a quarter) with respect to
which any Tax may be imposed by any Governmental Body.

 

“Taxes” — all income, gross receipts, withholding, capital gain,
excise, real property, personal property, sales, value added, transfer, social
security taxes, payroll 

 

11

 

taxes, INFONAVIT, SAR, franchise or other tax
imposed by any Governmental Body, and shall include any related interest,
fines, surcharges, penalties or other charges.

 

“Taxing Authority” — any federal, national, provincial, state, local or
foreign government, or any subdivision, agency, commission or authority thereof
exercising tax regulatory, enforcement, collection or other authority.

 

“Threatened” — a claim, Proceeding, dispute, action or other matter
will be deemed to have been “Threatened” if any demand or statement has been
made in writing or any notice has been given in writing that would lead a
prudent Person to conclude that such a claim, Proceeding, dispute, action or
other matter is reasonably likely to be asserted, commenced, taken or otherwise
pursued in the future.

 

“Transaction Documents” — the documents set forth on Exhibit B to
this Agreement, collectively.

 

“United States” — the United States of America, including the
commonwealths, territories and possessions thereof.

 

2.             SALE AND TRANSFER OF SHARES; CLOSING

 

2.1.          SHARES

 

Subject to the terms and conditions of this Agreement, and in reliance
on the representations and warranties of the parties contained herein, at the
Closing, the Sellers, jointly and severally, will sell and transfer to Buyers,
all of the Sellers’ right, title, interest and ownership in and to the Shares
free and clear of any Encumbrance, and Buyers and/or their designee(s) will
purchase from Sellers all of Sellers’ rights, title, interest and ownership in
and to the Shares owned by each Seller; provided, however, that
the foregoing transactions shall be consummated substantially concurrently but
in the following chronological order:

 

(a)           First,
the sale and transfer of the Symphony Company Interest held by AMC Europe,

 

(b)           Second,
the sale and transfer of the Symphony Company Interest held by LCE Mexican,

 

(c)           Third,
the sale and transfer of the Cinemex Common Shares held by AMC Netherlands, and

 

(d)           Fourth,
the sale and transfer of the Symphony Company Interest held by AMC Netherlands.

 

2.2.          PURCHASE PRICE

 

The aggregate
purchase price (the “Purchase Price”) to be paid by Buyers to Sellers for the
Shares will be equal to the Closing Proceeds and the net post-closing 

 

12

 

adjustments determined pursuant
to Sections 2.3 and 11.6.  The “Closing
Proceeds” will be equal to US$315,000,000,

 

(a)                                  decreased
by the amount of the Estimated Net Funded Indebtedness,

 

(b)                                 decreased
by the Inbursa Additional Amount if the Inbursa Payoff Letter has been
obtained, and if not, Sellers’ good faith estimate of the Inbursa Additional
Amount,

 

(c)                                  decreased
by any remaining noncompete payments payable to Miguel Ángel Dávila Guzmán
after the Closing Date under the terms of that certain separation agreement
between Miguel Ángel Dávila Guzmán and Cadena Mexicana de Exhibición, S.A. de
C.V., dated March 7, 2008, and ratified on April 30, 2008 (the “Dávila
Separation Agreement”),

 

(d)                                 decreased
by the aggregate amount of payments made pursuant to, under or in connection
with the Success Bonus Program,

 

(e)                                  decreased
by the Pepsi Deferred Revenue Amount,

 

(f)                                    increased
by the amount of Estimated Interim Period Capital Expenditures, and

 

(g)                                 either
(i) increased by the amount that the Estimated Working Capital exceeds the
Required Working Capital or (ii) decreased by the amount that the
Estimated Working Capital is less than the Required Working Capital.

 

2.3.                              WORKING CAPITAL CALCULATION AND POST-CLOSING
ADJUSTMENTS

 

(a)                                  Schedule
2.3 contains a line item breakdown of certain combined current assets (the “Current
Assets”) and combined current liabilities (“Current Liabilities”) of the
Cinemex Companies.  The parties agree
that the line items on Schedule 2.3 (which will not include Specified Taxes)
will be the only line items used for purposes of determining Current Assets and
Current Liabilities under this Agreement. 
For purposes of this Agreement, “Aggregate Working Capital” of the
Cinemex Companies will be determined by subtracting the Current Liabilities as
of any day of determination from the Current Assets as of such day of
determination of all of the Cinemex Companies.

 

(b)                                 Within
sixty (60) days after the Closing, Buyers will prepare a balance sheet of the
Cinemex Companies, on a consolidated basis as of the close of business
immediately preceding the Closing 

 

13

 

Date, which balance sheet will be prepared in
accordance with Mexican NIF applied on a consistent basis with the Balance
Sheet (the “Closing Date Balance Sheet”), and will deliver to Sellers such
Closing Date Balance Sheet, together with a calculation of (i) the
Aggregate Working Capital as of the close of business immediately preceding the
Closing Date (the “Closing Date Working Capital”) calculated in accordance with
Section 2.3(a), (ii) the Net Funded Indebtedness as of the close of
business immediately preceding the Closing Date (the “Closing Date Net Funded
Indebtedness”), (iii) any variance between the amount used for calculation
of the Inbursa Additional Amount in Closing Proceeds pursuant to Section 2.2
and the Inbursa Additional Amount actually paid by or on behalf the Cinemex
Companies (the “Inbursa Adjustment”), and (iv) the Interim Period Capital
Expenditures (the “Closing Date Interim Period Capital Expenditures” and,
together with the Closing Date Net Funded Indebtedness, the Closing Date
Working Capital and  the Inbursa Adjustment,
the “Closing Date Balance Sheet Calculations”). 
Each of the Closing Date Balance Sheet Calculations will be expressed in
pesos and converted to United States dollars at the Applicable Exchange
Rate.  Sellers shall be entitled to
review the Closing Date Balance Sheet and the Closing Date Balance Sheet
Calculations.

 

(c)           Unless Sellers notify
Buyers of their objection to the Closing Date Balance Sheet or the Closing Date
Balance Sheet Calculations within 30 days after delivery thereof to Sellers, specifying
any disputed items in reasonable detail (a “Notice of Objection”), such Closing
Date Balance Sheet and Closing Date Balance Sheet Calculations shall be final
and binding on the parties.  If Sellers
deliver a Notice of Objection, the parties shall meet and attempt to resolve
all of the disputed items contained in the Notice of Objection.  If the parties are unable to resolve all
disputed items within 30 days of the delivery of the Notice of Objection, the
parties shall promptly retain Ernst & Young LLP, or if Ernst &
Young LLP is unable or unwilling to perform the tasks contemplated hereby, any
other firm of independent public accountants mutually satisfactory to the
parties, or if no such mutually acceptable firm of independent public
accountants is designated by the parties or accepts its appointment within 60
days of its appointment, the firm of independent public accountants designated
by the Secretary General of the International Chamber of Commerce (the “Independent
Accountant”) solely to determine whether the disputed items regarding the
Closing Date Balance Sheet or the Closing Date Balance Sheet Calculations have
been determined, in each case, in accordance with this Section 2.3 and, 

 

14

 

if the Independent Accountant determines that
any of the disputed items have not been so determined, what, if any,
adjustments should be made so that they are determined in accordance with this Section 2.3.  The Independent Accountant shall be
instructed to make such determinations regarding the remaining disputed items
and to issue its written report to the parties within 60 days of its
retention.  Buyers and Sellers (in each
case, considered jointly), shall each bear fifty percent (50%) of the fees and
expenses of the Independent Accountant. 
Buyers and Sellers shall agree to jointly indemnify and hold the
Independent Accountant harmless to the extent the foregoing is required by the
Independent Accountant as a condition to the acceptance of its
appointment.  The report of the
Independent Accountant shall be final and binding on the parties.

 

(d)           Within fifteen Business
Days after the final determination of the Closing Date Balance Sheet
Calculations:

 

(i)          Regarding Aggregate
Working Capital:

 

(A)          if (1) the Closing
Date Working Capital is greater than (2) the Estimated Working Capital,
then Buyers will pay on a dollar for dollar basis to Sellers such excess,
according to each Seller’s Percentage; and

 

(B)           if (1) the Closing
Date Working Capital is less than (2) the Estimated Working Capital, then
Sellers will pay on a dollar for dollar basis to Buyers such deficit.

 

(ii)         Regarding Interim Period
Capital Expenditures:

 

(A)          if (1) the Closing
Date Interim Period Capital Expenditures are greater than (2) the Estimated
Interim Period Capital Expenditures, then Buyers will pay on a dollar for
dollar basis to Sellers such excess, according to each Seller’s Percentage; and

 

(B)           if (1) the Closing
Date Interim Period Capital Expenditures are less than (2) the Estimated Interim
Period Capital Expenditures, then Sellers will pay on a dollar for dollar basis
to Buyers such deficit.

 

(iii)        Regarding Closing Date Net
Funded Indebtedness:

 

(A)          if (1) the Closing
Date Net Funded Indebtedness is greater than (2) the Estimated Net Funded 

 

15

 

Indebtedness, then Sellers will pay on a
dollar for dollar basis to Buyers such excess, according to each Seller’s
Percentage; and

 

(B)           if (1) the Closing
Date Net Funded Indebtedness is less than (2) the Estimated Net Funded
Indebtedness, then Buyers will pay on a dollar for dollar basis to Sellers such
deficit.

 

(iv)        Regarding the Inbursa
Adjustment:

 

(A)          if the Inbursa
Adjustment indicates that the Inbursa Additional Amount was more than the amount
included in the calculation of Closing Proceeds, then Sellers, jointly and
severally, will pay on a dollar for dollar basis to Buyers such difference,
according to each Seller’s Percentage; and

 

(B)           if the Inbursa
Adjustment indicates that the Inbursa Additional Amount was less than the
amount included in the calculation of Closing Proceeds, then Buyers will pay on
a dollar for dollar basis to Sellers such difference.

 

2.4.          CLOSING

 

The closing (the “Closing”) of the purchase and sale of the Shares provided
for in this Agreement will take place at the offices of Ritch Mueller, S.C.
commencing at 10:00 a.m. (Mexico City time) on the last day of the month
in which all the conditions precedent set forth in Sections 6 and 7 (other than
those conditions which by their nature can only be satisfied at the Closing,
but subject to the satisfaction thereof) have been satisfied or waived to the
extent permitted by Applicable Law (or if such date is not a Business Day, the
following Business Day) provided that if such last day occurs earlier than ten
Business Days following the day on which the Antitrust Approval is obtained,
then the Closing will take place on the last day of the month immediately
following the month in which all the conditions precedent set forth in Sections
6 and 7 (other than those conditions which by their nature can only be
satisfied at the Closing, but subject to the satisfaction thereof) have been
satisfied or waived to the extent permitted by Applicable Law, or at such other
time and place as the parties may agree.

 

2.5.          CLOSING OBLIGATIONS

 

(a)           As promptly as
reasonably practicable after receiving Antitrust Approval, Buyers shall deliver
to Sellers a notice that Antitrust Approval has been obtained specifying the
expected Closing Date determined in accordance with Section 2.4.

 

16

 

(b)           Buyers shall use Best
Efforts to deliver to Sellers at least six Business Days before the Closing an
amendment or waiver executed by all requisite parties to the Inbursa Loan
Agreements to the effect, among other things, (x) that the consummation of
the transactions contemplated by this Agreement shall not constitute an “Event
of Default” (Caso de Incumplimiento) under Section 6.01(n) of
each Inbursa Loan Agreement or (y) that the requisite parties to the
Inbursa Loan Agreement (other than the Cinemex Companies and their affiliates)
(the “Inbursa Lender Parties”) waive the exercise of any and all remedies in
connection with the occurrence of an “Event of Default” (Caso de
Incumplimiento) under Section 6.01(n) of each Inbursa Loan
Agreement in connection with the consummation of the transactions contemplated
by this Agreement on terms reasonably satisfactory in substance and form to
Buyers and Sellers (the “Inbursa Amendment or Waiver”); provided, however,
that the Buyers shall be deemed to have satisfied the foregoing requirements if
the Inbursa Lender Parties are unwilling or unable to execute or deliver the
Inbursa Agreement or Waiver; and provided, further, that
notwithstanding anything to the contrary in the Agreement, Buyers shall not be
required to consent or agree to any investment, modification or supplement to
the Inbursa Loan Agreements other than solely to give effect to the Inbursa
Loan Agreements, or to the making of any payment by Buyers, their respective
affiliates or the Cinemex Companies in connection therewith.  If Buyers determine that Buyers will not
deliver the Inbursa Amendment or Waiver to Sellers at least six Business Days
before Closing, Buyers shall deliver to Sellers as promptly as reasonably
practicable a notice to the effect that Buyers will not so deliver the Inbursa
Amendment or Waiver.

 

(c)           Two Business Days
before the Closing:

 

(i)          Sellers will deliver to
Buyers or to Buyers’ designee(s) a schedule reflecting the Estimated
Working Capital, Estimated Net Funded Indebtedness, the Estimated Interim
Period Capital Expenditures and the other components of the Closing Proceeds
calculation under Section 2.2;

 

(ii)         Sellers will deliver to
Buyers wiring instructions for payment of the Closing Proceeds; and

 

(iii)        If Buyers deliver notice
pursuant to Section 2.5(b) to the effect that the Inbursa Amendment
and Waiver will not be delivered at least six Business Days prior to the
Closing, Sellers will use Best Efforts to obtain from the Administrative Agent
under the Inbursa Loan Agreements 

 

17

 

and deliver to Sellers at least two Business
Days prior to the Closing one or more payoff letters in customary form and
otherwise in substance and form reasonably satisfactory to Buyers and Sellers
(the “Inbursa Payoff Letter”) from each agent and lender under the Inbursa Loan
Agreements specifying separately (i) the amount of principal under each
Inbursa Loan Agreement, (ii) interest accrued and to accrue from the first
day of the interest period (Período de Intereses)
(as defined in each Inbursa Loan Agreement) in effect on the date on which the
Closing Date occurs (through the Closing Date) (the sum of the amounts referred
to in clauses (i) and (ii), the “Inbursa Repayment Amount”), (iii) all
other amounts payable under the Inbursa Loan Agreements (the “Inbursa
Additional Amount”) necessary to discharge and terminate the Cinemex Companies
from all their obligations under the Inbursa Loan Agreement on the Closing
Date, stating that any notice required under the Inbursa Loan Agreement to make
such prepayment is waived and stating that upon the payment of the amounts
referred to in clauses (i), (ii) and (iii) above, each Inbursa Loan
Agreements shall terminate and all obligations thereunder shall be discharged,
and (iv) all liens and encumbrances securing the obligations under the
Inbursa Loan Agreements are released, terminated and deregistered; provided,
however, that the Inbursa Payoff Letter shall not impose on the Cinemex
Companies, the Buyers or any of their respective affiliates any obligation or
condition that is not expressly contemplated by the Inbursa Loan Agreements as
in effect on the day hereof.  If Sellers
determines that Sellers will not deliver the Inbursa Payoff Letter at least two
Business Days prior to the Closing, Sellers shall deliver to Buyers a notice as
promptly as reasonably practicable to the effect that Sellers will not so
deliver the Inbursa Payoff Letter.

 

(d)           At the Closing:

 

(i)          Sellers will deliver to
Buyers or Buyers’ designee(s):

 

(A)          (i) Certificates
representing the Cinemex Common Shares, each duly endorsed (endoso en propiedad) and delivered to and
in the name of the applicable Buyer (as set forth on Schedule 2.1), as well as
copies, certified by the Secretary of the Board of Directors or Sole
Administrator of the Cinemex Companies, as applicable, of the appropriate
entries made in the capital stock registry books of the 

 

18

 

Cinemex Companies, where applicable,
reflecting the transfer of the Cinemex Common Shares for the benefit of the
Buyers and their designee(s); provided, however, that one or more
certificates representing a single share of the Shares will, if necessary, be
delivered to and in the name of a designee of Buyers previously identified in
writing to Sellers by Buyers in order to comply with the requirement under
Mexican law that each sociedad anónima
must have at least two (2) shareholders; and (ii) copy, certified by
the Secretary of the Board of Managers or the Sole Manager of Symphony, as
applicable, of the appropriate entries made in the partners registry book of
Symphony, evidencing the transfer of the Symphony Company Interest for the
benefit of the Buyers and their designee(s);

 

(B)           a certificate executed
by Sellers setting forth that the conditions set forth in Sections 6.1 and 6.2
have been satisfied;

 

(C)           notarized copies of the
shareholders’ meeting resolutions of each of the Cinemex Companies, conditional
upon consummation of the Closing, pursuant to which the respective shareholders
have approved the resignation and appointment of members of the Board of
Directors of the Cinemex Companies, as well as the resignation of such other
officers and managing directors as designated in writing by Buyers, coupled
with agreed upon releases and waivers executed by the applicable individuals
and Cinemex Company(ies), and the revocation and granting of powers of attorney
to and from the individuals as designated in writing by Buyers, and the
approval for the sale of the Cinemex Common Shares;

 

(D)          notarized copies of the
unanimous partners’ resolutions of Symphony, conditional upon consummation of
the Closing, pursuant to which the respective partners have approved the
resignation and appointment of members of the board of managers of Symphony, as
well as the resignation of such other officers and managing directors as
designated in writing by Buyers, coupled with agreed upon releases and waivers
executed by the applicable individuals and Symphony, and the 

 

19

 

revocation and granting of powers of attorney
to and from the individuals as designated in writing by Buyers, and the
approval for the sale of the Symphony Company Interest;

 

(E)           resignations, effective
as of the Closing Date, of the members of the Board of Directors (or Board of
Managers, as applicable) of (i) Symphony, the Target Company and Cadena
Mexicana de Exhibicion, S.A. de C.V., and (ii) such other directors and
officers of each of the Cinemex Companies as directed by Buyers, respectively,
containing releases substantially in the form of Exhibit C; and

 

(F)           if Buyers have not
delivered to Sellers the Inbursa Amendment or Waiver prior to the Closing and
Sellers have not delivered to Buyers the Inbursa Payoff Letter, then, subject
to Sellers having complied with the notice requirement set forth in the last
sentence of Section 2.5(c)(iii) and the implementation of the Cinemex
Capitalization, Sellers shall cause the Cinemex Companies to make arrangements
reasonably satisfactory to the Buyers regarding the prepayment under the
Inbursa Loan Agreements of all amounts payable thereunder and the termination
and discharge in full of the obligation of the Cinemex Companies under the
Inbursa Loan Agreements.

 

The transactions contemplated by clauses (A),
(B), (C), (D) and (E) above shall occur substantially concurrently
but in the chronological order contemplated by Section 2.1;

 

(ii)         Buyers will:

 

(A)          deliver to Sellers the
Closing Proceeds in United States dollars, in accordance with the wiring
instructions delivered by Sellers under Section 2.5(c)(ii);

 

(B)           deliver to Sellers a
certificate executed by Buyers setting forth that the conditions set forth in
Sections 7.1 and 7.2 have been satisfied; and

 

(C)           unless Buyers have
delivered to Sellers the Inbursa Amendment or Waiver, (1) if Sellers have
delivered 

 

20

 

the Inbursa Payoff Letter at least two
Business Days prior to Closing, Buyer will cause the Inbursa Repayment Amount
and the Inbursa Additional Amount to be paid to the administrative agents under
the Inbursa Loan Agreements on behalf of the Cinemex Companies in accordance
with Inbursa Payoff Letter, or (2) if Sellers have not delivered the
Inbursa Payoff Letter at least two Business Days prior to Closing and have
satisfied the notice requirement contemplated by the last sentence of Section 2.5(c)(iii),
Buyers shall provide evidence reasonably satisfactory to Sellers that Buyers
provided or have available funds, or made arrangements reasonably satisfactory
to Sellers with respect to funds (the “Cinemex Capitalization”), that, when
added to the Cinemex Companies’ Cash and Cash Equivalents after giving effect
to the Closing, is sufficient to pay the Inbursa Repayment Amount and the
Inbursa Additional Amount and within three Business Days following the Closing
Date, the Buyers shall cause such funds to be applied to the prepayment of the
Inbursa Prepayment Amount.

 

(iii)        Notwithstanding anything
to the contrary in this Agreement, the provisions contemplated by Sections
2.2(b), 2.3(b)(iii), 2.3(d)(iv), 2.5(c)(iii), 2.5(d)(i)(F) and 2.5(d)(ii)(c) shall
cease to apply and Buyers shall not be deemed to have Breached any such
provisions if at any time prior to or at the Closing the Buyers deliver to
Sellers a copy of the Inbursa Amendment of Waiver.

 

3.             REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Each Seller hereby, severally and jointly with each other Seller,
represents and warrants to Buyers as follows:

 

3.1.          ORGANIZATION

 

Part 3.1
of the Disclosure Statement contains a complete and accurate list for each
Cinemex Company of its name and its place of incorporation (if different from
Mexico).  Except as set forth in Part 3.1
of the Disclosure Statement, each Cinemex Company is a corporation duly
organized and validly existing under the laws of Mexico, with full corporate
power and authority to conduct its business as it is now being conducted, to
own or use the properties and assets that it purports to own or use, and to
perform all its obligations under Applicable Contracts.

 

21

 

3.2.          AUTHORITY; NO CONFLICT

 

(a)           The execution, delivery
and performance of this Agreement and the Transaction Documents to which such
Seller is a party and the consummation or performance by such Seller of the
Contemplated Transactions has been duly authorized by all necessary action on
the part of such Seller.  This Agreement
and the Transaction Documents to which such Seller is a party each constitutes
the legal, valid and binding obligation of such Seller, enforceable against
such Seller in accordance with its terms, except
as such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to creditors’ rights generally, and (ii) general principles of equity
(whether applied in a proceeding at law or in equity).  Such Seller has the power and authority to
execute and deliver this Agreement and the Transaction Documents to which it is
a party and to perform its obligations hereunder and thereunder.

 

(b)           Except as set forth in Part 3.2
of the Disclosure Statement, neither the execution and delivery by such Seller
of this Agreement and the Transaction Documents to which each Seller is a party
nor each Seller’s consummation or performance of any of the Contemplated
Transactions will, directly or indirectly:

 

(i)          contravene, conflict
with, or result in a violation of (A) any provision of the Organizational
Documents of the Cinemex Companies, Symphony and the Sellers, or (B) any
resolution adopted by the Board of Directors (or Board of Managers, as
applicable) or the stockholders (or partners, as applicable) of any Cinemex
Company, Symphony and the Sellers;

 

(ii)         contravene, conflict with,
or result in a violation of any material Mexican Legal Requirement or any
material Order to which any Cinemex Company, Symphony or Sellers, or any of the
assets owned or used by any Cinemex Company or Symphony may be subject;

 

(iii)        contravene, conflict with,
or result in a violation of any material Mexican Governmental Authorization
that is held by any Cinemex Company; or

 

(iv)        contravene, conflict with,
or result in a breach of any provision of, or give any Person the right to (A) terminate
or receive any payment or other compensation under any Applicable Contract
listed in Part 3.14(a) of the Disclosure Statement or (B) seek
specific performance regarding any 

 

22

 

Contract to which such Seller is a party or
any of the assets or property owned or used by it is bound that would restrict
the ability of the Sellers to consummate the Contemplated Transactions.

 

Except for authorization or non-objection from the Mexican Federal
Competition Commission and as set forth in Part 3.2 of the Disclosure
Statement, no Seller nor any Cinemex Company is or will be required to give any
notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement and the Transaction Documents to which
any of the Sellers is a party or the consummation or performance of any of the
Contemplated Transactions.

 

3.3.          CAPITALIZATION

 

(a)           The issued and
outstanding equity securities or instruments of each of the Cinemex Companies
is set forth in Part 3.3 of the Disclosure Statement.  Sellers are and will be on the Closing Date
the record and beneficial owners and holders of the Shares as set forth in Part 3.3
of the Disclosure Statement.  Except as
set forth in Part 3.3 of the Disclosure Statement solely with respect to
the date of this Agreement, no Encumbrance affects any equity securities of any
Cinemex Company.  All of the outstanding
equity securities of each Cinemex Company have been duly authorized and validly
issued and are fully paid and nonassessable. 
There are no Contracts relating to the issuance, sale, or transfer of
any equity securities or other securities of any Cinemex Company, except for
preemptive rights that are mandatory under Mexican law.  Except for Buyers’ rights pursuant to this
Agreement, there are no issued and outstanding (A) securities of any
Cinemex Company other than as set forth in Part 3.3 of the Disclosure
Statement, or (B) warrants, preemptive rights, other rights, or options
with respect to any securities of the Target Company.  No Cinemex Company owns, or has any Contract
to acquire, any equity securities or other securities of or investment in any
Person (other than Cinemex Companies) or any direct or indirect equity or
ownership interest in or investment in any other Person or business.

 

(b)           All issued and
outstanding capital stock of each Cinemex Company and each of their respective
subsidiaries is represented by stock certificates duly issued by such Cinemex
Company or such subsidiary and existing pursuant to Mexican Applicable Law and
such Cinemex Company’s or subsidiary’s Organizational Documents and such stock
certificates (other than stock certificates representing the Shares) are held
by the applicable agent as security for the obligations under the Inbursa Loan
Agreements.

 

23

 

3.4.          FINANCIAL STATEMENTS

 

(a)           Sellers have delivered
to Buyers:  (i) the unaudited
consolidated balance sheet of the Cinemex Companies, prepared under Mexican NIF
as at August 31, 2008 (the “Balance Sheet”), and the related unaudited
consolidated statements of income and cash flow, as of and for the period then
ended, and (ii) a consolidated balance sheet of the Cinemex Companies as
at December 31, 2007 and the related audited consolidated statements of
income, changes in stockholders’ equity, and cash flow for the fiscal year then
ended, together with the report thereon of independent certified public
accountants, including notes thereto. 
Such financial statements fairly present the financial condition and the
results of operations, changes in stockholders’ equity, and cash flow of the
Cinemex Companies as at the respective dates of and for the periods referred to
in such financial statements, all in accordance with Mexican NIF, subject, in
the case of the financial statements referred to in clause (i) above, to
normal year-end adjustments where applicable.

 

(b)           Except for (i) liabilities
or obligations identified in Part 3.4 of the Disclosure Statement, (ii) liabilities
or obligations reflected on the Balance Sheet, (iii) other liabilities
incurred after August 31, 2008 in the Ordinary Course of Business, or (iv) liabilities
and obligations that are accounted for in connection with the working capital
calculation and post-closing adjustments contemplated by Section 2.3,
there are no undisclosed liabilities or obligations relating to any Cinemex
Company of any nature, whether or not required to be disclosed or reflected on
a balance sheet prepared in a manner consistent with the Balance Sheet.

 

(c)           Notwithstanding the
provisions of Section 3.4(b), no liability or obligation that is the
subject matter of a specific representation and warranty set forth in Section 3
shall constitute a Breach of Section 3.4(b) for the purposes of Section 8
unless the applicable specific representation and warranty has been Breached.

 

3.5.          BOOKS AND RECORDS

 

The books of account, minute books, stock and special registries, and
other applicable records of the Cinemex Companies and Symphony, all of which
have been made available to Buyers, are complete and correct in all material
respects and have been maintained in accordance with Applicable Law.  Except as set forth on Part 3.5 of the
Disclosure Statement, at the Closing, all of those books and records are in the
possession of the Cinemex Companies and Symphony.

 

24

 

3.6.          TITLE TO PROPERTIES; ENCUMBRANCES

 

Part 3.6 of the Disclosure Statement contains a complete and
accurate list of all real estate property and leaseholds owned by any Cinemex
Company.  Sellers have made available to
Buyers copies of the deeds and other instruments by which the Cinemex Companies
acquired or leased such real estate property and other interests.  The Cinemex Companies own (with title under applicable
law in the case of real estate property, subject only to the matters permitted
by the following sentence) all the properties and assets (whether real estate
property, personal property or mixed and whether tangible or intangible) that
they purport to own.  Except as set forth
in Part 3.6 of the Disclosure Statement, all properties and assets owned
by Sellers are free and clear of all Encumbrances (other than assets having as
of the Closing Date, individually or in the aggregate, a fair market value of
$7’500,000 pesos or less and Permitted Encumbrances)  and
are not, in the case of real estate property, subject to any rights of way,
building use restrictions, or limitations of any nature except, with respect to
all such properties and assets, (a) liens for current Taxes not yet due, (b) Encumbrances,
none of which is substantial in amount, materially detracts from the value or
materially impairs the use of the property subject thereto, or materially
impairs the operations of any Cinemex Company, and (c) with respect to
real estate property, zoning laws that do not impair the present or anticipated
use of the property subject thereto (“Permitted Encumbrances”).  All buildings, plants and structures owned by
the Cinemex Companies lie wholly within the boundaries of the real estate
property owned or leased by the Cinemex Companies and do not encroach upon the
property of, or otherwise materially conflict with the property rights of any
other Person.  Part 3.6 of the
Disclosure Statement also sets forth a list of the properties of each Cinemex
Company in which as of the date hereof (i) construction works are being
conducted on behalf of each such Cinemex Company for the development,
maintenance or remodeling of a theatre (other than minor construction works
carried-out in the Ordinary Course of Business), or (ii) each such Cinemex
Company operates, directly or indirectly, a theatre.

 

3.7.          CONDITION AND SUFFICIENCY OF ASSETS

 

The buildings and equipment owned and/or used by the Cinemex Companies
are, to Sellers’ Knowledge, structurally sound, are in good operating condition
and repair, reasonable wear and tear excepted, and are adequate for the uses to
which they are being put.  The buildings
and equipment of the Cinemex Companies are sufficient and constitute all assets
and properties that are necessary for the continued conduct of the Cinemex
Companies’ businesses after the Closing in substantially the same manner as
conducted prior to the date of this Agreement.

 

3.8.          TAXES

 

(a)           The Cinemex Companies
and Symphony have filed or caused to be filed all material Tax Returns that are
or were required to be filed by or with respect to any of them, either
separately or as a member of a group of corporations, pursuant to applicable
Legal Requirements.  Sellers have delivered
or made available to Buyers copies of all such Tax Returns filed 

 

25

 

since January 1, 2004.  The Cinemex Companies and Symphony have paid,
or made provision for the payment of, all Taxes that have become due pursuant
to those Tax Returns or otherwise, or pursuant to any assessment received by
any Cinemex Company or Symphony, except such Taxes, if any, as are listed in Part 3.8
of the Disclosure Statement and are being contested in good faith and as to
which adequate reserves (determined in accordance with Mexican NIF) have been
provided in the Balance Sheet.

 

(b)           No Cinemex Company or
Symphony has been informed in writing of any pending audit relating to any
Cinemex Company or Symphony or any Tax Return of any Cinemex Company or
Symphony.

 

(c)           The charges, accruals,
and reserves with respect to Tax liabilities that exceed $10’000,000 pesos,
individually or in the aggregate, on the books of the Cinemex Companies and
Symphony are adequate (determined in accordance with Mexican NIF) and fairly
represent the Cinemex Companies’ and Symphony’s liability for accrued
Taxes.  There exists no written proposed
tax assessment (or, to the Sellers’ Knowledge, any other proposed tax
assessment within the last 12 months) against any Cinemex Company or Symphony
except as disclosed in the Balance Sheet or in Part 3.8 of the Disclosure
Statement.  All Taxes that any Cinemex
Company or Symphony is or was required by any Legal Requirements to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Body or other Person.

 

(d)           All Tax Returns filed
by (or that include on a consolidated basis) any Cinemex Company or Symphony,
as amended, are true, correct and complete in all material respects.

 

(e)           Except as set forth in Part 3.8
of the Disclosure Statement, no written claim (or, to the Sellers’ Knowledge,
any other claim within the last 12 months) has been made against any Cinemex
Company or Symphony by any authority in a jurisdiction where any Cinemex
Company or Symphony does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction in any material respect, since January 1,
2004.

 

(f)            None of the Cinemex
Companies or Symphony is a party to, bound by, or has any obligation under, any
Tax sharing agreement, Tax indemnification agreement or similar contract or
arrangement.

 

3.9.          NO MATERIAL ADVERSE CHANGE

 

Since December 31, 2007, there has not been any Material Adverse
Change that is continuing.

 

26

 

3.10.        EMPLOYEE BENEFITS

 

(a)                                  Except as provided by law or as set forth
in Part 3.10 of the Disclosure Statement, none of the Cinemex Companies is
a party to or bound by (i) any Contracts with any of the members of the
Board of Directors of any Cinemex Company; or (ii) any bonus, severance
pay, profit sharing, pension, retirement, stock purchase, stock option,
insurance (including life, retirement, medical, dental or other insurance), or
other material plans, fringe benefit or any other employee benefit plan,
relating to any Cinemex Company, except for the payment of bonuses, deferred
compensation, severance amounts or fringe benefits to individual employees in
the Ordinary Course of Business that are determined or made on an individual
basis and are not generally available to (and which, to Sellers’ Knowledge, do
not create any obligation to) other employees or groups of employees of any
Cinemex Company (collectively, the “Plans”). 
With respect to each Plan, true, correct and complete copies of each
material document related to such Plan (including agreement, trust and
insurance contract) have been made available or have been delivered to Buyers.

 

(b)                                 Each Cinemex Company has performed and
complied in all material respects with all of its obligations under and with
respect to the Plans, subject to such exceptions as would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse
Change, and each of the Plans has, at all times, in form, operation and
administration complied in all material respects with its terms and all other
applicable Mexican Legal Requirements.

 

(c)                                  Part 3.10 of the Disclosure Statement
contains a true, correct and complete copy of the Success Bonus Program and
sets forth the maximum aggregate amount actually paid or required to be paid as
of the date hereof by the Cinemex Companies under the Success Bonus Program
opposite the name of the recipient thereof.

 

3.11.        COMPLIANCE WITH MEXICAN LEGAL REQUIREMENTS; MEXICAN
GOVERNMENTAL AUTHORIZATIONS

 

(a)                                  Except
as set forth in Part 3.11 of the Disclosure Statement or as would not,
individually or in the aggregate, be reasonably expected to cause a Material
Adverse Change:

 

(i)          each
Cinemex Company and Symphony is, and at all times since January 1, 2006,
has been, in compliance with each Mexican Legal Requirement that is or was
applicable to it or to the conduct or operation of its business or the
ownership, possession, or use of any of its assets;

 

27

 

(ii)         no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may constitute or result in a violation by any Cinemex Company or
Symphony of, or a failure on the part of any Cinemex Company or Symphony to
comply with, any Mexican Legal Requirement; and

 

(iii)        neither any Cinemex
Company nor Symphony has received, at any time since January 1, 2006, any
notice or other written communication from any Mexican Governmental Body or any
other Person regarding any actual, alleged, possible or potential violation of,
or failure to comply with, any Mexican Legal Requirement.

 

(b)           Except as set forth in Part 3.11
of the Disclosure Statement, each Cinemex Company and Symphony holds all Mexican
Governmental Authorizations required to be held by such Cinemex Company and
Symphony (and such Mexican Governmental Authorizations are valid and in full
force and effect), except where the failure to hold such Mexican Governmental
Authorizations would not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Change.  Except as set forth in Part 3.11 of the
Disclosure Statement, or as would not, individually or in the aggregate, be
reasonably expected to result in a Material Adverse Change:

 

(i)          each Cinemex Company and
Symphony is, and at all times since January 1, 2006, has been, in full
compliance with all of the terms and requirements of each Mexican Governmental
Authorization held by such Cinemex Company or Symphony, as applicable; and

 

(ii)         neither any Cinemex
Company nor Symphony has received, at any time since January 1, 2006, any
notice or other written communication from any Mexican Governmental Body or any
other Person regarding (A) any actual, alleged or possible violation of
any term or requirement of any Mexican Governmental Authorization held by such
Cinemex Company or Symphony, as applicable, or (B) any actual, proposed or
possible revocation, withdrawal, suspension or termination of any Mexican
Governmental Authorization held by such Cinemex Company or Symphony, as
applicable.

 

28

 

3.12.        LEGAL PROCEEDINGS; ORDERS

 

(a)           Except as set forth in Part 3.12
of the Disclosure Statement, there is no pending Proceeding:

 

(i)          that has been commenced
by or against any Cinemex Company or Symphony claiming an amount in excess of
$25’000,000 pesos or that purports or seeks a judgment or award limiting or
restricting any of the Cinemex Companies or Symphony or any of their Related
Persons from conducting their respective businesses or engaging in any line of
business or that would reasonably be expected to result in a Material Adverse
Change to any Cinemex Company or Symphony; or

 

(ii)         that challenges, or that
would reasonably be expected to prevent or materially delay, any of the
Contemplated Transactions or that may adversely affect the ability of Sellers
to perform their obligations hereunder.

 

To Sellers’ Knowledge, no such Proceeding has been Threatened.  Sellers have delivered to Buyers true,
correct and complete copies of all pleadings, correspondence, and other
documents relating to each Proceeding listed in Part 3.12 of the
Disclosure Statement.

 

(b)           Except as set forth in Part 3.12
of the Disclosure Statement:

 

(i)          each Cinemex Company and
Symphony is in full compliance with all of the terms and requirements of each
material Order to which it, or any of the assets owned, leased, or used under
legal title by it, is or has been subject, subject to such exceptions which would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change; and

 

(ii)         no Cinemex Company or
Symphony has received, at any time since January 1, 2006, any notice or
other communication from any Mexican Governmental Body regarding any actual,
alleged, possible or potential violation of, or failure to comply with, any
term or requirement of any material Order to which any Cinemex Company or
Symphony, or any of the assets owned or used under legal title by any Cinemex
Company or Symphony, is or has been subject, which would, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Change.

 

29

 

(c)                                  The
reserves for possible losses relating to litigation reflected on the Balance
Sheet were established and were maintained at all times in accordance with
Mexican NIF.

 

3.13.        ABSENCE OF CERTAIN CHANGES AND EVENTS

 

Except as set
forth in Part 3.13 of the Disclosure Statement or as otherwise provided in
this Agreement or required by applicable Legal Requirements or Mexican Legal
Requirements, the Cinemex Companies have conducted their businesses only in the
Ordinary Course of Business and there has not been:

 

(a)                                  since
the date of the Balance Sheet, any change in any Cinemex Company’s authorized
or issued capital stock; grant of any stock option or right to purchase shares
of capital stock of any Cinemex Company; issuance of any security convertible
into such capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;

 

(b)                                 since
the date of the Balance Sheet, any amendment to the Organizational Documents of
any Cinemex Company;

 

(c)                                  since
December 31, 2007, any payment or increase by any Cinemex Company of any
bonuses, salaries, or other compensation to any stockholder, director, officer
or employee (except for payment at the rates in effect on the date of the
Balance Sheet, or except in the Ordinary Course of Business), or entry into any
employment, severance or similar Contract with any director, officer or
employee;

 

(d)                                 since
December 31, 2007, any adoption of, or increase in the payments to or
benefits under, any Plan;

 

(e)                                  since
the date of the Balance Sheet, any damage to or destruction or loss of any
asset or property of any Cinemex Company, whether or not covered by insurance,
which would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change;

 

(f)                                    since
the date of the Balance Sheet, any entry into, termination of, or receipt of
written notice of termination of, (i) any license, sales representative,
joint venture, credit or lease agreement, or (ii) any Contract or
transaction involving a total remaining commitment by or to any Cinemex Company
of at least $5’000,000 pesos (excluding film Contracts, screen advertising
Contracts having a duration of less than one year, internet provider Contracts
and, solely in the case of the entering into of Contracts, the other Contracts
disclosed on Part 3.14(a) of the Disclosure Statement);

 

30

 

(g)           since the date of the
Balance Sheet, any sale (other than sales of inventory in the Ordinary Course
of Business and sales or other dispositions of equipment deemed obsolete or no
longer necessary to the business of any Cinemex Company), lease or other
disposition of any asset or property having a value of more than $5’000,000
pesos of any Cinemex Company or mortgage, pledge or imposition of any
Encumbrance on any asset or property having a value of more than $5’000,000
pesos of any Cinemex Company, including the sale, lease or other disposition of
any material intellectual property;

 

(h)           since December 31,
2007, any cancellation or waiver of any claims or rights with, to Sellers’
Knowledge, a value to any Cinemex Company in excess of $5’000,000 pesos; or

 

(i)            since December 31,
2007, any change in the accounting methods used by any Cinemex Company, except
as required by Mexican NIF.

 

3.14.        CONTRACTS; NO DEFAULTS

 

(a)           Part 3.14(a) of
the Disclosure Statement contains a complete and accurate list, and Sellers
have, in the case of written Contracts, made available to Buyers true, correct
and complete copies, of:

 

(i)          each Applicable Contract
that involves performance of services or delivery of goods or materials by one
or more of the Cinemex Companies of an amount or value in excess of $5’000,000
pesos (excluding Contracts that are terminable at any time by giving not more
than 30 days prior written notice by a Cinemex Company without penalty or cost
to the Cinemex Companies in excess of $5’000,000 pesos);

 

(ii)         each Applicable Contract
that was not entered into in the Ordinary Course of Business and that involves
expenditures or other liabilities and/or receipts of one or more of the Cinemex
Companies in excess of $5’000,000 pesos (excluding Contracts that are
terminable at any time by giving not more than 30 days prior written notice by
a Cinemex Company without penalty or cost to the Cinemex Companies in excess of
$5’000,000 pesos);

 

(iii)        each loan agreement,
promissory note, letter of credit or other Applicable Contract evidencing
Funded Indebtedness or any guarantee or similar obligation of any Cinemex
Company with respect to Funded Indebtedness or any other 

 

31

 

similar payment obligation of any Person
(other than any Cinemex Company);

 

(iv)        each lease, rental or
occupancy agreement, license, and conditional sale agreement, and other
Applicable Contract affecting the ownership of, leasing of, title to, use of,
or any interest as lessee or other similar interest in, any real or personal
property (except any personal property lease having payments of less than $5’000,000
pesos and with a term of less than one (1) year);

 

(v)         each licensing agreement
or other Applicable Contract involving payment or receipt of more than $5’000,000
pesos with respect to patents, trademarks, copyrights, or other intellectual
property, other than (x) any licensing agreements or other Applicable
Contracts entered into by any Cinemex Company in the Ordinary Course of
Business that primarily relate to the exhibition by such Cinemex Company of a
particular motion picture or (y) “shrink-wrap” or other software licenses
generally available from commercial vendors or retailers which do not require
ongoing royalty payments;

 

(vi)        each collective bargaining
agreement with any labor union;

 

(vii)       each joint venture and
other similar Applicable Contract (however named) involving a sharing of
profits or losses, by any Cinemex Company with any other Person, excluding
Contracts entered into in the Ordinary Course of Business by a Cinemex Company;

 

(viii)      each Applicable Contract
containing covenants that purport to restrict the business activity of or
engagement in any business activities by any Cinemex Company or any of its
affiliates;

 

(ix)         each Applicable Contract
providing for payments to or by any Person based on sales, purchases, or
profits, other than direct payments for goods, excluding Contracts entered into
in the Ordinary Course of Business by a Cinemex Company;

 

(x)          each Applicable Contract
under which a Cinemex Company is committed as of the date of this Agreement,
for individual Capital Expenditures in excess of $5’000,000 pesos or aggregate
Capital Expenditures in excess of $10’000,000 pesos;

 

32

 

(xi)         each consulting or other
similar Applicable Contract with consultants of any Cinemex Company remaining
in effect after the Closing Date and which are not terminable at the will of
the applicable Cinemex Company without cost or liability to any Cinemex
Company; and

 

(xii)        all other Applicable
Contracts that are material to the business of the Cinemex Companies and that
are outside the Ordinary Course of Business.

 

(b)           Except as set forth in Part 3.14(b) of
the Disclosure Statement:

 

(i)          each Cinemex Company is,
and at all times since January 1, 2006 has been, in compliance in all
material respects with all material terms and requirements of each Contract
identified on Part 3.14(a) of the Disclosure Statement;

 

(ii)         no event has occurred or
circumstance exists that (with or without notice or lapse of time) would
reasonably be expected to contravene, conflict with, or result in a violation
or breach of, or give (x) any Person other than a Cinemex Company or (y) to
Sellers’ Knowledge, any Cinemex Company the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Contract identified on Part 3.14(a) of
the Disclosure Statement; and

 

(iii)        there are no pending
renegotiations of, current attempts to renegotiate, or outstanding rights to
renegotiate any material terms and conditions or amounts greater than $5’000,000
pesos paid or payable to any Cinemex Company under any of the Contracts
identified on Part 3.14(a) of the Disclosure Statement with any
Person and no such Person has made written demand for such renegotiation.

 

(c)           The Sellers have made
available to Buyer true, correct and complete copies of all written Applicable
Contracts referred to in Section 3.14(a) and the Dávila Separation
Agreement together, in each case, with all amendments, modifications and
supplements thereto.

 

(d)           Symphony is not a party
to or is bound by any contract, agreement, instrument or other document except
for Symphony’s Organizational Documents.

 

33

 

3.15.        INSURANCE

 

Part 3.15
of the Disclosure Statement contains a complete list of all of the Cinemex
Companies’ policies of insurance in effect as of the date hereof.  All of such policies are in full force and
effect, and there is no default (in respect of which any applicable grace or
cure period shall have expired or lapsed) with respect to any provision
contained in any such policy.  Sellers
have delivered or made available copies of all such policies to Buyers.  Except as set forth in Part 3.15 of the
Disclosure Statement, there are no overdue and unpaid premiums or claims, and
no retroactive or retrospective premium adjustments with respect to such
policies, and no written notice of cancellation or nonrenewal has been received
by any Cinemex Company with respect to, or disallowance of any claim under, any
such policy.

 

3.16.        EMPLOYEES

 

Part 3.16 of the Disclosure Statement contains a list of the
names, positions, seniorities, salaries and labor benefits of all employees of
the first two levels of Cinemex Companies (including employees of companies
rendering personnel services to the Cinemex Companies) with an annual salary in
excess of $600,000 pesos as of September 30, 2008.

 

3.17.        LABOR RELATIONS; COMPLIANCE

 

(a)                                  Except
as set forth in Part 3.17 of the Disclosure Statement, no Cinemex Company
is a party to any collective bargaining or other similar labor Contract and, as
of the date of execution of this Agreement, none of the Cinemex Companies is
negotiating with the unions mentioned in Part 3.17 of the Disclosure
Statement or any other unions any matters different from those arising from and
necessary under any such Contract as modified in the Ordinary Course of
Business.

 

(b)                                 Except
as set forth in Part 3.17 of the Disclosure Statement, since January 1,
2006, there has not been, there is not presently pending or existing, and to
Seller’s Knowledge, there is not Threatened (i) any strike or work stoppage proceeding;
or (ii) any Proceeding against any Cinemex Company relating to the alleged
violation of any Mexican Legal Requirement pertaining to labor relations or
employment matters of a collective nature against any of the Cinemex Companies.

 

(c)                                  Each
Cinemex Company has substantially complied with all material Mexican Legal
Requirements relating to employees and employment.  Except as disclosed on Part 3.17 of the
Disclosure Statement, no Cinemex Company is liable for the payment of any
compensation, fines, penalties or other amounts, however 

 

34

 

designated, for failure to comply with any of
the foregoing material Mexican Legal Requirements.

 

3.18.        INTELLECTUAL PROPERTY

 

Each Cinemex Company owns or possesses rights to use all licenses,
copyrights, copyright applications, patents, patent rights, patent
applications, trademarks, trademark rights, trade names, trade name rights and
rights with respect to the foregoing which are required to conduct its business
as currently conducted (collectively, “Intellectual Property Assets”) in each
case free and clear of any Encumbrances.  Parts 3.14(a)(v) and 3.18 of
the Disclosure Statement set forth a complete list of all material Intellectual
Property Assets.  Except as set forth in Part 3.18
of the Disclosure Statement, to Sellers’ Knowledge, no event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any of the Intellectual Property Assets, and no Cinemex
Company is liable, for an amount of more than $5’000,000 pesos, to any Person
for infringement under applicable Mexican Legal Requirements with respect to
any of the Intellectual Property Assets as a result of its business operations.

 

3.19.        CERTAIN PAYMENTS

 

Since December 31, 2007, no Cinemex Company or director or officer
of any Cinemex Company, or to Sellers’ Knowledge, any employee, agent or other
Person acting for or on behalf of any Cinemex Company, has directly or
indirectly made any payments, gifts or rebates (whether in cash, property or
services) to any Person in violation of Mexican Legal Requirements, except in
either case for payments, gifts or rebates (whether in cash, property or
services) which, if discontinued subsequent to the Closing, would not,
individually or in the aggregate, be reasonably expected to result in a
Material Adverse Change.

 

3.20.        RELATIONSHIPS WITH RELATED PERSONS

 

(a)                                  Except
as set forth in Part 3.20 of the Disclosure Statement, no director or
officer of any Cinemex Company, or to Sellers’ Knowledge, any Related Person of
such director or officer has, or is an owner of, or since January 1, 2006
has owned (of record or as a beneficial owner) an equity interest or any other
financial or profit interest in, a Person that has, (i) had material
business dealings or a material financial interest in any transaction with any
Cinemex Company other than business dealings or transactions conducted in the
Ordinary Course of Business with the Cinemex Companies at substantially
prevailing market prices and on substantially prevailing market terms and
conditions, or (ii) engaged in the business of (a) developing, owning
or operating motion picture theatres or exhibiting motion pictures in Mexico,
or (b) within the vicinity of any motion picture theatre owned or operated
by any Cinemex Company, selling food, snacks or 

 

35

 

concession services (in either case, a “Competing
Business”), except for the direct or indirect ownership of less than five
percent of the outstanding capital stock of any Competing Business (or Person
that directly or indirectly owns such interest in a Competing Business) that is
publicly traded on any recognized exchange or in the over-the-counter market.

 

(b)           Except as set forth in Part 3.20
of the Disclosure Statement, there are no outstanding amounts payable to, or
receivable from, or advances by any of the Sellers or any Related Person of any
of the Sellers to, and none of the Sellers or any Related Person is otherwise a
creditor or debtor to, any of the Cinemex Companies, and none of the Sellers or
any Related Person thereof is a party to any transaction or agreement with any
of the Cinemex Companies.

 

3.21.        BROKERS OR FINDERS

 

Except for the obligations of Sellers’ ultimate parent corporation, AMC
Entertainment Holdings, Inc., related to its retention of Credit Suisse
Securities (USA) LLC as its exclusive financial advisor in connection with the
Contemplated Transactions, Sellers and their agents have incurred no obligation
or liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with this Agreement.

 

3.22.        REPRESENTATIONS CONCERNING SYMPHONY

 

(a)           Symphony is a limited
liability partnership (sociedad de
responsabilidad limitada de capital variable) duly incorporated and
validly existing under the laws of Mexico with full power and authority to own
its properties and assets and to perform all its obligations under Applicable
Contracts.

 

(b)           The issued and
outstanding equity interest (partes sociales)
of Symphony as of the date of this Agreement is set forth in Part 3.22 of
the Disclosure Statement.  Sellers are
and will be on the Closing Date the record and beneficial owners and holders of
the Symphony Company Interest as set forth in Part 3.22 of the Disclosure
Statement.  Except as set forth in Part 3.22
of the Disclosure Statement solely with respect to the date of this Agreement,
no Encumbrance affects any Symphony Company Interest.  Except for Buyers’ rights pursuant to this
Agreement, there are no issued and outstanding (A) securities of Symphony
other than the Symphony Company Interest, or (B) warrants, preemptive
rights, other rights, or options with respect to any securities of
Symphony.  Symphony does not own, or has
any Contract to acquire, any equity securities or other securities of or
investment in any Person (other than Cinemex Companies) or any 

 

36

 

direct or indirect equity or ownership
interest in or investment in any other Person or business.

 

(c)           Symphony has not
incurred any indebtedness or any other obligation or liability of any nature
that is outstanding as of the Closing Date.

 

(d)           Symphony does not own,
is not in possession of or does not have the obligation to acquire, any asset
or property other than as set forth in Part 3.22 of the Disclosure
Statement.

 

(e)           Symphony has no
employees and is not a party to any arrangement with any Person providing for
the rendering of services to Symphony.

 

(f)            The only business
activity of Symphony as of the Closing Date is maintaining certain shares of
capital stock of the Cinemex Companies as set forth in Part 3.22 of the
Disclosure Statement and has not engaged in any other commercial or business
activity.

 

4.             REPRESENTATIONS AND WARRANTIES OF BUYERS

 

Each Buyer hereby, severally and jointly, represents and warrants to
Sellers as follows:

 

4.1.          ORGANIZATION AND GOOD STANDING

 

Entretenimiento is a Mexican  sociedad anónima de capital variable, duly organized,
validly existing and in good standing under the laws of Mexico with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under each Contract to which it is a
party.  Entretenimiento has delivered to
Sellers copies of their Organizational Documents as currently in effect.

 

4.2.          AUTHORITY; NO CONFLICT

 

(a)           The execution, delivery
and performance of this Agreement and the Transaction Documents to which such
Buyer is a party and the consummation or performance by such Buyer of the
Contemplated Transactions have been duly authorized by all necessary action on
the part of such Buyer.  This Agreement
and the Transaction Documents to which such Buyer is a party each constitutes
the legal, valid and binding obligation of such Buyer, enforceable against such
Buyer in accordance with its terms, except
as such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to creditors’ rights generally, and (ii) general principles of equity
(whether applied in a proceeding at law or in 

 

37

 

equity).  Such Buyer has the power and authority to
execute and deliver this Agreement and the Transaction Documents to which it is
a party and to perform its obligations hereunder and thereunder.  In the case of Buyers that are natural
persons, each such Buyer is a citizen of Mexico and has the legal capacity to
execute and deliver this Agreement and the Transaction Documents to which he or
she is a party.

 

(b)           Except as set forth in
Schedule 4.2, neither the execution and delivery by such Buyer of this
Agreement and the Transaction Documents to which each Buyer is a party nor each
Buyer’s consummation or performance of any of the Contemplated Transactions
will give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:

 

(i)          any provision of Buyers’
Organizational Documents;

 

(ii)         any resolution adopted by
the board of directors or the stockholders of Buyers;

 

(iii)        any Legal Requirement or
Order to which any Buyer may be subject; or

 

(iv)        any Contract to which any
Buyer is a party or by which any Buyer may be bound.

 

Except for authorization or non-objection from the Mexican Federal
Competition Commission and as set forth in Schedule 4.2, no Buyer will be
required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement and the
Transaction Documents to which it is a party or the consummation or performance
of any of the Contemplated Transactions.

 

4.3.          CERTAIN PROCEEDINGS

 

There is no pending Proceeding that has been commenced against any
Buyer that challenges, or may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the Contemplated Transactions or
that may adversely affect the ability of any Buyer to perform its obligations
hereunder.  To Buyers’ Knowledge, no such
Proceeding has been Threatened.

 

4.4.          BROKERS OR FINDERS

 

Buyers and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payment in connection with this Agreement.

 

38

 

4.5.          AVAILABLE FUNDS

 

Buyers will have, on the Closing Date, sufficient funds available to
perform all of their obligations under this Agreement, including, without
limitation, to make the payments required under Section 2.5(d)(ii).

 

5.             COVENANTS

 

5.1.          ACCESS AND INVESTIGATION

 

Between the date of this Agreement and the Closing Date, Sellers will,
and will cause each Cinemex Company and its Representatives to, (a) afford
Buyers and their Representatives and prospective lenders and agreed upon
financing sources and their Representatives (collectively, “Buyers’ Advisors”)
reasonable access during normal business hours to each Cinemex Company’s
personnel, properties, Contracts, books and records, and other documents and
data, and (b) make available to Buyers and Buyers’ Advisors copies of all
such Contracts, books and records, and other existing documents and data as
Buyers may reasonably request.

 

5.2.          OPERATION OF BUSINESSES

 

Between the date of this Agreement and the Closing Date, unless
otherwise consented to by Buyers in writing, Sellers will, and will cause each
Cinemex Company to:

 

(a)           conduct the business of
the Cinemex Companies only in the Ordinary Course of Business;

 

(b)           in addition to Interim
Period Capital Expenditures and Capital Expenditures relating to construction
works in the theaters known as Cinemex Jacarandas and Cinemex San Antonio, make
Capital Expenditures relating to the Cinemex Business for an amount not less
individually or in the aggregate than $4’000,000 pesos and not exceeding
individually or in the aggregate $8’000,000 pesos, during each calendar month;
and

 

(c)           use their Best Efforts
to preserve intact the current business organization of the Cinemex Companies,
keep available the services of the current officers and employees of the
Cinemex Companies, and maintain the relations and goodwill with suppliers,
customers, landlords, creditors, and others having business relationships with
the Cinemex Companies.

 

5.3.          NEGATIVE COVENANTS

 

(a)           Except as otherwise
expressly permitted by this Agreement, between the date of this Agreement and
the Closing Date, Sellers 

 

39

 

will not, and Sellers will cause each Cinemex
Company not to, without the prior written consent of Buyers:

 

(i)          take any affirmative action,
or fail to take any reasonable action, as a result of which any of the changes
or events listed in Section 3.13 is reasonably likely to occur;

 

(ii)         pay, discharge or satisfy
any Funded Indebtedness other than the payment, discharge or satisfaction of
such Funded Indebtedness upon maturity, when otherwise due (including interest
payments) or as agreed upon in connection with the Contemplated Transactions;

 

(iii)        take or omit to take any
action with respect to Taxes if such action or omission is reasonably likely to
have the effect of increasing the Tax liability of the Cinemex Companies
(without also increasing the income or profit reported for financial accounting
purposes) for a tax period after the Closing Date;

 

(iv)        settle any litigation that
is reasonably likely to provide for liability to any Cinemex Company after the
Closing;

 

(v)         enter into, acknowledge
or consent to any agreement or instrument that amends, revokes, supersedes or
otherwise modifies, or that purports to amend, revoke, supersede or otherwise
modify in any respect the provisions of the Dávila Separation Agreement, the
Success Bonus Program or any Inbursa Loan Agreement without the prior written
consent of Buyer;

 

(vi)        make, or commit to make,
any payment to any Person in connection with the transactions contemplated
hereby other than pursuant to the Success Bonus Program as in effect on the
date hereof;

 

(vii)       amend, modify or supplement
the Success Bonus Program in a manner that would increase the aggregate amount
of the payments available thereunder;

 

(viii)      enter into any new
employment agreement with Alma Rosa Garcia regarding her promotion to Chief
Executive Officer in April 2008, but nothing in this Agreement shall
prohibit the Cinemex Companies from granting and paying increased compensation
to her reflective of such promotion, which amounts have been mutually agreed 

 

40

 

between the Cinemex Companies and Ms. Garcia
and which have been disclosed to Buyers;

 

(ix)         take, or commit to take,
any action from the close of business on the day immediately preceding the
Closing Date to the time at which the Closing occurs that would not be
accounted or adjusted for in connection with the Purchase Price adjustment
contemplated by Section 2.2; or

 

(x)          take any action or fail
to take any action, that if taken or failed to be taken, as applicable, would
result in any of the representations and warranties of the Sellers contemplated
by Section 3.22 not to be true and correct.

 

(b)           Notwithstanding
anything to the contrary in this Agreement, between the date hereof and the
Closing, (i) Sellers and their affiliates may take the actions described
in Part 5.3(b) of the Disclosure Statement (the “Sellers Structuring
Transactions”) and (ii) the Cinemex Companies may take the actions
described in Part 5.3(b) of the Disclosure Statement.

 

5.4.          REQUIRED APPROVALS

 

(a)           As promptly as
practicable after the date of this Agreement, the parties hereto will prepare
all filings and forms and make all filings required by Legal Requirements to be
made by them to consummate the Contemplated Transactions, including filings
required to be made with the Mexican Federal Competition Commission under the
Federal Law of Economic Competition of Mexico (as amended, the “Mexican Federal
Competition Law”).  Between the date of
this Agreement and the Closing Date, the parties hereto will (a) reasonably
cooperate with one another in obtaining all Consents identified in Part 3.2
of the Disclosure Statement and in Schedule 4.2, (b) reasonably cooperate
with one another with respect to all forms and filings that any party hereto
elects to make or is required by Legal Requirements to make in connection with
the Contemplated Transactions (including providing any and all necessary information),
and (c) comply promptly with any inquiries or requests for additional
information from the Mexican Federal Competition Commission and promptly
provide any supplemental information requested in connection with the filings
made hereunder pursuant to the Mexican Federal Competition Law.

 

(b)           In furtherance and not
in limitation of the efforts referred to above in this Section 5.4, if any
objections are asserted with respect to the Contemplated Transactions under the
Mexican Federal 

 

41

 

Competition Law or other applicable antitrust
or competition laws (collectively, “Antitrust Laws”), or if any action is
instituted (or threatened to be instituted) by the Mexican Federal Competition
Commission or any other Governmental Body or third party challenging the
Contemplated Transactions or that would otherwise prohibit or materially impair
or materially delay the consummation of the Contemplated Transactions, Sellers
and Buyers shall use their Best Efforts to resolve any such objections or
actions so as to permit the consummation of the Contemplated Transactions.
Without limiting the foregoing, the parties hereto agree to (i) give each
other reasonable advance notice of all meetings with any Governmental Body
relating to any Antitrust Laws, (ii) give each other an opportunity to
participate in each of such meetings except to the extent confidential
information of the Buyers or any of its affiliates is intended to be discussed
in such meetings, (iii) to the extent practicable, give each other
reasonable advance notice of all substantive oral communications with any
Governmental Body relating to any Antitrust Laws, (iv) if any Governmental
Body initiates a substantive oral communication regarding any Antitrust Laws,
promptly notify the other parties hereto of the substance of such communication
(but excluding any confidential information of Buyers or the Cinemex Companies
or any of their respective affiliates), (v) provide each other with a
reasonable advance opportunity to review and comment upon all written
communications (including, without limitation, any analyses, presentations,
memoranda, briefs, arguments, opinions and proposals, but excluding any
confidential information of Buyers or their affiliates) with a Governmental
Body regarding any Antitrust Laws and (vi) provide each other with copies
of all written communications to or from any Governmental Body relating to any
Antitrust Laws, but excluding any confidential information of Buyers or their
affiliates.  Any such disclosures or
provision of copies by one party hereto to another may be made on an outside
counsel basis if appropriate.

 

5.5.          SUPPLEMENTS TO DISCLOSURE STATEMENT

 

Prior to the Closing, the Sellers shall supplement or amend the
Disclosure Statement with respect to any matter (a) which may arise
hereafter and which, if existing or occurring at or prior to the date hereof,
would have been required to be set forth or described in the Disclosure
Statement or (b) which makes it necessary to correct any information in
the Disclosure Statement or in any representation and warranty of the parties
herein.  Notwithstanding the foregoing,
for purposes of determining the accuracy of the representations and warranties
of the parties contained in this Agreement, the Disclosure Statement shall be
deemed to include only that information contained therein on the date of this
Agreement and shall be deemed to exclude any information contained in any
subsequent supplement or amendment thereto.

 

42

 

5.6.          NO NEGOTIATION

 

Until such time, if any, as this Agreement is terminated pursuant to Section 9,
Sellers will not, and will cause each Cinemex Company and each of their
Representatives not to, directly or indirectly solicit, encourage or initiate
any inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any inquiries or proposals
from, any Person (other than Buyers) relating to any transaction involving the
sale of the business or assets (other than in the Ordinary Course of Business)
of any Cinemex Company, or any of the capital stock of any Cinemex Company, or
any merger, consolidation, business combination, or similar transaction
involving any Cinemex Company.  Each
Seller shall, and shall cause its Related Persons to, discontinue and terminate
immediately any discussions or negotiations with any Person with respect to any
sale, transfer or other disposition of any capital stock of or equity interest
in the Cinemex Companies or any of their assets or properties (other than in
the Ordinary Course of Business).

 

5.7.          BEST EFFORTS

 

Between the date of this Agreement and the Closing Date, Sellers will
use their Best Efforts to cause the conditions in Section 6 to be satisfied
and Buyers will use their Best Efforts to cause the conditions in Section 7
to be satisfied.

 

5.8.          RELEASE OF CURRENT OFFICERS AND DIRECTORS

 

After the Closing, Buyers agree that to the extent permitted by
Applicable Law, they will (and will cause the Target Company to) release and
waive any rights against each Cinemex Company director and officer that
resigned in connection with the Contemplated Transactions (the “Releasees”)
against any liabilities arising out of or pertaining to acts or omissions
(other than illegal acts), or alleged acts or omissions carried out in the
legal fulfillment of their duties, related to (i) the fact that such
Releasee was a director or officer of any Cinemex Company or (ii) matters
existing, resolved or undertaken prior to the Closing, whether asserted or
claimed prior to, at or after the Closing, to the fullest extent permitted by
applicable Legal Requirements.  Buyers
and Sellers hereby agree to reflect releases and waivers herein contemplated in
the minutes of any shareholders’ meetings of the Target Company and Cadena
Mexicana de Exhibición S.A. de C.V. held on or before the Closing Date.

 

5.9.          NONCOMPETITION; NONSOLICITATION

 

(a)           Subject to the following provisions
of this Section 5.9, until the third anniversary of the Closing Date,
Sellers shall not (acting individually or together), and each such Person shall
cause its respective affiliates not to, directly or indirectly (or by any other
means having a purpose or effect of circumventing or rendering inapplicable the
provisions of this Section 5.9), engage in any business that competes,
directly or indirectly, with the Cinemex Business in the Applicable
Territory.  Notwithstanding the foregoing,  (i) for
purposes of this Section 5.9(a), the Related Persons of Sellers shall
exclude the stockholders of AMC Entertainment Holdings, Inc. and their
affiliates (other than AMC Entertainment 

 

43

 

Holdings, Inc. and its subsidiaries) and
(ii) nothing in this Section 5.9(a) shall restrict AMC
Entertainment Holdings, Inc. or one or more of its subsidiaries from
having an ownership interest in a Person that is not incorporated in or
organized under the laws of Mexico that operates a Competing Business in the
Applicable Territory if the Person in which such ownership interest is held
does not derive 50% or more of its consolidated gross revenues from the
operation of the Competing Business in the Applicable Territory.

 

(b)           Prior to the second anniversary of
the Closing Date, the Sellers shall not (acting individually or together), and
each such Person shall cause its Related Persons not to, directly or indirectly
(or by any other means having a purpose or effect of circumventing or rendering
inapplicable the provisions of this Section 5.9), solicit or offer
employment to any employee of any Cinemex Company without the prior written
consent of the Buyers.

 

(c)           The parties hereto acknowledge and
agree that the restrictive covenants and other agreements contained in this Section 5.9
are an essential part of this Agreement and the transactions contemplated
hereunder, and it is the intention of the parties hereto that if any of the
restrictions or covenants contained in this Section 5.9 are held to cover
a geographic area or to be for a length of time that is not permitted by
Applicable Law, or is in any way construed to be too broad or to any extent
invalid, such restriction or covenant shall not be construed to be null, void
or of no effect, but, to the extent such restriction or covenant would then be
valid or enforceable under Applicable Law, such provision shall be construed
and interpreted or reformed to provide for a restriction or covenant having the
maximum enforceable geographic area, time period and other provisions as shall
be valid and enforceable under Applicable Law.

 

5.10.        PURCHASE BY MEXICAN INDIVIDUALS

 

Entretenimiento shall assign its right under
this Agreement to purchase the Cinemex Common Shares to one or more individuals
that are citizens of Mexico prior to Closing, in which case such individuals
shall be deemed to be parties to this Agreement and shall be “Buyers” for all
purposes of this Agreement.

 

5.11.        BOOKS AND RECORDS

 

Sellers will deliver all minute books and stock record books of the
Cinemex Companies and Symphony not in possession of a Cinemex Company or
Symphony to Entretenimiento at the Closing, if any.

 

5.12.        WITHHOLDING

 

On or prior to the Closing Date, Sellers shall appoint a
legal representative in Mexico for tax purposes that complies with the
requirements of Article 208 of the Mexican Income Tax Law, and shall
deliver a true and complete copy of such appointment to Buyers.

 

44

 

Each Seller hereby represents and warrants to Buyers that it
is a resident, for tax purposes, in a country with which Mexico has entered
into a Convention for the Avoidance of Double Taxation which is in force as of
the Closing Date.

 

Within five days after the date on which each Seller or its
legal representative is obligated, pursuant to the Mexican Income Tax Law and
its Regulations, to file with the applicable Mexican Taxing Authority either (i) the
corresponding accountant’s tax report relating to the sale of the Shares, or (ii) the
notice through which Seller informs the applicable Mexican Taxing Authority of
the appointment of a legal representative in Mexico in terms of Article 208
of the Mexican Income Tax Law  for the
sale of the Shares contemplated herein to be exempt pursuant to the relevant
convention for the avoidance of double taxation, each Seller shall provide to
Buyers a true and complete copy of the documentation filed with the Mexican
Taxing Authority.

 

As a result, Buyers shall not be required to withhold any
Taxes from the Purchase Price, which Taxes, if due, Sellers (through their
legal representative appointed pursuant to Article 208 of the Mexican
Income Tax Law) shall be required to pay and each of the Sellers hereby
releases Buyers from Buyers’ obligation to withhold and pay any such Taxes.

 

5.13.        CERTAIN ACTIONS

 

(a)           The parties shall and shall cause each of their respective affiliates,
officers, directors, employees, agents and other representatives to afford the
other party and its affiliates all cooperation reasonably requested by such
party that is necessary, proper and advisable in connection with obtaining the
Inbursa Payoff Letter, the Inbursa Amendment or Waiver, and effecting the
Cinemex Capitalization, including the negotiation, execution and delivery of
the definitive agreements with respect to thereof.

 

(b)           Buyer shall cause the Cinemex Companies to draw on any facility or other
arrangement evidencing the Cinemex Capitalization and cause the proceeds from
the Cinemex Capitalization to be used only for purposes of repaying the Inbursa
Repayment Amount.

 

(c)           Within five Business Days of the date of this Agreement, Buyers shall
deliver to Sellers a copy of shareholders resolutions ratifying this Agreement
and the Contemplated Transactions.

 

6.             CONDITIONS PRECEDENT TO BUYERS’ OBLIGATION TO CLOSE

 

Buyers’ obligation to purchase the Shares and to take the other actions
required to be taken by Buyers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Buyers, in whole or in part):

 

45

 

6.1.          ACCURACY OF REPRESENTATIONS

 

Each of the representations and warranties of Sellers contained in this
Agreement or in any document or instrument delivered in connection herewith
shall be true and correct in all material respects (disregarding all qualifications
and exceptions contained therein relating to materiality or the occurrence or
possible occurrence of any Material Adverse Change) when made and on and as of
the Closing Date (except for those representations and warranties that relate
to a particular date, which representations and warranties shall be true and
correct as of such date), provided that this Section 6.1 shall be
deemed satisfied so long as all failures of such representations and warranties
(other than the representations contained in Sections 3.1, 3.2, 3.3, 3.9 and
3.22) to be true and correct (disregarding all such qualifications as
aforesaid), taken together, would not reasonably be expected to (i) have a
Material Adverse Change or (ii) materially impede or delay the ability of
Buyers to consummate the Contemplated Transactions.

 

6.2.          SELLERS’ PERFORMANCE

 

(a)           Sellers shall have
performed or complied with, in all material respects, all agreements and
covenants required to be performed or complied with by Sellers under this
Agreement at or prior to the Closing Date.

 

(b)           Each document and
certificate required to be delivered pursuant to Section 2.5(d)(i) must
have been delivered.

 

6.3.          CONSENTS

 

Each of the Consents identified in Part 3.2 of the Disclosure
Statement, and each Consent identified in Schedule 4.2, shall have been
obtained and shall be in full force and effect.

 

6.4.          ANTITRUST APPROVAL

 

The Mexican Federal Competition Law shall have authorized the
Contemplated Transactions or thirty five (35) Business Days shall have elapsed
following the submission by Buyers to the Mexican Federal Competition
Commission of any and all required information in respect of the Contemplated
Transactions without the Mexican Federal Competition Commission having issued a
written communication objecting to the transaction; provided, however,
that in the latter case, the condition shall be deemed satisfied once all term
extensions granted or ordered by the Mexican Federal Competition Commission
have lapsed (the “Antitrust Approval”).

 

6.5.          NO ORDER

 

No Order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Contemplated
Transactions shall be in effect.

 

46

 

6.6.          NO PROCEEDINGS

 

There shall be no pending Proceeding that would reasonably be expected
to prevent or materially delay the Contemplated Transactions.

 

6.7.          NO PROHIBITION

 

There shall be no Legal Requirement which prohibits the consummation of
the Contemplated Transactions.

 

6.8.          DELIVERABLES

 

Sellers shall have taken all actions and delivered all documents and
instruments required to be taken and delivered by the Sellers pursuant to Section 2.5.

 

6.9.          RELEASE

 

AMC Entertainment Inc. shall have caused the termination of, and
irrevocable and unconditional discharge in full of, all obligations and
liabilities of the Target Company and Cadena Mexicana de Exhibicion, S.A. de
C.V. (“CME”) under that certain Credit Agreement, dated as of January 26,
2006 (the “AMC Credit Agreement”), among AMC Entertainment Inc., the Target
Company, CME and the lenders party thereto, and the Peso Commitment (as defined
therein) shall have been terminated and the release, termination and
deregistration of all Encumbrances on any capital stock of Symphony securing
the obligations under the AMC Credit Agreement shall have occurred.

 

7.             CONDITIONS PRECEDENT TO SELLERS’  OBLIGATION TO CLOSE

 

The Sellers’ obligation to sell the Shares and Sellers’ obligations to
take the actions required to be taken by them at the Closing are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Sellers, in whole or in part):

 

7.1.          ACCURACY OF REPRESENTATIONS

 

Each of the representations and warranties of Buyers contained in this
Agreement shall be true and correct in all material respects (disregarding all
qualifications and exceptions contained therein relating to substantiality or
to materiality) when made and on and as of the Closing Date (except for those
representations and warranties that relate to a particular date, which
representations and warranties shall be true and correct as of such date), provided
that this Section 7.1 shall be deemed satisfied so long as all failures of
such representations, and warranties (other than the representations contained
in Sections 4.1 and 4.2) to be true and correct (disregarding all such
qualifications, as foresaid), taken together, would not reasonably be expected
to (i) have a Buyer Material Adverse Change; provided, however,
that in determining whether there has been such a Buyer Material Adverse
Change, any adverse effect principally attributable to any of the following
shall be disregarded:  (A) general
political, economic,

 

47

 

business, industry or financial market
conditions; and (B) the taking of any action specifically required by this
Agreement or (ii) materially delay or impair the ability of Sellers to
consummate the Contemplated Transactions.

 

7.2.          BUYERS’ PERFORMANCE

 

(a)           Buyers shall have
performed or complied with, in all material respects, all agreements and
covenants required to be performed or complied with by Buyers under this
Agreement at or prior to the Closing Date.

 

(b)           Each document and each
certificate required to be delivered pursuant to Section 2.5(d)(ii) must
have been delivered.

 

7.3.          CONSENTS

 

Each of the Consents identified in Part 3.2 of the Disclosure
Statement and each of the Consents identified in Schedule 4.2 must have been
obtained and must be in full force and effect.

 

7.4.          ANTITRUST APPROVAL

 

The Antitrust Approval shall have been satisfied.

 

7.5.          NO ORDER

 

No Order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Contemplated
Transactions shall be in effect.

 

7.6.          NO PROCEEDINGS

 

There shall be no pending Proceeding that would reasonably be expected
to prevent or materially delay the Contemplated Transactions.

 

7.7.          NO PROHIBITION

 

There shall be no Legal Requirement which prohibits the consummation of
the Contemplated Transactions.

 

7.8.          DELIVERABLES

 

Buyers shall have taken all actions and delivered all documents and
instruments required to be taken and delivered by Buyers pursuant to Section 2.5.

 

48

 

8.             GENERAL INDEMNIFICATION OBLIGATIONS.

 

8.1.          DEFINITIONS

 

For purposes of this Section 8, the following terms have the
meanings set forth below:

 

(a)           “Buyer Indemnified
Parties” — means Buyers, their affiliates, and their directors, affiliates,
agents and employees;

 

(b)           “Fundamental Losses” —
means Losses arising out of or based upon the representations made by Sellers
in Sections 3.1, 3.2, 3.3 and 3.22 that are false, untrue or inaccurate when
made (or when deemed to have been made).

 

(c)           “Indemnified Party” —
as to any claim means any Person entitled to indemnification against such claim
pursuant to this Section 8.

 

(d)           “Indemnifying Party” —
as to any claim means any Person obligated to indemnify against such claim
pursuant to this Section 8.

 

(e)           “Loss” or “Losses” —
means losses, payments (whether in cash or in kind), claims, damages,
liabilities, obligations, penalties, judgments, awards, costs, expenses,
interest and disbursements (and any and all actions, suits, proceedings and
investigations in respect thereof, any amounts (whether in cash or in kind) in
settlement in respect of any of the foregoing and any and all legal and other
costs, expenses or disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise), including without limitation, the costs,
expenses and disbursements as and when incurred, of investigating, preparing or
defending any such action, suit, proceeding or investigation.  For the avoidance of doubt, the term “Losses”
shall not include, and the parties hereto hereby waive the rights to claim
special or punitive damages.

 

(f)            “Tax Losses” — means
Losses arising out of or based upon any representation made by Sellers in Section 3.8
that is false, untrue or inaccurate when made (or when deemed to have been
made).

 

(g)           “Broker Losses” — means
Losses arising out of or based upon the representation made by Sellers in Section 3.21
that is false, untrue or inaccurate when made (or when deemed to have been
made).

 

8.2.          SURVIVAL

 

All representations, warranties and pre-closing covenants made by the
parties in this Agreement or in any certificate, schedule, statement, document
or

 

49

 

instrument furnished hereunder or in
connection with negotiation, execution and performance of this Agreement will
survive the Closing for the period(s) provided in Section 8.5(d).

 

8.3.          INDEMNIFICATION BY
BUYERS

 

Each Buyer agrees to severally and jointly indemnify, defend and hold harmless
each Seller and their respective shareholders, directors, officers, affiliates,
agents, employees and advisors, from and against any and all Losses to the
extent such Losses result from, arise out of or are based upon: (i) any
representation set forth in Section 4 hereof being false or untrue when
made (or deemed to be made) or the Breach of any warranty set forth in Section 4;
or (ii) any Breach or default in performance by Buyers of any of their
covenants or agreements in this Agreement or pursuant hereto, including without
limitation, the payment of the Purchase Price.

 

8.4.          INDEMNIFICATION BY
SELLERS

 

The Sellers agree to severally and jointly indemnify and hold harmless
each Buyer Indemnified Party, from and against any and all Losses to the extent
such Losses result from, arise out of or are based upon: (i) any
representation made by such Seller in Section 3 hereof that is false,
untrue or inaccurate when made (or when deemed to have been made) by such
Seller or the Breach of any warranty made by such Seller in Section 3
hereof (provided, however, that, with respect to the
representations (excluding Section 3.9) qualified by materiality, Material
Adverse Change or similar qualifications, no Breach thereof shall be deemed to
have occurred if the Losses resulting therefrom can be measured adequately or
reasonably estimated in monetary terms and do not exceed, individually or in
the aggregate, US$2,000,000; provided, further, that if the
Losses resulting from such Breaches cannot be measured adequately or reasonably
estimated in monetary terms, the foregoing proviso shall not apply to such
Breaches); (ii) any Breach by such Seller of any of its respective
covenants or agreements in this Agreement or pursuant hereto; (iii) any
Losses of any Buyer Indemnified Party resulting from, arising out of or based
upon the AMC Credit Agreement or any agreement, document or instrument relating
thereto; (iv) without duplication of any amounts accounted for under
Sections 2.2 and 2.3, any Inbursa Additional Amount if neither the Inbursa
Amendment or Waiver nor the Inbursa Payoff Letter are delivered prior to the
Closing Date for any reason whatsoever, and (v) any Taxes imposed on,
asserted against, incurred by or paid by Symphony as a result of or in
connection with the actions taken or omissions by Sellers and their affiliates
in connection with Seller Structuring Transactions (irrespective of whether
such Taxes are properly or legally imposed or asserted).

 

8.5.          LIMITATIONS ON
INDEMNIFICATION

 

Notwithstanding any other
provision in this Agreement to the contrary:

 

(a)           Except as set forth in Section 12.17, the right to
indemnification under Sections 8.3 and 8.4 is the sole and exclusive remedy for
the Indemnified Parties for any Breach of any representation,

 

50

 

warranty, covenant, agreement
or duty of the applicable Indemnifying Parties (except to the extent arising
from the Indemnified Parties’ willful misconduct or from the Indemnified
Parties’ intentional Breaches) (i) under this Agreement or any Transaction
Document; (ii) in any schedule, certificate or other document delivered by
or on behalf of the Indemnified Parties under this Agreement; or (iii) otherwise
from or in connection with the Contemplated Transactions.

 

(b)           Sellers will have no liability with respect to the claims of Buyer
Indemnified Parties for indemnification under Section 8.4(i) until
the total of all Losses with respect to such matters exceeds US$2,000,000, in
which case Buyers will then be entitled to indemnification for all such Losses;
provided, that the foregoing limitation will not apply to Losses arising
under Sections 3.1, 3.2, 3.3, 3.21 and 3.22.

 

(c)           The aggregate liability
of Sellers with respect to the
claims of Buyer Indemnified Parties for indemnification under Sections 8.4(i) and
8.4(ii) shall be limited to:

 

(i)          US$25,000,000 with
respect to all Losses for which Buyer Indemnified Parties are entitled to
indemnification under Section 8.4(i) (other than Fundamental Losses, Tax Losses and Broker Losses);

 

(ii)         US$70,000,000 with
respect to Tax Losses, less all Losses included within Section 8.5(c)(i)
(the “Tax Loss Cap”);

 

(iii)        US$315,000,000 with
respect to Fundamental Losses; and

 

(iv)        the Closing Proceeds with
respect to Broker Losses and Losses for which the Buyer Indemnified Parties are
entitled to indemnification under Section 8.4(ii).

 

(d)           If the Closing occurs,
no party shall be entitled to any recovery unless a claim for indemnification
is made (i) in accordance with this Section 8 and before the date
that is (A) the 12 month anniversary of the Closing Date with respect to
Breaches for which Buyer Indemnified Parties are entitled to indemnification
under Section 8.4(i) other than Sections 3.1, 3.2, 3.3, 3.8, 3.17,
3.21 and 3.22; (B) the 24 month anniversary of the Closing Date for all
Breaches of Section 3.21; (C) the later of the 60 month anniversary
of the day on which the Cinemex Companies (i) are or were required to file
or (ii) effectively file the relevant Tax Return with the relevant
Governmental Body in Mexico for the tax period in which the Taxes were incurred
relating to a Pre-Closing or

 

51

 

Straddle Tax Period for all Breaches of Section 3.8
or Losses for which the Buyer Indemnified Parties are entitled to
indemnification under Section 8.4(v); (D) the 60 month anniversary of
the Closing Date for Breaches of Section 3.17; (E) at any time for
all Breaches of Sections 3.1, 3.2, 3.3 and 3.22; (F) at any time for
Losses for which the Buyer Indemnified Parties are entitled to indemnification
under Sections 8.4(iii) and 8.4(iv); (G) the 36 month anniversary of
the Closing Date for Losses for which the Buyer Indemnified Parties are
entitled to indemnification under Section 8.4(ii).

 

(e)           The amount of any Loss
for which indemnification is provided under this Section 8 shall be net of
any amounts actually recovered by the Indemnified Party under insurance
policies with respect to such Loss and shall be reduced to take account of any
Tax Benefit realized by the Indemnified Party arising from the incurrence or
payment of any such Loss; provided that the Indemnified Party will use
commercially reasonable efforts to recover amounts under insurance policies
with respect to such loss.

 

“Tax Benefit” means the amount by which the
tax liability of a corporation to the appropriate taxing authority is reduced
by deduction, credit or otherwise or the amount by which a refund of Taxes is
increased, provided that such reduction of tax liability or such refund
of Taxes is “realized” in the taxable year during which an indemnity payment is
made pursuant to this Agreement or in a taxable year prior to the year such
payment is made.  A Tax Benefit shall be
deemed to have been “realized” at the time of occurrence of the fact or event
giving rise to any refund of Taxes or at the time that a loss, deduction or
credit is incurred or allowed that results in reduction of Taxes that would
otherwise be due for that tax year or for a prior tax year; in the event any of
the Cinemex Companies has other losses, deductions, credits or similar items
available to it, losses, deductions, credits or such other items for which the
Sellers would be entitled to reduce its indemnification obligations pursuant to
this Agreement shall be treated as the last items utilized to produce a Tax
Benefit.

 

(f)            No Indemnified Party
shall be indemnified pursuant to this Agreement to the extent that such
Indemnified Party’s Losses are increased or extended by the willful misconduct,
violation of Applicable Law or bad faith of such Indemnified Party.

 

8.6.          INDEMNIFICATION
PROCEDURES

 

(a)           Each Indemnified Party
shall, promptly after the receipt of notice of a written threat or the
commencement of any action against such

 

52

 

Indemnified Party in respect of which
indemnity may be sought from an Indemnifying Party pursuant to this Section 8,
notify the Indemnifying Party in writing thereof, stating, to the extent known,
the name of the Person threatening or commencing such action and a brief
statement of the basis for any claim of indemnity for Losses.

 

(b)           The failure of any
Indemnified Party to so notify an Indemnifying Party of any such action shall
not relieve the Indemnifying Party from any liability except to the extent that
the rights of such Indemnifying Party are prejudiced by such failure, it being
understood that the Indemnifying Party is per se prejudiced if delivery of a
notice specifying in reasonable detail the basis for an indemnification claim
under this Section 8 is delivered after the time period set forth in Section 8.5(d).

 

(c)           With respect to any
action notified by an Indemnified Party to an Indemnifying Party in accordance
with this Section 8, the Indemnifying Party will be entitled to
participate therein, and, to the extent it may wish, to assume the defense
thereof with counsel reasonably satisfactory to such Indemnified Party, and
after written notice from the Indemnifying Party to such Indemnified Party of
its election so to assume the defense thereof, the Indemnifying Party will not
be liable to such Indemnified Party under this Section 8 for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation.

 

(d)           Upon making any payment
to an Indemnified Party for any indemnification claim for Losses pursuant to
this Section 8, the Indemnifying Party shall be subrogated, to the extent
of such payment, to any rights which the Indemnified Party may have against any
other parties with respect to the subject matter underlying such
indemnification claim.

 

(e)           The Indemnifying
Parties shall not settle any action for which an Indemnified Party is or may be
entitled to indemnification hereunder without the prior written consent of such
Indemnified Party, which consent will not be unreasonably withheld or delayed, provided
that the consent of the Indemnified Party shall not be required so long as the
settlement (i) only provides for the payment of monetary damages by the
Indemnifying Parties, (ii) does not restrict the conduct or business
activities of any of the Indemnified Parties and (iii) provides a complete
and full release from all liability to the Indemnified Party.

 

53

 

8.7.          TREATMENT OF INDEMNITY PAYMENTS

 

Buyers and
Sellers agree that any indemnity payments made pursuant to this Section 8
will be treated by the parties as an adjustment to the Purchase Price.

 

9.             TERMINATION

 

9.1.          TERMINATION EVENTS

 

This Agreement may, by notice given prior to or at the Closing, be
terminated:

 

(a)                                  by
either Buyers or Sellers if the Closing has not occurred (other than through
the failure of any party seeking to terminate this Agreement to comply in all
material respects with its obligations under this Agreement) on or before February 26,
2009, or such later date as the parties may agree upon (the “Outside Date”);

 

(b)                                 by
Buyers if a supplement to the Disclosure Statement by Sellers contains changes
or disclosure that, individually or in the aggregate with any other
supplements, has or would reasonably be expected to result in a Material
Adverse Change;

 

(c)                                  by
mutual consent of Buyers and Sellers; or

 

(d)                                 by
Sellers, if a resolution satisfactory to Sellers is not issued by the Mexican
Federal Competition Commission within 65 Business Days following the submission
by the parties of the required notification form(s).

 

9.2.          EFFECT OF TERMINATION

 

Each party’s
right of termination under Section 9.1 is in addition to any other rights
it may have under this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies.  If this Agreement is terminated pursuant to Section 9.1,
all further obligations of the parties under this Agreement will terminate,
except that the obligations in Sections 12.1, 12.3, 12.13 and 12.14, and
paragraphs (c), (d) and (e) of Section 12.17, will survive and
any liability arising from any intentional Breach; provided, however,
that if this Agreement is terminated by a party because one or more of the
conditions to the terminating party’s obligations under this Agreement is not
satisfied as a result of the other party’s failure to comply with its
obligations under this Agreement, the terminating party’s right to pursue all
legal remedies will survive such termination unimpaired.

 

10.           INTENTIONALLY OMITTED.

 

54

 

11.           TAX MATTERS

 

11.1.        TRANSFER TAXES

 

Other than income Taxes, all documentary, sales,
stamp, registration and other such similar Taxes and fees applicable under
Mexican law and incurred in connection with this Agreement, if any, shall be
paid by Buyers when due, and Buyers shall, at their own expense, file all
necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other similar Taxes
and fees, and if required by applicable law, Sellers shall, and shall cause
their Related Persons to, join in the execution of any such Tax Returns.

 

11.2.        PREPARATION OF TAX RETURNS

 

(a)           The Cinemex Companies
and Symphony shall, and Sellers shall cause the Cinemex Companies and Symphony
to, prepare and timely file or cause to be prepared and timely filed in a
manner consistent with past practice, all Tax Returns of, with respect to, or
including the Cinemex Companies and/or Symphony that are required to be filed
(taking into account extensions) on or before the Closing Date.  Sellers shall timely pay or cause to be
timely paid by the Cinemex Companies and Symphony all Taxes shown as due, or
required to be shown as due, on such Tax Returns.  Sellers shall be entitled to receive any
refund or credit reflected on such Tax Returns which is not received on or
before the Closing Date (a “Pending Refund”), as described in Section 11.3(e).

 

(b)           Buyers shall cause the
Cinemex Companies and Symphony to prepare and file all Tax Returns required to
be filed by or with respect to such Cinemex Companies and/or Symphony for all
Taxable Periods that (x) begin on or after January 1, 2008 and prior to the
Closing Date and (y) end on, before or after the Closing Date (including Tax
Returns for Straddle Periods), which Tax Returns have due dates (taking into
account extensions) after the Closing Date (the “Post-Closing Returns”).  To the extent that the parties have agreed to
the Tax treatment of specific items (including the provisions of this
Agreement), such Post-Closing Returns will be prepared consistent with such
agreement between the parties and otherwise in a manner consistent with Tax
Returns filed by the Cinemex Companies and Symphony prior to the Closing Date,
unless otherwise required by applicable Legal Requirements.  Sellers shall cooperate with Buyers and the
Cinemex Companies and Symphony in the preparation of Post-Closing Returns and
shall provide assistance as reasonably requested by Buyers.  In the case of a Post-Closing Return required
to be filed in Mexico by the Cinemex Companies and/or Symphony, including any
Tax Return for Mexican Income Tax filed on a consolidated basis for or
including the Cinemex Companies (“Mexican Consolidated Income Tax Return”), and
any

 

55

 

Tax Return for IETU or Mexican VAT required
and/or permitted to be filed under Mexican Legal Requirements (a “Mexican
Post-Closing Return”), Buyers shall use a person acceptable to Sellers, which
may be Felix Nunez Gamboa (“Gamboa”) if he is available on terms reasonably
acceptable to Buyers, to prepare such Mexican Post-Closing Return. Buyers will
provide Sellers with access to the books and records of the Cinemex Companies
and Symphony to the extent reasonably relevant to the preparation and review of
any Post-Closing Return.  Buyers shall
cause Cinemex Companies and Symphony to provide each Post-Closing Return to
Sellers at least twenty (20) days prior to filing such Post-Closing Return for
Sellers’ review and comment.  Such
Post-Closing Return shall be final and binding on the parties unless either
Sellers or Buyers deliver to the other a Notice of Objection within twenty (20)
days after delivery of the Post-Closing Return to Sellers.  Buyers and Sellers shall utilize the
procedures set forth in Section 2.3(c) to settle any disputed item
included in a Notice of Objection.

 

(c)           If
the Cinemex Companies are unable or otherwise fail to file a Mexican
Consolidated Income Tax Return for the Tax year ending December 31 of the
year of Closing, then prior to the following June 25th, Buyers
shall cause the Cinemex Companies to prepare and provide to Sellers a form of
Mexican Consolidated Income Tax Return for the period ending on the Closing
Date as if the Cinemex Companies were able to file a Mexican Consolidated Income
Tax Return, for Sellers’ review and comment. 
Subject to the provisions of Section 11.3 relating to resolution of
any disputed item, Buyers shall cause the Cinemex Companies to make such
revisions to such form of Mexican Consolidated Income Tax Return as are
reasonably requested by Sellers.  Any
refund or credit, or additional Tax due, as reflected on the final form of
Mexican Consolidated Income Tax Return, shall be substituted for the amounts of
refund or credit, or additional Tax due, as reflected on all Mexican Income Tax
Returns for the individual Cinemex Companies for purposes of applying Section 11.3,
and the amount of refund or credit shall be deemed received by the Cinemex
Companies on August 15 of the calendar year after Closing for purposes of
applying Section 11.3.

 

11.3.        TAX PAYMENTS AND REFUNDS

 

(a)           In
the case of Taxes that are payable with respect to any Taxable Period of the
Cinemex Companies and/or Symphony that begins on or before, and ends after, the
Closing Date (a “Straddle Period”), the portion of any such Tax (“Straddle
Period Tax”) that is allocable to the portion of such Straddle Period ending on
the Closing Date shall be:

 

56

 

(i)          in
the case of Taxes (including Specified Taxes and social security taxes, payroll
taxes, INFONAVIT and SAR) that are either (A) based upon or related to
income or receipts or (B) imposed in connection with any withholding
obligation, any obligation related to payroll, any actual or deemed value added
tax, sale or other transfer or assignment of property (real or personal,
tangible or intangible), deemed equal to the amount which would be payable by
the Cinemex Companies or Symphony, as the case may be (after giving effect to
amounts which would be deductible in the computation of, or offset against,
such Taxes, including any loss or credit carryforwards from prior years, which
loss or credit carryforwards will be allocated first to the computation of, or
offset against, Taxes allocable to the portion of the Straddle Period ending on
the Closing Date) if the Taxable Period ended on the Closing Date, and the
parties shall elect to do so if permitted by applicable Legal Requirements; and

 

(ii)         in
the case of Taxes imposed on a periodic basis with respect to the assets of the
Cinemex Companies and/or Symphony, or otherwise measured by the level of any
item, deemed to be the amount of such Taxes for the entire Straddle Period (or,
in the case of such Taxes determined on an arrears basis, the amount of such Taxes
for the immediately preceding period), multiplied by a fraction the numerator
of which is the number of days in the Straddle Period ending on the Closing
Date and the denominator of which is the number of days in the entire Straddle
Period.  In the case of Taxes based upon
or measured by capital (including net worth or long-term debt) or intangibles
allocable to the portion of the Straddle Period ending on the Closing Date,
such Tax shall be computed by reference to the level of such items on the Closing
Date.

 

(b)           Notwithstanding
the provisions of Section 11.3(a), all payments under Sections 2.2(c) and
2.2(d) shall be treated for Tax purposes as having been made on the
Closing Date.

 

(c)                                  In
the case of Taxes that are payable with respect to any Taxable Period that
begins on or after January 1, 2008 and ends on or before the Closing Date
that are reported on a Post-Closing Return, Sellers shall be responsible for
any Taxes due with the original Post-Closing Return in accordance with Section 11.3(e) and
shall be entitled to receive any refund of Taxes shown on the original
Post-Closing Return in accordance with Section 11.3(f).

 

57

 

(d)           Buyers
shall cause the Cinemex Companies and Symphony to prepare and provide Sellers
with calculations of the allocation to Sellers of any Straddle Period Tax and
the amount of any credit against such Straddle Period Tax, together with a
calculation of Sellers’ allocable share of any refund or credit (“Straddle
Period Tax Calculation”), determined in the manner described in Sections 11.3(a) and
(b), at the same time that Buyers provide a copy of the applicable Post-Closing
Return for Sellers’ review pursuant to Section 11.2(b).  Unless Sellers provide Buyers with a Notice
of Objection to any Post-Closing Return or any Straddle Period Tax Calculation
within twenty (20) days after delivery thereof to Sellers, such Post-Closing
Return or Straddle Period Tax Calculation shall be final and binding on the
parties.  Buyers and Sellers shall
utilize the procedures set forth in Section 2.3(c) to settle any
disputed item included in a Notice of Objection or otherwise for a Post-Closing
Return or Straddle Period Tax Calculation. 
Any Post-Closing Return filed with respect to a disputed item shall be
filed consistent with the final resolution of such disputed item.

 

(e)           No
later than twenty (20) days after the earlier of (i) 21 days after the
delivery of the Straddle Period Tax Calculation, if no Notice of Objection is
filed, or (ii) the final resolution of any disputed items on any original
Post-Closing Return, Sellers shall pay to Buyers the Tax reflected on such
Post-Closing Return (as amended to reflect the resolution of any disputed item)
for a period other than a Straddle Period and Sellers’ allocable share of any
Straddle Period Tax as provided in the Straddle Period Tax Calculation.  Notwithstanding the foregoing, Sellers shall
not be obligated to pay any such Tax to the extent included in Current Liabilities
as finally determined under Section 2.3. 
The parties acknowledge and agree that Specified Taxes shall not be
included in Current Assets or Current Liabilities under Section 2.3.

 

(f)            No
later than ten (10) days after any Pending Refund, Tax refund for a
Post-Closing Return described in Section 11.3(c), or Tax refund for the
portion of any Straddle Period ending on the Closing Date is received or credit
is allowed or applied against another Tax liability by a Taxing Authority,
Buyers shall pay or cause to be paid to Sellers any such Pending Refund and any
such Tax refund or credit. 
Notwithstanding the foregoing, Sellers shall not be entitled to a refund
or credit of Tax to the extent included in Current Assets as finally determined
under Section 2.3.

 

(g)           For
purposes of determining the amount of Taxes payable by Sellers and the amount
of Tax refunds (including any Pending Refunds) and credits payable to Sellers
under this Section 11,

 

58

 

Sellers shall be deemed to have paid toward
Taxes for which they are responsible (i) all Tax payments made on or
before the Closing Date by or on behalf of the Cinemex Companies or Symphony,
including estimated payments of the Specified Taxes, and (ii) without
duplication, all Tax payments and accruals that are included in Aggregate
Working Capital as finally determined under Schedule 2.3.

 

(h)           Buyers
shall not take any action (including making any election) other than in the
Ordinary Course of Business that will increase the amount of Taxes for which
the Sellers are responsible under this Agreement, including any Straddle Period
Tax.

 

11.4.        TAX COOPERATION AND EXCHANGE OF INFORMATION

 

Buyers and Sellers shall (a) after the Closing, assist (and cause
any respective Related Person to assist) in preparing and filing any Tax
Returns that either party is responsible for preparing and filing with respect
to the Cinemex Companies or Symphony, (b) after the Closing, cooperate
fully in preparing for any audits of, or disputes or other Proceedings with any
Taxing Authority or with respect to any matters with respect to Taxes of or
relating to the Cinemex Companies or Symphony and (c) make available to
either party and to any Taxing Authority as reasonably requested all
information, records, and documents relating to Tax matters (including Tax
Returns) of or relating to the Cinemex Companies or Symphony relating to any
Taxable Period that begins on or before the Closing Date and will preserve such
information, records, or documents until the expiration of any applicable
statute of limitations or extensions thereof. 
Each party shall keep any information obtained under this Section 11.4
confidential except (i) as may be necessary in connection with the filing
of Tax Returns or claims for refund or the conduct of any audit, litigation or
other Proceeding with respect to Taxes or (ii) with the consent of the
other party hereto.

 

11.5.        CONTESTS

 

(a)           After
the Closing Date, Buyers shall notify Sellers in writing within ten (10) days
of receiving notice of a proposed assessment or the commencement of any Tax
audit or administrative or judicial Proceeding or of any demand or claim on
Buyers or the Cinemex Companies or Symphony, which, if determined adversely to
such party or after the lapse of time, could have an adverse effect on
Sellers.  Such notice shall contain
factual information (to the extent known to Buyers and the Cinemex Companies or
Symphony or any Related Person of such party) briefly describing the asserted
Tax liability and shall include copies of any notice or other document received
from any Taxing Authority in respect of any such asserted Tax liability.

 

59

 

The failure of Buyers to provide Sellers such
notice shall not release Sellers from their obligations under this Agreement
except to the extent Sellers have been materially prejudiced by the failure to
receive such notice.

 

(b)           Except
as provided below, in the case of a Tax audit or administrative or judicial
Proceeding (a “Contest”) that relates to Taxable Periods ending on or prior to
the Closing Date or to any Straddle Period pursuant to which Contest Sellers
could be liable for indemnification or could be entitled to a Tax refund from a
Taxing Authority pursuant to this Agreement, Sellers shall have the right, at
their expense, to participate in or, at the option of Buyers, control the
conduct of such Contest; provided that, even if Buyers opt to permit
Sellers to control the conduct of such Contest, Sellers (i) shall permit
Buyers to participate in the Proceeding and to monitor the progress of such
Proceeding, and (ii) if such settlement or compromise would have an
adverse effect on the Cinemex Companies, Symphony or Buyers, individually or in
the aggregate, shall not settle or otherwise compromise such Proceeding without
the prior written consent of Buyers (which consent shall not be unreasonably
withheld, delayed or conditioned). 
Notwithstanding the foregoing, Sellers shall not have the right to
control any Contest pursuant to which Sellers would reasonably be expected to
be entitled to a Tax refund if the outcome of such contest could have an
adverse effect on the Cinemex Companies, Symphony, or Buyers, individually or
in the aggregate.  In the case of a
Contest that relates to the income tax returns of any of the Cinemex Companies
or Symphony (an “Income Tax Contest”) that relates to Taxable Periods ending on
or prior to the Closing Date, pursuant to which Contest Sellers could be liable
for indemnification or could be entitled to a Tax refund from a Taxing Authority
pursuant to this Agreement, Sellers shall have the right, at their expense, to
control the conduct of such Income Tax Contest, and, pursuant to Section 11.4,
Buyers will cause Cinemex Companies to provide Sellers with reasonable
assistance and access to the books and records of such Cinemex Company or
Symphony as it relates to the Income Tax Contest, provided that Sellers (i) shall
permit Buyers to participate in the Income Tax Contest and to monitor the
progress of such Contest and (ii) if such settlement or compromise would
have an adverse effect on the Cinemex Companies, Symphony or Buyers,
individually or in the aggregate, shall not settle or otherwise compromise such
Income Tax Contest without the prior written consent of Buyers (which consent shall
not be unreasonably withheld, delayed or conditioned).  Notwithstanding the foregoing, Sellers shall
not be entitled to control any Contest if such Contest,

 

60

 

alone or in conjunction with other Contests,
could reasonably be expected to result in Losses that exceed the Tax Loss
Cap.  Any Tax adjustment (including
restatement by inflation, surcharges, penalties and fines) assessed as a
consequence of the conclusion of a Tax audit or administrative or judicial
proceeding or of any demand or claim on Buyers or the Cinemex Companies
corresponding to a taxable period that (A) ends on or before the Closing
Date or (B) is allocable to the portion of such Straddle Period ending on
and including the Closing Date, (x) shall be paid by Sellers to Buyers if
the Tax adjustment requires payment of additional Taxes, subject to the
limitations set forth in Section 8.5 as if such additional Taxes were
Losses subject to indemnification under Section 8.4(i) and (y) shall
be paid by or at the direction of Buyers to Sellers if the Tax adjustment
results in a credit or refund of Taxes.

 

11.6.        MISCELLANEOUS

 

For Tax purposes, unless otherwise provided for by Legal Requirement,
the parties hereto agree to treat any payment pursuant to this Section 11
and any other indemnification payment made under Section 8 or otherwise
pursuant to this Agreement as adjustments to the Purchase Price.

 

12.           GENERAL PROVISIONS

 

12.1.        EXPENSES

 

Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with
the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of its
Representatives.  In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a Breach of
this Agreement by another party.

 

12.2.        PUBLIC ANNOUNCEMENTS

 

Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyers and Sellers mutually determine, except as may be required by any Legal
Requirement or by the rules of any national securities exchange or
automated quotation system to which Sellers or any Related Person of Sellers is
or becomes subject.  Sellers and
Buyers will consult with each other concerning the means by which the Cinemex
Companies’ employees, customers, and suppliers and others having dealings with
the Cinemex Companies will be informed of the Contemplated Transactions.

 

61

 

12.3.        CONFIDENTIALITY

 

Between the date of this Agreement and the Closing Date, Buyers will
maintain in confidence, and will cause Buyers’ Advisors to maintain in
confidence, and not use to the detriment of another party or a Cinemex Company
any written, oral, or other information obtained in confidence from another
party or a Cinemex Company in connection with this Agreement or the
Contemplated Transactions, unless (i) such information is already known to
such party or such information becomes publicly available through no fault of
such party or (ii) such party is compelled to disclose by judicial or
administrative process or, in the opinion of legal counsel, by a Legal
Requirement or Mexican Legal Requirement or by the applicable rules of a
national securities exchange.

 

If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.

 

12.4.        NOTICES

 

All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed
by certified mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):

 

Sellers or Guarantor:

 

c/o AMC Entertainment Inc.

920 Main St.

Kansas City, MO 64105

Telephone Number:  (816) 480-2506

Facsimile Number:  (816) 480-4700

Attention: 
Kevin M. Connor, General Counsel

 

with a copy to:

 

Lathrop & Gage L.C.

2345 Grand Boulevard, Suite 2200

Kansas City, MO 64108

Telephone Number:  (816) 460-5824

Facsimile Number:  (816) 292-2001

Attention: Joseph W. Medved

 

62

 

Entretenimiento:

 

Edificio Parque Reforma

Campos Eliseos # 400, piso 18

Col. Lomas de Chapultepec

11560 Mexico, D.F.

Attention: Adolfo Casar

Facsimile No.: +52 (55) 5246-3742

 

with a copy to:

 

Galicia y Robles,
S.C.

Torre Del Bosque

Blvd. Manuel
Avila Camacho No. 24, 7° Piso

11000 Mexico,
D.F.

Attention:
Christian Lippert H.

Facsimile
No.:   +52 (55) 5540-9202 x 2233

 

Skadden, Arps, Slate, Meagher & Flom
LLP

Four Times Square

New York, New York 10036

Attention: Alejandro Radzyminski

Facsimile No.:   +1 (917) 777-3702

 

12.5.        FURTHER ASSURANCES

 

The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.

 

12.6.        WAIVER

 

The rights and remedies of the parties to this Agreement are cumulative
and not alternative.  Neither the failure
nor any delay by any party in exercising any right, power, or privilege under
this Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power,
or privilege.  To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may
be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.

 

63

 

12.7.        ENTIRE AGREEMENT AND MODIFICATION

 

This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter.  This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.

 

12.8.        DISCLOSURE STATEMENT

 

In the event of any inconsistency between the statements in the body of
this Agreement and those in the Disclosure Statement (other than an exception
expressly set forth as such in the Disclosure Statement with respect to a
specifically identified representation or warranty), the statements in the body
of this Agreement will control.  Any
reference in a particular section or part of the Disclosure Statement shall be
deemed to be an exception to (or, as applicable, a disclosure for purposes of)
the representations and warranties (or covenants, as applicable) of the
relevant party that are contained in (a) the corresponding Section of
this Agreement and (b) any other representations and warranties of such
party that is contained in this Agreement, but only if the relevance of that
reference as an exception to (or a disclosure for purposes of) such
representations and warranties is reasonably apparent on its face or an
appropriate cross-reference is provided.

 

12.9.        ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS

 

(a)           Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, which will not be unreasonably withheld.  Subject to the preceding sentence, this Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties.  Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement.  This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this Agreement
and their successors and assigns.

 

(b)           Notwithstanding anything in this Agreement to the contrary, Sellers shall
have the right to transfer a portion of the Shares to affiliates of Sellers
prior to the Closing Date, but only to the extent that such transfer does not
result in, or is not reasonably likely to have, a material adverse effect on
the Cinemex Companies’  tax contribution
position (cuenta de capital de aportación), in
which case any Sellers that do not own any Shares as of the Closing Date will
be released and the transferee affiliates of Sellers owning Shares will be
joined as parties to this Agreement and Buyers may

 

64

 

assign their rights
and obligations hereunder; provided that the assigning Seller or Buyer
shall remain liable for the obligations hereunder so assigned.

 

12.10.      SEVERABILITY

 

If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. 
Any provision of this Agreement held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

 

12.11.      SECTION HEADINGS, CONSTRUCTION

 

The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation.  All references to “Section” or “Sections”
refer to the corresponding Section or Sections of this Agreement.  All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.  Unless otherwise expressly provided, the word
“including” does not limit the preceding words or terms.  This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.

 

12.12.      TIME OF ESSENCE

 

With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.

 

12.13.      GOVERNING LAW

 

This Agreement will be governed by, and construed in accordance with,
the laws of the State of New York without regard to conflicts of laws
principles.

 

12.14.      JURISDICTION AND VENUE

 

Any action or proceeding arising out of or relating to this Agreement
will be brought against any of the parties in the courts of New York and each
of the parties hereto irrevocably and unconditionally submits to the
jurisdiction of the United States District Court for the Southern District of
New York or, if such court will not accept jurisdiction, the Supreme Court of
the State of New York or any court of competent civil jurisdiction sitting in
New York County, New York in connection with any action or proceeding.  In any action or proceeding, each of the
parties hereto irrevocably and unconditionally waives and agrees not to assert
by way of motion, as a defense or otherwise any claims that it is not subject
to the jurisdiction of the above courts, that such action or suit is brought in
an inconvenient forum or that the venue of such action, suit or other
proceeding is improper.  Each of the
parties hereto also hereby agrees that any final and unappealable judgment
against any party hereto in connection with any action or proceeding shall be
conclusive and binding on such party and that such award or

 

65

 

judgment may be enforced in any court of
competent jurisdiction, either within or outside of the United States.  A certified or exemplified copy of such award
or judgment shall be conclusive evidence of the fact and amount of such award
or judgment.  Process in any such action
or proceeding may be served on any party anywhere in the world.

 

12.15.      WAIVER OF JURY
TRIAL.

 

TO THE FULLEST EXTENT
PERMITTED BY LAW, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

 

12.16.      COUNTERPARTS

 

This Agreement may be executed in one or more counterparts (including facsimile and portable document format
(.PDF) copies), each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

 

12.17.      SPECIFIC PERFORMANCE; LIQUIDATED DAMAGES;
ATTORNEYS’ FEES

 

(a)           The
parties agree that if any of the provisions of this Agreement were not
performed by Sellers in accordance with their specific terms or were otherwise
Breached by Sellers, irreparable damage would occur to Buyers, no adequate
remedy at law would exist for Buyers and damages would be difficult to
determine, and that prior to the termination of this Agreement Buyers will be
entitled to specific performance of the terms of this Agreement, in addition to
any other remedy at law or equity without need of posting any bond or security.

 

(b)           The
parties agree that if any of the provisions of this Agreement were not
performed by Buyers in accordance with their specific terms or were otherwise
Breached by Buyers, irreparable damage would occur to Sellers, no adequate
remedy at law would exist for Sellers and damages would be difficult to
determine, and that prior to the termination of this Agreement Sellers will be
entitled to specific performance of the terms of this Agreement, in addition to
any other remedy at law or equity without need of posting any bond or security.

 

(c)           In
the event that (i) the conditions to Sellers’ obligation to close the
Contemplated Transactions set forth in Section 7 have been satisfied or to
the extent permitted by Applicable Law waived and Sellers are not then in
Breach of this Agreement and (ii) all of the

 

66

 

conditions to Buyers’ obligation to close set
forth in Sections 6 have been satisfied or to the extent permitted by
Applicable Law waived and Buyers do not consummate the Closing, then, if
Sellers terminate this Agreement pursuant to Section 9.1(a), Sellers shall
be entitled to liquidated damages from Entretenimiento in the amount of
US$50,000,000, together with interest on such amount at 9% per annum
until paid (the “Seller Liquidated Damages”). 
The parties agree that the Seller Liquidated Damages are not intended as
a penalty but as liquidated damages in a reasonable amount that will compensate
Sellers for Buyers’ failure to consummate the Contemplated Transactions, which
amount would otherwise be impossible to calculate with precision.  The rights and remedies of Sellers provided
by this Section 12.17(c) shall survive the termination of this
Agreement and shall be the sole and exclusive remedy of Sellers after
termination of this Agreement pursuant to Section 9.1(a).

 

(d)           In
the event that: (i) the conditions to Buyers’ obligation to close the Contemplated
Transactions set forth in Section 6 have been satisfied or to the extent
permitted by Applicable Law waived and Buyers are not then in Breach of this
Agreement and (ii) all of the conditions to Sellers’ obligation to close
set forth in Section 7 have been satisfied or to the extent permitted by
Applicable Law waived and Sellers do not consummate the Closing, then, if
Buyers terminate this Agreement pursuant to Section 9.1(a), Buyers shall
be entitled to liquidated damages from Sellers in the amount of US$50,000,000,
together with interest on such amount at 9% per annum until
paid (the “Buyer Liquidated Damages”). 
The parties agree that the Buyer Liquidated Damages are not intended as
a penalty but as liquidated damages in a reasonable amount that will compensate
Buyers for Sellers’ failure to consummate the Contemplated Transactions, which
amount would otherwise be impossible to calculate with precision.  The rights and remedies of Buyers provided by
this Section 12.17(d) shall survive the termination of this Agreement
and shall be the sole and exclusive remedy of Buyers after termination of this
Agreement pursuant to Section 9.1(a).

 

(e)           If
a party is successful in any suit or proceeding against the other party to
enforce this Agreement or because of any damages sustained by a party due to
the other party’s Breach of this Agreement, the losing party will pay the
prevailing party, in addition to other costs and damages, its reasonable
attorneys’ fees.

 

67

 

12.18.      EFFECT OF INVESTIGATION

 

No
investigation conducted by any party or any party’s respective affiliates or
Representatives made heretofore or hereafter shall affect the representations
and warranties of any party hereto contained herein or the indemnification
obligations of the Sellers set forth in Section 8 and Section 11.

 

12.19.      NO SUBROGATION

 

Each of the
Sellers hereby irrevocably and unconditionally waives any and all rights of
subrogation against or with respect to any of the Cinemex Companies or any
Person that becomes an affiliate of the Cinemex Companies after the Closing of
the obligations under the Inbursa Loan Agreement which the Sellers may at any
time otherwise have as a result of the repayment by, or on behalf of, the
Cinemex Companies of any or all of the obligations of the Cinemex Companies
under the Inbursa Loan Agreement.

 

12.20.      NATURE OF SELLERS’ OBLIGATIONS

 

All
representations, warranties, covenants, obligations and agreements of each
Seller hereunder are joint and several representations, warranties, covenants,
obligations and agreements of all Sellers.

 

12.21.      NATURE OF BUYERS’ OBLIGATIONS

 

All
representations, warranties, covenants, obligations and agreements of each
Buyer hereunder are joint and several representations, warranties, covenants,
obligations and agreements of all Buyers.

 

68

 

IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.

 

	
   

  	
   

  	
  Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Entretenimiento
  GM de México, S.A. de

  
	
   

  	
   

  	
  C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alfredo Casar

  
	
   

  	
   

  	
   

  	
  Alfredo Casar

  
	
   

  	
   

  	
   

  	
  Attorney-in-fact

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ José Martí

  
	
   

  	
   

  	
   

  	
  José Martí

  
	
   

  	
   

  	
   

  	
  Attorney-in-fact

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sellers:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMC Netherlands HoldCo B.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMC Europe S.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LCE Mexican Holdings, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer

  

 

 

SIGNATURE PATE TO STOCK PURCHASE AGREEMENT

 

 

GUARANTY

 

AMC Entertainment Inc., being the indirect
owner of Sellers and as an inducement to Buyers entering into this Agreement,
hereby guarantees the performance and payment of the obligations of Sellers
under this Agreement.

 

	
   

  	
   

  	
  Dated:

  	
  November 5, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMC Entertainment Inc., a Delaware

  
	
   

  	
   

  	
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Craig R. Ramsey

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer

  
					

 

 

SIGNATURE PATE TO STOCK PURCHASE AGREEMENT

 

 

EXHIBIT A

 

Grupo Cinemex S.A. de C.V. Wholly-Owned
Subsidiaries

 

	
  1.

  	
  Cadena Mexicana de Exhibición,
  S.A. de C.V.

  
	
  2.

  	
  Arrendadora Inmobiliaria Cinematográfica, S.A. de C.V.

  
	
  3.

  	
  Operadora de Cinemas, S.A. de
  C.V.

  
	
  4.

  	
  Cinemex Producciones, S.A. de
  C.V.

  
	
  5.

  	
  FICC Ciudad de México, S.A. de
  C.V.

  
	
  6.

  	
  Serviuno, S.A. de C.V.

  
	
  7.

  	
  Servicios Cinematográficos Especializados, S.A. de C.V.

  
	
  8.

  	
  Operadora Moliere, S.A. de C.V.

  
	
  9.

  	
  Teatro Polanco, S.A. de C.V.

  
	
  10.

  	
  Producciones Expreso Astral, S.A.
  de C.V.

  
	
  11.

  	
  Cinemex Altavista, S.A. de C.V.

  
	
  12.

  	
  Cinemex Aragón, S.A. de C.V.

  
	
  13.

  	
  Cinemex Cuauhtémoc, S.A. de C.V.

  
	
  14.

  	
  Cinemex Ecatepec, S.A. de C.V.

  
	
  15.

  	
  Cinemex El Risco, S.A. de C.V. (Patriotismo)

  
	
  16.

  	
  Cinemex El Rosario, S.A. de C.V.

  
	
  17.

  	
  Cinemex Ixtapaluca, S.A. de C.V.

  
	
  18.

  	
  Cinemex Desarrollos, S.A. de C.V.

  
	
  19.

  	
  Cinemex Las Plazas Guadalajara,
  S.A. de C.V.

  
	
  20.

  	
  Cinemex Legaria, S.A. de C.V.

  
	
  21.

  	
  Cinemex Antara, S.A. de C.V.

  
	
  22.

  	
  Cinemex Interlomas, S.A. de C.V.

  
	
  23.

  	
  Cinemex Manacar, S.A. de C.V.

  
	
  24.

  	
  Cinemex Masaryk, S.A. de C.V.

  
	
  25.

  	
  Cinemex Misterios, S.A. de C.V.

  
	
  26.

  	
  Cinemex Morelia, S.A. de C.V.

  
	
  27.

  	
  Cinemex Mundo E, S.A. de C.V.

  
	
  28.

  	
  Cinemex Palomas, S.A. de C.V.

  
	
  29.

  	
  Cinemex Parque Delta, S.A. de C.V.

  
	
  30.

  	
  Cinemex Perinorte, S.A. de C.V.

  
	
  31.

  	
  Cinemex Polanco, S.A. de C.V.

  
	
  32.

  	
  Cinemex Puebla, S.A. de C.V.

  
	
  33.

  	
  Cinemex San Antonio, S.A. de C.V.

  
	
  34.

  	
  Cinemex Santa Fe, S.A. de C.V.

  
	
  35.

  	
  Cinemex Tenayuca, S.A. de C.V.

  
	
  36.

  	
  Cinemex Toluca II, S.A. de C.V.

  
	
  37.

  	
  Cinemex Universidad, S.A. de C.V.

  
	
  38.

  	
  Cinemex WTC, S.A. de C.V.

  
	
  39.

  	
  Cinemex Zaragoza, S.A. de C.V.

  
	
  40.

  	
  FiCCO Educación y Cultura A.C.

  

 

 

EXHIBIT B

 

Transaction Documents

 

Each certificate, power of attorney and
consent delivered at Closing pursuant to this Agreement as set forth in Section 2.5.

 

 

EXHIBIT C

 

Form of Resignation and Release of
Directors

 

	
   

  [    ] de [     ]
  de 2008 [AL CIERRE]

   

  [Nombre de la sociedad correspondiente],
  [S.A. de C.V. / S. de R.L. de C.V.]

   

  Estimados señores,

   

  Por medio de la presente (1) renuncio
  al cargo de miembro del [Consejo de Administración / Consejo de Gerentes] de
  [Nombre de la sociedad], [S.A.
  de C.V. / S. de R.L. de C.V.] (la “Sociedad”) que he venido desempeñando hasta la fecha del presente, y (2) reconozco
  y manifiesto de manera absoluta e incondicional que [ni la Sociedad ni alguna
  de sus afiliadas o subsidiarias, tienen a su cargo adeudo alguno frente al
  suscrito y han cubierto en su totalidad cualesquiera pagos que el suscrito
  haya tenido derecho a recibir, por lo que, no me reservo acción o derecho
  alguno que ejercitar en contra de la Sociedad o cualquiera de sus afiliadas o
  subsidiarias, ni de persona física o moral que represente de forma alguna los
  intereses de éstas, liberándolas en consecuencia de cualquier responsabilidad.]

   

  [Mediante la aceptación y
  suscripción de la presente, la Sociedad (i) otorga el finiquito más
  amplio que en derecho proceda en favor del suscrito, respecto de cualquier
  acción u omisión realizada en el legal desempeño de su cargo y (ii) renuncia,
  de manera incondicional e irrevocable, a cualquier derecho que pudiere tener
  en contra del suscrito, respecto de cualquier acción u omisión realizada en
  el legal desempeño de su cargo.]

   

   

  RECONOZCO Y ACEPTO,

   

  	
   

  	
   

  [           ],  2008 [AT
  CLOSING]

   

  [Name of the relevant company], [S.A. de
  C.V. / S. de R.L. de C.V.]

   

  Dear sirs,

   

  I hereby (1) resign my position as member of
  the [Board of Directors] [Board of Managers] of [Name of the company], [S.A. de C.V. / S. de R.L. de C.V.]
  (the “Company”), [and (2)  fully and unconditionally acknowledge and
  agree that the Company and any of its affiliates or subsidiaries do not owe
  me and have fully complied with any payments to which I have been entitled;
  consequently, I do not reserve for myself any action or right against the
  Company nor any of its affiliates or subsidiaries, nor against any other
  person or company representing their interests, releasing them of any
  liabilities whatsoever.]

   

  [By executing and
  accepting this letter, the Company (i) hereby releases, to the greatest
  possible extent, the undersigned in respect of any action or omission arising
  from its acting as                  
  and (ii) unconditionally and irrevocably waives any right to which it
  may be entitled against the undersigned, in respect of any action or omission
  arising from its acting as                   .]

   

   

   

   

   

  I ACKNOWLEDGE AND
  AGREE,

   

  
	
   

  	
   

  	
   

  
	
  [                           ]

  	
   

  	
  [                           ]

  

 

 

SCHEDULE 1

 

Sellers’ Knowledge Persons

 

Alma Rosa Garcia

Damián Piza

Jesús Paz

 

 

SCHEDULE 2

 

Buyers’ Knowledge Persons

 

Alfredo Casar

Jose Leonardo Marti

 

 

SCHEDULE 2.1

 

Transfers of Shares between Buyers and
Sellers

 

To be provided at Closing once individual
Buyers are identified pursuant to Section 5.10.

 

 

SCHEDULE 2.3

 

Working Capital

 

Please see attached.

 

 

SCHEDULE 4.2

 

Buyers’ Consents

 

None

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