Document:

Exhibit
10.1

 

AMERIPRISE
FINANCIAL

 

DEFERRED
EQUITY PROGRAM

 

FOR
INDEPENDENT FINANCIAL ADVISORS

 

As
Amended and Restated Effective April 23, 2008

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE 1

  	
   

  	
  DEFINITIONS

  	
  1

  
	
  1.01

  	
   

  	
  “Account Adjustment”

  	
  1

  
	
  1.02

  	
   

  	
  “Advisor”

  	
  1

  
	
  1.03

  	
   

  	
  “Aggregate Vested Balance”

  	
  1

  
	
  1.04

  	
   

  	
  “Amended Distribution Election Form”

  	
  1

  
	
  1.05

  	
   

  	
  “Annual Deferral Account”

  	
  1

  
	
  1.06

  	
   

  	
  “Annual Discretionary Allocation”

  	
  1

  
	
  1.07

  	
   

  	
  “Annual Discretionary Allocation Account”

  	
  2

  
	
  1.08

  	
   

  	
  “Annual Discretionary Allocation Crediting Date”

  	
  2

  
	
  1.09

  	
   

  	
  “Annual Discretionary Allocation Market Value”

  	
  2

  
	
  1.10

  	
   

  	
  “Annual Election Form”

  	
  2

  
	
  1.11

  	
   

  	
  “Annual Enrollment Materials”

  	
  2

  
	
  1.12

  	
   

  	
  “Annual Participant Deferral Percentage”

  	
  2

  
	
  1.13

  	
   

  	
  “Annual Stock Match”

  	
  2

  
	
  1.14

  	
   

  	
  “Annual Stock Match Account”

  	
  2

  
	
  1.15

  	
   

  	
  “Board”

  	
  2

  
	
  1.16

  	
   

  	
  “Change in Control”

  	
  2

  
	
  1.17

  	
   

  	
  “Claimant”

  	
  3

  
	
  1.18

  	
   

  	
  “Code”

  	
  3

  
	
  1.19

  	
   

  	
  “Committee”

  	
  3

  
	
  1.20

  	
   

  	
  “Company”

  	
  3

  
	
  1.21

  	
   

  	
  “Company Stock”

  	
  3

  
	
  1.22

  	
   

  	
  “Disability”

  	
  3

  
	
  1.23

  	
   

  	
  “Distribution Election”

  	
  3

  
	
  1.24

  	
   

  	
  “Distribution Election Form”

  	
  3

  
	
  1.25

  	
   

  	
  “Elected Amount”

  	
  3

  
	
  1.26

  	
   

  	
  “Election Form”

  	
  3

  
	
  1.27

  	
   

  	
  “Eligible Compensation”

  	
  3

  
	
  1.28

  	
   

  	
  “Eligible Financial Advisor”

  	
  3

  
	
  1.29

  	
   

  	
  “ERISA”

  	
  4

  
	
  1.30

  	
   

  	
  “Fair Market Value”

  	
  4

  
	
  1.31

  	
   

  	
  “Financial Planning GDC”

  	
  4

  
	
  1.32

  	
   

  	
  “FINRA”

  	
  4

  
	
  1.33

  	
   

  	
  “Franchise Agreement”

  	
  4

  
	
  1.34

  	
   

  	
  “GDC”

  	
  4

  
	
  1.35

  	
   

  	
  “Newly Eligible Financial Advisor”

  	
  4

  

 

 

	
  1.36

  	
   

  	
  “NYSE”

  	
  4

  
	
  1.37

  	
   

  	
  “Participant”

  	
  4

  
	
  1.38

  	
   

  	
  “Participating Company”

  	
  4

  
	
  1.39

  	
   

  	
  “Plan”

  	
  5

  
	
  1.40

  	
   

  	
  “Plan Accounts”

  	
  5

  
	
  1.41

  	
   

  	
  “Plan Entry Date”

  	
  5

  
	
  1.42

  	
   

  	
  “Plan Year”

  	
  5

  
	
  1.43

  	
   

  	
  “Reference Date”

  	
  5

  
	
  1.44

  	
   

  	
  “Return of Excess Deferrals”

  	
  5

  
	
  1.45

  	
   

  	
  “Securities Act”

  	
  5

  
	
  1.46

  	
   

  	
  “Service Period”

  	
  5

  
	
  1.47

  	
   

  	
  “Settlement Date”

  	
  5

  
	
  1.48

  	
   

  	
  “Share Unit”

  	
  6

  
	
  1.49

  	
   

  	
  “Stock Match Crediting Date”

  	
  6

  
	
  1.50

  	
   

  	
  “Stock Match Market Value”

  	
  6

  
	
  1.51

  	
   

  	
  “T & O Plan Account”

  	
  6

  
	
  1.52

  	
   

  	
  “Termination of Franchise Agreement”

  	
  6

  
	
  1.53

  	
   

  	
  “Transition and Opportunity Stock Program”

  	
  6

  
	
  1.54

  	
   

  	
  “Trust”

  	
  6

  
	
  1.55

  	
   

  	
  “Trustee”

  	
  6

  
	
  1.56

  	
   

  	
  “Unforeseeable Emergency”

  	
  6

  
	
  ARTICLE 2

  	
   

  	
  ADMINISTRATION

  	
  7

  
	
  2.01

  	
   

  	
  Committee Duties

  	
  7

  
	
  2.02

  	
   

  	
  Agents, Subcommittees and Delegation of Authority

  	
  7

  
	
  2.03

  	
   

  	
  Binding Effect of Decisions

  	
  7

  
	
  2.04

  	
   

  	
  Indemnity of Committee Members and Others

  	
  7

  
	
  ARTICLE 3

  	
   

  	
  AVAILABLE SHARES

  	
  7

  
	
  3.01

  	
   

  	
  Number of Shares

  	
  7

  
	
  3.02

  	
   

  	
  Character of Shares

  	
  7

  
	
  3.03

  	
   

  	
  Anti-Dilution Adjustment

  	
  8

  
	
  ARTICLE 4

  	
   

  	
  PARTICIPANT DEFERRALS

  	
  8

  
	
  4.01

  	
   

  	
  Eligibility

  	
  8

  
	
  4.02

  	
   

  	
  Deferral Election

  	
  8

  
	
  (a)

  	
   

  	
  Deferral Election

  	
  8

  
	
  (b)

  	
   

  	
  Commencement of Participation

  	
  8

  
	
  (c)

  	
   

  	
  Suspension of Deferrals

  	
  9

  
	
  (d)

  	
   

  	
  Subsequent Election

  	
  9

  

 

 

	
  4.03

  	
   

  	
  Distribution Election

  	
  10

  
	
  (a)

  	
   

  	
  Distribution
  Election

  	
  10

  
	
  (b)

  	
   

  	
  Change to
  Distribution Election

  	
  10

  
	
  4.04

  	
   

  	
  Annual Deferral Account

  	
  10

  
	
  4.05

  	
   

  	
  Correction of Ineligible Deferrals

  	
  11

  
	
  (a)

  	
   

  	
  Return of
  Deferrals if Minimum Deferral Threshold Not Met

  	
  11

  
	
  (b)

  	
   

  	
  Return of
  Excess Deferrals

  	
  11

  
	
  4.06

  	
   

  	
  Vesting

  	
  11

  
	
  4.07

  	
   

  	
  Payment Medium

  	
  11

  
	
  4.08

  	
   

  	
  Payment of Annual Deferral Accounts

  	
  11

  
	
  ARTICLE 5

  	
   

  	
  ANNUAL STOCK MATCHES

  	
  12

  
	
  5.01

  	
   

  	
  Annual Stock Match

  	
  12

  
	
  5.02

  	
   

  	
  Annual Stock Match Account

  	
  12

  
	
  5.03

  	
   

  	
  Vesting

  	
  12

  
	
  5.04

  	
   

  	
  Payment Medium

  	
  13

  
	
  5.05

  	
   

  	
  Payment of Stock Match Accounts

  	
  13

  
	
  ARTICLE 6

  	
   

  	
  ANNUAL DISCRETIONARY ALLOCATIONS

  	
  13

  
	
  6.01

  	
   

  	
  Annual Discretionary Allocation

  	
  13

  
	
  6.02

  	
   

  	
  Annual Discretionary Allocation Account

  	
  13

  
	
  6.03

  	
   

  	
  Vesting

  	
  14

  
	
  6.04

  	
   

  	
  Payment Medium

  	
  14

  
	
  6.05

  	
   

  	
  Payment of Annual Discretionary Allocation Accounts

  	
  14

  
	
  ARTICLE 7

  	
   

  	
  TRANSITION AND OPPORTUNITY STOCK PROGRAM

  	
  14

  
	
  ARTICLE 8

  	
   

  	
  EARNINGS ON PLAN ACCOUNTS

  	
  15

  
	
  8.01

  	
   

  	
  Earnings Crediting

  	
  15

  
	
  8.02

  	
   

  	
  Anti-Dilution Adjustment

  	
  15

  
	
  8.03

  	
   

  	
  Valuation of Plan Accounts Pending Distribution

  	
  16

  
	
  ARTICLE 9

  	
   

  	
  EFFECT OF CERTAIN EVENTS

  	
  16

  
	
  9.01

  	
   

  	
  Death

  	
  16

  
	
  9.02

  	
   

  	
  Disability

  	
  16

  
	
  9.03

  	
   

  	
  Qualified Transition

  	
  16

  
	
  9.04

  	
   

  	
  Other Termination of Franchise Agreement

  	
  16

  
	
  9.05

  	
   

  	
  Termination of Employment

  	
  17

  
	
  9.06

  	
   

  	
  Transfer to Employee Status

  	
  17

  
	
  9.07

  	
   

  	
  Change in Control

  	
  17

  
	
  9.08

  	
   

  	
  Unforeseeable Emergency

  	
  17

  
	
  9.09

  	
   

  	
  Event of Taxation

  	
  17

  
	
  9.10

  	
   

  	
  Plan Termination

  	
  18

  

 

 

	
  ARTICLE 10

  	
   

  	
  TERMINATION AND AMENDMENT

  	
  18

  
	
  10.01

  	
   

  	
  Termination

  	
  18

  
	
  10.02

  	
   

  	
  Amendment

  	
  18

  
	
  10.03

  	
   

  	
  Effect of Payment

  	
  18

  
	
  ARTICLE 11

  	
   

  	
  CLAIMS PROCEDURES

  	
  19

  
	
  11.01

  	
   

  	
  Presentation of Claim

  	
  19

  
	
  11.02

  	
   

  	
  Notification of Decision

  	
  19

  
	
  11.03

  	
   

  	
  Review of a Denied Claim

  	
  19

  
	
  11.04

  	
   

  	
  Decision on Review

  	
  19

  
	
  11.05

  	
   

  	
  Arbitration

  	
  19

  
	
  ARTICLE 12

  	
   

  	
  TRUST

  	
  20

  
	
  12.01

  	
   

  	
  Establishment of the Trust

  	
  20

  
	
  12.02

  	
   

  	
  Interrelationship of the Plan and the Trust

  	
  20

  
	
  12.03

  	
   

  	
  Distributions from the Trust

  	
  21

  
	
  ARTICLE 13

  	
   

  	
  MISCELLANEOUS

  	
  21

  
	
  13.01

  	
   

  	
  Status of Plan

  	
  21

  
	
  13.02

  	
   

  	
  Section 409A of the Code

  	
  21

  
	
  13.03

  	
   

  	
  Securities Matters

  	
  21

  
	
  13.04

  	
   

  	
  Unsecured General Creditor

  	
  22

  
	
  13.05

  	
   

  	
  Other Benefits and Agreements

  	
  22

  
	
  13.06

  	
   

  	
  Participating Company’s Liability

  	
  22

  
	
  13.07

  	
   

  	
  Nonassignability

  	
  22

  
	
  13.08

  	
   

  	
  Prior Beneficiary Designations Void

  	
  22

  
	
  13.09

  	
   

  	
  No Right to Service

  	
  22

  
	
  13.10

  	
   

  	
  Furnishing Information

  	
  22

  
	
  13.11

  	
   

  	
  Terms

  	
  23

  
	
  13.12

  	
   

  	
  Captions

  	
  23

  
	
  13.13

  	
   

  	
  Governing Law

  	
  23

  
	
  13.14

  	
   

  	
  Notice

  	
  23

  
	
  13.15

  	
   

  	
  Successors

  	
  23

  
	
  13.16

  	
   

  	
  Spouse’s Interest

  	
  23

  
	
  13.17

  	
   

  	
  Validity

  	
  23

  
	
  13.18

  	
   

  	
  Incompetent

  	
  23

  
	
  13.19

  	
   

  	
  Insurance

  	
  24

  
	
  13.20

  	
   

  	
  Legal Fees to Enforce Rights After Change in Control

  	
  24

  
	
  SCHEDULE A

  	
   

  	
  25

  

 

 

AMERIPRISE
FINANCIAL

DEFERRED
EQUITY PROGRAM

FOR
INDEPENDENT FINANCIAL ADVISORS

 

As Amended and
Restated Effective April 23, 2008

 

Purpose

 

The purpose of the Plan is
to provide a means for the deferral by Eligible Financial Advisors of Eligible
Compensation.  Participation in the Plan
shall be limited to Advisors of the Participating Companies, and the Plan shall
be unfunded for tax purposes and for purposes of Title I of ERISA.

 

Article 1

Definitions

 

For purposes of the Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the meanings indicated in
this Article 1:

 

1.01                          “Account
Adjustment” shall mean an adjustment made to the balance of any Plan
Account in accordance with Section 4.05.

 

1.02                          “Advisor”
shall mean an independent contractor who is a party to an effective Franchise
Agreement.

 

1.03                          “Aggregate
Vested Balance” shall mean, with respect to the Plan Accounts of any Participant
as of a given date, the sum of the amounts that have become vested under all of
the Participant’s Plan Accounts in accordance with Sections 4.06, 5.03 and
6.03, Article 9 and the provisions of the applicable Annual Enrollment
Materials, as adjusted to reflect all applicable earnings crediting pursuant to
Section 8.01, Account Adjustments pursuant to Section 4.05 and all
prior withdrawals and distributions.

 

1.04                          “Amended
Distribution Election Form” shall mean the Amended Distribution Election Form required
by the Committee to be submitted by a Participant to effect a permitted change
in the Distribution Election previously made by the Participant under any
Distribution Election Form or prior Amended Distribution Election Form.

 

1.05                          “Annual
Deferral Account” shall mean a notional, bookkeeping account established
under the Plan to reflect the amount credited in a Plan Year with respect to a
Participant’s elective deferral for such Plan Year in accordance with Section 4.04
and the provisions of the applicable Annual Enrollment Materials, as adjusted
to reflect all applicable dividend crediting pursuant to Section 8.01 and
Account Adjustments pursuant to Section 4.05.

 

1.06                          “Annual
Discretionary Allocation” shall mean the aggregate amount credited to a
Participant in respect of a particular Plan Year pursuant to Section 6.01.

 

1

 

1.07                          “Annual
Discretionary Allocation Account” shall mean a notional, bookkeeping
account established under the Plan to reflect the amounts credited in a Plan
Year with respect to a Participant’s Annual Discretionary Allocations for such
Plan Year in accordance with Section 6.01 and the provisions of the
applicable Annual Enrollment Materials, as adjusted to reflect all applicable earnings
crediting pursuant to Section 8.01.

 

1.08                          “Annual
Discretionary Allocation Crediting Date” shall mean with respect to any
Annual Discretionary Allocation, the date used to determine the Annual
Discretionary Allocation Market Value of a share of Company Stock for purposes
of determining the number of Share Units to be credited to a Participant’s
Annual Discretionary Allocation Account, which date shall be the date specified
by the Committee for the crediting of that Annual Discretionary Allocation.

 

1.09                          “Annual
Discretionary Allocation Market Value” of a share of Company Stock with
respect to an Annual Discretionary Allocation shall mean the Fair Market Value
thereof on the Annual Discretionary Allocation Crediting Date.

 

1.10                          “Annual
Election Form” shall mean the Annual Election Form required by the
Committee to be submitted by a Participant in connection with the Participant’s
Annual Participant Deferral Percentage election with respect to a given Plan
Year.

 

1.11                          “Annual
Enrollment Materials” shall mean, for any Plan Year, the Annual Election
Form, the Distribution Election Form and any other forms, documents or
materials concerning the terms of any Participant deferral of Eligible
Compensation, any Annual Stock Match and any Annual Discretionary Allocation
for such Plan Year.

 

1.12                          “Annual
Participant Deferral Percentage” shall mean the percentage of Eligible
Compensation a Participant elects to defer in respect of a particular Plan Year
pursuant to Section 4.02.

 

1.13                          “Annual
Stock Match” shall mean the aggregate amount credited to a Participant in
respect of a particular Plan Year pursuant to Section 5.02.

 

1.14                          “Annual
Stock Match Account” shall mean a notional, bookkeeping account established
under the Plan to reflect the amount credited in a Plan Year with respect to a
Participant’s Annual Stock Match for such Plan Year in accordance with Section 5.02
and the provisions of the applicable Annual Enrollment Materials, as adjusted
to reflect all applicable earnings crediting pursuant to Section 8.01.

 

1.15                          “Board”
shall mean the board of directors of the Company.

 

1.16                          “Change
in Control” shall mean any transaction or series of transactions that
constitutes a change in the ownership or effective control of the Company or a
change in the ownership of a substantial portion of the assets of the Company,
in each case within the meaning of Section 409A of the Code.

 

2

 

1.17                          “Claimant”
shall have the meaning set forth in Section 11.01.

 

1.18                          “Code”
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time, and all regulations, interpretations and administrative guidance issued
thereunder.

 

1.19                          “Committee”
shall mean the Compensation and Benefits Committee of the Board or such other committee
designated by the Board to administer the Plan.  Any reference herein to the
Committee shall be deemed to include any  person or
subcommittee to whom any duty of the Committee has been delegated pursuant to Section 2.02.

 

1.20                          “Company”
shall mean Ameriprise Financial, Inc., a Delaware corporation, and any
successor to all or substantially all of its assets or business.

 

1.21                          “Company
Stock” shall mean the common stock, par value $0.01 per share, of the
Company.

 

1.22                          “Disability”
shall mean, with respect to a Participant, the Participant is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months.  In making its determination, the Committee
shall be guided by the prevailing authorities applicable under Section 409A
of the Code.

 

1.23                          “Distribution
Election” shall mean an election made in accordance with Section 4.03.

 

1.24                          “Distribution
Election Form” shall mean the Distribution Election Form required by
the Committee to be submitted by a Participant with respect to a Distribution
Election for a given Plan Year.

 

1.25                          “Elected
Amount” shall mean the aggregate amount a Participant elects to defer in
respect of a particular Plan year pursuant to Section 4.02.

 

1.26                          “Election
Form” shall mean, with respect to any Annual Deferral Account, the Annual
Election Form, and the Distribution Election Form or the Amended
Distribution Election Form last submitted by the Participant, with respect
to that Annual Deferral Account.

 

1.27                          “Eligible
Compensation” shall mean, for any Plan Year, the Financial Planning GDC or
other items of compensation designated by the Committee in the applicable
Annual Enrollment Materials as eligible for deferral under the Plan for such
Plan Year.

 

1.28                          “Eligible
Financial Advisor” shall mean an Advisor who meets eligibility criteria
established by the Committee to participate in the Plan for a given Plan Year.

 

3

 

1.29                          “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, and all regulations, interpretations and
administrative guidance issued thereunder.

 

1.30                          “Fair
Market Value” of a share of Company Stock on a given date shall mean the
per-share closing price of Company Stock as reported on the NYSE composite tape
on such date, or, if there is no such reported sale price of Company Stock on
the NYSE composite tape on such date, then the per-share closing price of
Company Stock as reported on the NYSE composite tape on the last previous day
on which sale price was reported on the NYSE composite tape.  If at any time the Company Stock is no longer
listed or traded on the NYSE, the Fair Market Value of a share of Company Stock
shall be calculated in such manner as may be determined by the Committee from
time to time.

 

1.31                          “Financial
Planning GDC” shall mean GDC from any financial plan account governed by an
ADV that requires an annual written deliverable.

 

1.32                          “FINRA”
shall mean the Financial Industry Regulatory Authority, Inc.

 

1.33                          “Franchise
Agreement” shall mean an Independent Advisor Business Franchise Agreement,
including all addenda and amendments thereto, entered into between a
Participating Company and an Advisor.

 

1.34                          “GDC”
shall mean a Participant’s gross dealer concessions which shall be expressed in
U.S. dollars.

 

1.35                          “Newly
Eligible Financial Advisor” shall mean an Advisor who becomes eligible to
participate in the Plan during a Plan Year and who has not previously
participated in the Plan or an elective account-balance deferred compensation
arrangement (as defined for purposes of Section 409A of the Code) of the
Company or a Participating Company, as determined by the Committee and to the
extent permissible under Section 409A of the Code.  An Advisor shall become a Newly Eligible
Financial Advisor as of the Plan Entry Date immediately following such Advisor’s
satisfaction of the Plan’s eligibility criteria, including the selection of
such Advisor as an Eligible Financial Advisor by the Committee.

 

1.36                          “NYSE”
shall mean the New York Stock Exchange.

 

1.37                          “Participant”
shall mean any Eligible Financial Advisor who commences participation in the
Plan and whose participation in the Plan has not terminated.  A spouse or former spouse of a Participant
shall not be treated as a Participant in the Plan or have an account balance
under the Plan, even if he or she has an interest in the Participant’s benefits
under the Plan as a result of applicable law or property settlements resulting
from legal separation or divorce.

 

1.38                          “Participating
Company” shall mean, as applicable, the Company or any of its subsidiaries
listed on Schedule A attached hereto, as such Schedule A may be amended by the
Committee, in its sole discretion, from time to time.

 

4

 

1.39                          “Plan”
shall mean the Ameriprise Financial Deferred Equity Program for Independent
Financial Advisors, which shall be evidenced by this instrument and by the
Annual Enrollment Materials, as they may be amended from time to time.

 

1.40                          “Plan
Accounts” shall mean the Annual Deferral Accounts, the Annual Stock Match
Accounts, the Annual Discretionary Allocation Accounts and the T & O
Accounts established under the Plan.

 

1.41                          “Plan
Entry Date” shall mean, with respect to a Newly Eligible Financial Advisor,
the date during a Plan Year as of which the Newly Eligible Financial Advisor
becomes eligible to participate in the Plan. 
The Plan Entry Dates for a Plan Year shall be determined by the
Committee.

 

1.42                          “Plan
Year” shall mean a period with a duration defined by the Committee from
time to time under the Plan.  Each Plan
Year must be designated by the Committee on or before the December 31 of
the calendar year preceding the calendar year in which the Plan Year commences,
and in accordance with the requirements of Section 409A.

 

1.43                          “Reference
Date” shall mean the date used to determine the Fair Market Value of a share
of Company Stock for purposes of determining the number of Share Units to be
credited to a Participant’s Plan Accounts, which date shall be, unless
otherwise determined by the Committee and approved by the Board:  (a) with respect to dividend payments,
the date dividends are paid on Company Stock; (b) with respect to the
Elected Amounts, the last trading day prior to and including the last day of a
given Service Period; and (c) with respect to any payments pursuant to Section 4.05(b),
the last trading day of the January that includes the last day of the Plan
Year to which the relevant deferrals relate.

 

1.44                          “Return
of Excess Deferrals” shall mean the amount withheld from a Participant’s
Eligible Compensation and credited to his or her Annual Deferral Account during
the Plan Year in excess of the Participant’s Elected Amount or the Maximum
Deferral Limit to be paid to the Participant by a Participating Company in
accordance with Section 4.05(b).

 

1.45                          “Securities
Act” shall mean the Securities Act of 1933, as amended, and all
regulations, interpretations and administrative guidance issued thereunder.

 

1.46                          “Service
Period” shall mean the service periods within a Plan Year, the first of
which begins on the first day of such Plan Year, established by the Committee
for the crediting of Share Units during such Plan Year.

 

1.47                          “Settlement
Date” shall mean, unless otherwise determined by the Committee, the date on
which shares of Company Stock shall be delivered or cash paid in settlement of
Share Units or distribution of a Plan Account in accordance with Section 4.08,
5.05 or 6.05, or Article 9.

 

5

 

1.48                          “Share
Unit” shall mean a unit credited to a Participant’s Plan Accounts in
accordance with the terms and conditions of the Plan.  Subject to adjustment pursuant to Section 8.02,
each Share Unit shall represent the right to receive a share of Company Stock
or the value thereof at the time or times designated in the Plan.

 

1.49                          “Stock
Match Crediting Date” shall mean with respect to any Plan Year, the date
used to determine the Stock Match Market Value of a share of Company Stock for
purposes of determining the number of Share Units to be credited in respect of
such Plan Year to a Participant’s Annual Stock Match Account, which date shall
be, unless otherwise determined by the Committee, the last trading day of February following
the end of the applicable Plan Year.

 

1.50                          “Stock
Match Market Value” of a share of Company Stock with respect to an Annual
Stock Match shall mean the Fair Market Value thereof on the Stock Match
Crediting Date.

 

1.51                          “T &
O Plan Account” shall mean the account to which amounts received and
adjusted pursuant to the terms of the Transition and Opportunity Stock Program
have been credited.

 

1.52                          “Termination
of Franchise Agreement” shall mean, with respect to a Participant, the
termination of such Participant’s Franchise Agreement and the subsequent
provision of all services to a Participating Company or any of their
affiliates, if applicable, voluntarily or involuntarily, under circumstances
that constitute a “separation from service” for purposes of Section 409A
of the Code.  For purposes of the payment
provisions of Sections 4.08, 5.05 and 6.05, and Article 9, a Participant
who transfers to employment status will not be deemed to have a “Termination of
Franchise Agreement” (unless such transfer constitutes a “separation from service”
for purposes of Section 409A of the Code because of the level of services
to be rendered by the Participant as an employee) until the Participant’s
employment with the Company and any Participating Company terminates under
circumstances that constitute a “separation from service” for purposes of Section 409A
of the Code.

 

1.53                          “Transition
and Opportunity Stock Program” shall mean the one-time stock bonus program
offered by the Company in 2005 to Eligible Financial Advisors.

 

1.54                          “Trust”
shall mean the trust established in accordance with Article 12.

 

1.55                          “Trustee”
shall mean the trustee of the Trust.

 

1.56                          “Unforeseeable
Emergency” shall mean, with respect to a Participant, a severe financial
hardship to the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of
the Code) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.  In making its determination, the 

 

6

 

Committee shall be guided by the prevailing
authorities applicable under Section 409A of the Code.

 

Article 2

Administration

 

2.01                           Committee
Duties.  This Plan shall be
administered by the Committee.  The
Committee shall also have the discretion and authority to (a) make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of the Plan, and (b) decide or resolve any and all
questions including interpretations of the Plan, as may arise in connection
with the Plan.  When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Company.

 

2.02                           Agents,
Subcommittees and Delegation of Authority. 
In the administration of the Plan, the Committee may, from time to time,
employ or designate agents, including officers of the Company, or a
subcommittee of the Committee, and delegate to them such administrative duties
as it sees fit (including acting through a duly appointed representative) and
may from time to time consult with counsel who may be counsel to any
Participating Company.

 

2.03                           Binding
Effect of Decisions.  The decision or
action of the Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Plan.

 

2.04                           Indemnity
of Committee Members and Others.  All
Participating Companies shall indemnify and hold harmless each member of the
Committee, and any designee, agent or member of a subcommittee to whom duties
of the Committee have been delegated, against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to the Plan, except in the case of willful misconduct by the Committee
or any of its members or any such designee, agent or subcommittee member.

 

Article 3

Available Shares

 

3.01                           Number
of Shares.  Subject to adjustment as
provided in Section 3.03, a total of 8,500,000 shares of Company Stock
shall be authorized for issuance under the Plan.  For purposes of counting shares against the
share reserves under this Section 3.01, credits of Share Units to Plan
Accounts will be counted against the reserve on the date of crediting based on
the number of Share Units so credited. 
If any Share Units credited to Plan Accounts are forfeited or otherwise
terminate without issuance of shares of Company Stock, or any Share Units are
settled for cash or otherwise do not result in the issuance of all or a portion
of the shares of Company Stock, such shares of Company Stock shall, to the
extent of such forfeiture, termination, cash settlement or non-issuance, will
again be available for issuance under the Plan.

 

3.02                           Character
of Shares.  Any shares of Company
Stock issued under the Plan shall consist solely of either shares of Company
Stock repurchased by the Company or treasury shares of Company Stock.

 

7

 

3.03         Anti-Dilution
Adjustment.  In the event of any
change in the outstanding shares of Company Stock by reason of any stock split,
stock dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, reorganization, combination, subdivision or
exchange of shares, a sale by the Company of all or part of its assets, any distribution
to stockholders other than a normal cash dividend, or other extraordinary or
unusual event, the Committee shall make such adjustment in the class and
aggregate number of shares that may be delivered under the Plan as described in
Section 3.01 as may be determined to be appropriate by the Committee, and
such adjustments shall be final, conclusive and binding for all purposes of the
Plan.  Any adjustment or substitution
under this Section 3.03 shall conform to the requirements of Section 409A
of the Code.

 

Article 4

Participant Deferrals

 

4.01         Eligibility.  The Committee shall have sole discretion to
determine in respect of each Plan Year, in accordance with the requirements of Section 409A
of the Code:  (a) the Eligible
Financial Advisors for the Plan Year who shall be permitted to defer Elected
Amounts; (b) the items of Eligible Compensation which may be the subject
of any Elected Amount for the Plan Year; (c) a minimum amount or
percentage of Eligible Compensation in order to effectuate the deferrals
requested by a Participant for the Plan Year (the “Minimum Deferral Threshold”);
(d) a maximum amount or percentage of Eligible Compensation eligible for
deferral by a Participant for a Plan Year (the “Maximum Deferral Limit”); and (e) any
other terms and conditions applicable to the Elected Amount.  The Committee’s selection of an Eligible
Financial Advisor who is permitted to defer Elected Amounts in respect of a
particular Plan Year will not entitle that Advisor to defer Elected Amounts for
any subsequent Plan Year, unless such Advisor is again selected by the
Committee to defer Elected Amounts for such subsequent Plan Year.

 

4.02         Deferral
Election.

 

(a)                                  Deferral Election.  To
the extent permitted by the Committee and subject to the terms and conditions
provided by the Committee, an Eligible Financial Advisor for a given Plan Year
may make an election to defer a percentage of his or her Eligible Compensation
for such Plan Year (the “Annual Participant Deferral Percentage”).  As a condition to being eligible to defer an
Elected Amount for any Plan Year, each Eligible Financial Advisor shall
complete and return to the Committee or its designated agent an Annual Election
Form, a Distribution Election Form and any other form required by the
Committee at the time, and in accordance with the terms and conditions, as the
Committee may establish from time to time, and in accordance with the
requirements of Section 409A of the Code. 
The Committee may in its discretion permit a Newly Eligible Financial
Advisor to complete and return to the Committee or its designated agent an
Annual Election Form, a Distribution Election Form and any other form
required by the Committee within 30 days of the immediately following Plan
Entry Date.  If an election is made for
more than the Maximum Deferral Limit, the amount or percentage deferred shall
be equal to the Maximum Deferral Limit determined by the Committee.

 

(b)                                 Commencement of Participation.  Provided an Eligible Financial Advisor in
respect of a particular Plan Year has met all enrollment requirements set forth
in the Plan and any other requirements imposed by the Committee, including submitting
all Enrollment Forms to

 

8

 

the Committee
within the specified time period, the Eligible Financial Advisor’s designated
deferrals with respect to such Plan Year shall commence as of the first day of
the particular Plan Year (or in the case of a Newly Eligible Financial Advisor,
as of the date such Eligible Employee’s Enrollment Forms are received by the
Committee or its designated agent, but no later than 30 days following the Plan
Entry Date on which such Eligible Financial Advisor first became eligible to
participate in the Plan, provided that such Annual Deferral Election shall apply
only with respect to compensation earned for services performed subsequent to
the time such enrollment forms are received by the Committee or its designated
agent).  If an Eligible Financial Advisor
fails to meet all such requirements within the specified time period with
respect to a Plan Year, such Eligible Financial Advisor shall not be eligible
to defer an Elected Amount respect to such Plan Year.

 

(c)                                  Suspension of Deferrals.

 

(i)                                     Unforeseeable
Emergencies.  If a Participant
experiences an Unforeseeable Emergency, the Participant may petition the
Committee to suspend any deferrals required to be made by the Participant.  A petition shall be made on the form required
by the Committee to be used for such request and shall include all financial
information requested by the Committee in order to make a determination on such
petition, as determined by the Committee in its sole discretion.  The Committee shall determine, in its sole
discretion, whether to approve the Participant’s petition.  If the petition for a suspension is approved,
suspension shall take effect upon the date of approval.  Notwithstanding the foregoing, the Committee
shall not have any right to approve a request for suspension of deferrals if
such approval (or right to approve) would cause the Plan to fail to comply
with, or cause a Participant to be subject to a tax under the provisions of Section 409A
of the Code.

 

(ii)                                  Disability.  From and after the date that a Participant is
deemed to have suffered a Disability, any standing deferral election of the
Participant shall automatically be suspended and no further deferrals shall be
made with respect to the Participant.

 

(iii)                               Resumption of
Deferrals.  If deferrals by a Participant
have been suspended during a Plan Year due to an Unforeseeable Emergency or a
Disability, the Participant will not be eligible to make any further deferrals
in respect of that Plan Year.  The
Participant may be eligible to make deferrals for subsequent Plan Years
provided the Participant is selected to make deferrals for such subsequent Plan
Years and the Participant complies with the election requirements under the
Plan.

 

(d)                                 Subsequent Election. 
The Enrollment Forms submitted by a Participant in respect of a
particular Plan Year will not be effective with respect to any subsequent Plan
Year.  If an Eligible Financial Advisor
is eligible to participate in the Plan for a subsequent Plan Year and the
required Enrollment Forms are not timely delivered for the subsequent Plan
Year, the Participant shall not be eligible to defer an Elected Amount with
respect to such subsequent Plan Year.

 

9

 

4.03         Distribution
Election.

 

(a)                                  Distribution Election. 
The Participant shall make a Distribution Election at the time he or she
completes
his or her Annual Election Form with respect to a given Plan Year
as to the time and form (lump sum or installments) of the distribution of the
Participant’s Plan Accounts for that Plan Year, within the options permitted
under the Annual Enrollment Materials for that Plan Year.

 

(b)                                 Change to Distribution Election.  Subject to any restrictions that may be
imposed by the Committee, a Participant may amend his or her Distribution
Election with respect to any Plan Account by completing and submitting to the
Committee or its designated agent within such time frame as the Committee may
designate, an Amended Distribution Election Form; provided, however,
that such Amended Distribution Election Form (i) is submitted no
later than a date specified by the Committee in accordance with the
requirements of Section 409A of the Code, (ii) shall not take effect
until 12 months after the date on which such Amended Distribution Election Form becomes
effective, and (iii) specifies a new distribution date (or a new initial
distribution date in the case of installment distributions) that is no sooner
than five years after the original distribution date (or the original initial
distribution date in the case of installment distributions), or such later date
specified by the Committee.  To the extent permitted by the Committee and subject to any
restrictions that may be imposed by the Committee, a Participant may amend his or her Distribution Election
to change the distribution method from a lump sum to installments or from installments
to a lump sum.

 

4.04         Annual
Deferral Account.

 

(a)                                  The
aggregate amount that the Participant elected to defer prior to the
commencement of a given Plan Year based on the Participant’s Annual Participant
Deferral Percentage multiplied by the Participant’s aggregated Eligible
Compensation earned for such Plan Year (the “Elected Amount”) will be credited
to the Participant’s Annual Deferral Account. 
A separate Annual Deferral Account shall be established and maintained
for each Participant’s deferrals with respect to a given Plan Year

 

(b)                                 A
Participant’s Elected Amount will be credited to his or her Annual Deferral
Account during the Plan Year on the Reference Date for each Service Period in
the form of Share Units.  Commencing in
the Plan Year that begins in calendar year 2006 and subject to adjustment
pursuant to the provisions of Sections 4.05 and 8.01, the number of Share Units
to be credited with respect to a Service Period shall be determined in
accordance with the following formula: 
the quotient of (A) the product of (i) the Participant’s
Annual Participant Deferral Percentage multiplied by (ii) the Participant’s
Eligible Compensation for such Service Period, divided by (B) the Fair
Market Value of a share of Company Stock on the Reference Date for such Service
Period.  Fractional Share Units, if any,
will be credited to the Participant’s Annual Deferral Account and rounded to
three decimal places.  A separate Annual
Deferral Account shall be established and maintained for each Participant for each
Plan Year.  The Committee may, but is not
required to, make available other investment benchmarks from time to time to
measure the value of a Participant’s Annual Deferral Accounts.

 

10

 

4.05         Correction
of Ineligible Deferrals.

 

(a)                                  Return of Deferrals if Minimum Deferral Threshold Not Met.  Whether a Participant has met the Minimum
Deferral Threshold will be determined by the Committee on the last day of the
applicable Plan Year and will be based on an objective standard.  If a Participant has not meet the Minimum
Deferral Threshold for a given Plan Year, the value of the Share Units credited
during such Plan Year pursuant to a Participant’s Elected Amount (including any
dividends credited on the Participant’s Elected Amount during such Plan Year)
will be distributed to the Participant in cash based on the Fair Market Value
of Company Stock at the time the distribution is processed, but in any case no
later than the March 15 immediately following the Plan Year to which such
deferrals relate.

 

(b)                                 Return of Excess Deferrals. 
On the last day of each Plan Year, the Committee shall determine the
amount of Eligible Compensation earned by each Participant in respect of such
Plan Year.  If the amount withheld from a
Participant’s Eligible Compensation and credited to his or her Annual Deferral
Account during the Plan Year is more than the Participant’s Elected Amount or
the Maximum Deferral Limit, the Company will, or will cause a Participating
Company to:  (i) distribute to the
Participant a lump sum cash payment equal to the excess of the amount withheld
from a Participant’s Eligible Compensation and credited to his or her Annual
Deferral Account during the Plan Year over the Participant’s Elected Amount, or
the excess of the amount withheld from a Participant’s Eligible Compensation
and credited to his or her Annual Deferral Account during the Plan Year over
the Maximum Deferral Limit; and (ii) debit the Participant’s Annual
Deferral Account for that Plan Year by a number of Share Units determined by
dividing (A) the Return of Excess Deferrals by (B) the Fair Market
Value on the applicable Reference Date. 
Any such distribution will be made no later than the March 15
immediately following the end of the Plan Year to which such deferrals relate.

 

4.06         Vesting.  A Participant shall be vested in his or her
Annual Deferral Account in respect of each given Plan Year as set forth in the
Annual Enrollment Materials for such Plan Year. 
The vesting terms of Annual Deferral Accounts set forth in the Annual
Enrollment Materials shall be established by the Committee in its sole
discretion and may vary for each Participant, for each type of account and for
each Plan Year.  As
of the date of a Participant’s Termination of Franchise Agreement (including a
termination for Cause as defined in Section 17 of the Franchise
Agreement), the amounts credited to the Participant’s Annual Deferral Accounts
shall be reduced by the amount which has not become vested in accordance with
the vesting provisions set forth below and in the Annual Enrollment Materials
applicable to such Annual Deferral Account, and such unvested amounts shall be
forfeited by the Participant. 
Notwithstanding anything to the contrary contained in the Plan or any
Annual Enrollment Materials, the Committee shall have the authority,
exercisable in its sole discretion, to accelerate the vesting of any amounts
credited to any Annual Deferral Account of any Participant.

 

4.07         Payment
Medium.  The distribution of a
Participant’s Annual Deferral Accounts shall be paid in Company Stock;
provided, however, any fractional Share Units shall be paid in cash.

 

4.08         Payment
of Annual Deferral Accounts.  Except
as otherwise provided by Article 9, a Participant’s Annual Deferral
Account for a given Plan Year shall be distributed in

 

11

 

accordance with
the Participant’s Distribution Election for such Annual Deferral Account in
effect at the time of distribution.

 

Article 5

Annual Stock Matches

 

5.01                           Annual
Stock Match.  The Committee shall
have sole discretion to determine in respect of each Plan Year and each
Participant:  (a) whether any Annual
Stock Match shall be made; (b) the Participant(s) who shall be
entitled to such Annual Stock Match; (c) the amount of such Annual Stock
Match, which shall be expressed as a percentage of the Participant’s Elected
Amount, less the amount of Return of Excess Deferrals, if any, under Section 4.05(b) (the
“Match Amount”); and (d) any other terms and conditions applicable to such
Annual Stock Match.  The Committee’s
selection of an Eligible Financial Advisor who is entitled to receive an Annual
Stock Match in respect of a particular Plan Year will not entitle that Advisor
to receive an Annual Stock Match for any subsequent Plan Year, unless such
Advisor is again selected by the Committee to receive an Annual Stock Match for
such subsequent Plan Year.  If an
Eligible Financial Advisor fails to meet the requirements for an Annual Stock
Match with respect to a Plan Year, such Eligible Financial Advisor shall not be
eligible to receive an Annual Stock Match with respect to such Plan Year.

 

5.02                           Annual
Stock Match Account.  If a
Participant meets the Minimum Eligible Compensation Requirement (as described
in Section 4.01(c)) for a Plan Year, the Committee may credit.  If a Participant receives an Annual Stock
Match in a Plan Year, the Participant’s Annual Stock Match Account will be
credited with the Match Amount on the Stock Match Crediting Date.  A separate Annual Stock Match Account shall
be established and maintained for each Participant and each Annual Stock
Match.  The number of Share Units to be
credited for such Plan Year on the Stock Match Crediting Date shall be equal to
the quotient of:  (A) the Match Amount,
divided by (B) the Stock Match Market Value of a share of Company
Stock.  Fractional Share Units, if any,
will be credited to the Participant’s Annual Stock Match Account and rounded to
three decimal places.  The Committee may,
but is not required to, make available other investment benchmarks from time to
time to measure the value of a Participant’s Annual Stock Match Accounts.

 

5.03                           Vesting.  A Participant shall be vested in his or her
Annual Stock Match Account in respect of each given Plan Year as set forth in
the Annual Enrollment Materials for such Plan Year.  The vesting terms of Annual Stock Match
Accounts set forth in the Annual Enrollment Materials shall be established by
the Committee in its sole discretion and may vary for each Participant, for
each type of account and for each Plan Year. 
As of the date of a Participant’s Termination of Franchise Agreement
(including a termination for Cause as defined in Section 17 of the
Franchise Agreement), the amounts credited to the Participant’s Stock Match
Accounts shall be reduced by the amount which has not become vested in
accordance with the vesting provisions set forth below and in the Annual
Enrollment Materials applicable to such Stock Match Account, and such unvested
amounts shall be forfeited by the Participant. 
Notwithstanding anything to the contrary contained in the Plan or any
Annual Enrollment Materials, the Committee shall have the authority,
exercisable in its sole discretion, to accelerate the vesting of any amounts
credited to any Annual Stock Match Account of any Participant.

 

12

 

5.04                           Payment
Medium.  The distribution of a
Participant’s Stock Match Account for a given Plan Year shall be paid in
Company Stock or in cash, in the sole discretion of the Participant; provided,
however, if a Participant elects to receive payment in Company Stock, any
fractional Share Units shall be paid in cash. 
A Participant’s election to receive the distribution of his or her Stock
Match Account, if any, for a given Plan Year shall be made in the Annual
Enrollment Materials for that Plan Year or in such other manner permitted by
the Committee.  If a Participant does not
elect the payment medium for his or her Stock Match Account for a given Plan,
the Participant will be deemed to have elected to receive the distribution of
such Stock Match Account in Company Stock.

 

5.05                           Payment
of Stock Match Accounts.  Except as
otherwise provided by Article 9, if a Participants elects to have the
distribution of the Stock Match Account for a given Plan Year to be paid in
cash, each portion of such Stock Match Account shall be distributed as soon as
practicable following the vesting of that portion of the Stock Match Account,
but in no event later than March 15 of the calendar year immediately
following the calendar year in which that portion vests.  If a Participants elects to have the
distribution of the Stock Match Account for a given Plan Year to be paid in
Company Stock, such Stock Match Account shall be distributed at the same time
as the Participant’s Annual Deferral Account for that Plan Year.

 

Article 6

Annual Discretionary Allocations

 

6.01                           Annual
Discretionary Allocation.  A
Participant may be credited with one or more other discretionary allocations in
respect of any Plan Year, expressed as either a flat dollar amount or as a
percentage of one or more items of the Participant’s Eligible Compensation for
the Plan Year, or any combination of the foregoing (the “Annual Discretionary
Allocation Amount”).  The Committee shall
have sole discretion to determine in respect of each Plan Year and each
Participant:  (a) whether any Annual
Discretionary Allocation shall be made; (b) when any Annual Discretionary
Allocation shall be made; (c) the Participant(s) who shall be entitled
to such Annual Discretionary Allocation; (d) the amount of such Annual
Discretionary Allocation; and (e) any other terms and conditions
applicable to such Annual Discretionary Allocation.  The Committee’s selection of an Eligible
Financial Advisor to receive an Annual Discretionary Allocation in respect of a
particular Plan Year will not entitle that Advisor to receive an Annual
Discretionary Allocation for any subsequent Plan Year, unless such Advisor is
again selected by the Committee to receive an Annual Discretionary Allocation
for such subsequent Plan Year.

 

6.02                           Annual
Discretionary Allocation Account.  If
the Committee determines to credit a Participant with an Annual Discretionary
Allocation in a Plan Year, the number of Share Units to be credited for such
Plan Year with effect on the Annual Discretionary Allocation Crediting Date
shall be equal to the quotient of:  (A) the
Annual Discretionary Allocation Amount, divided by (B) the Annual
Discretionary Allocation Market Value of a share of Company Stock.  Fractional Share Units, if any, will be
credited to the Participant’s Annual Discretionary Allocation Account and
rounded to three decimal places.  A
separate Annual Discretionary Allocation Account shall be established and
maintained for each Participant and the Annual Discretionary Allocations made
during each Plan Year.  The Committee
may, but is not required to, make available other investment benchmarks from
time to time to measure the value of a Participant’s Annual Discretionary
Allocation Accounts.

 

13

 

6.03                           Vesting.  A Participant shall be vested in his or her
Annual Discretionary Allocation Account in respect of each given Plan Year as
set forth in materials establishing the Annual Discretionary Allocation(s) for
such Plan Year.  The vesting terms of
Annual Discretionary Allocation Accounts shall be established by the Committee
in its sole discretion and may vary for each Participant, for each type of
account and for each Plan Year.  As of
the date of a Participant’s Termination of Franchise Agreement (including a
termination for Cause as defined in Section 17 of the Franchise
Agreement), the amounts credited to the Participant’s Annual Discretionary
Allocation Accounts shall be reduced by the amount which has not become vested
in accordance with the vesting provisions set forth below and in the Annual
Enrollment Materials applicable to such Annual Discretionary Allocation
Account, and such unvested amounts shall be forfeited by the Participant.  Notwithstanding anything to the contrary
contained in the Plan or any materials establishing an Annual Discretionary
Allocation, the Committee shall have the authority, exercisable in its sole
discretion, to accelerate the vesting of any amounts credited to any Annual
Discretionary Allocation Account of any Participant.

 

6.04                           Payment
Medium.  The distribution of a
Participant’s Annual Discretionary Allocation Account for a given Plan Year
shall be paid in Company Stock or in cash, in the sole discretion of the
Participant; provided, however, if a Participant elects to receive payment in
Company Stock, any fractional Share Units shall be paid in cash.  A Participant’s election to receive the
distribution of his or her Annual Discretionary Allocation Account for a given
Plan Year shall be made by the end of the Plan Year in which the Annual
Discretionary Allocation is made, in the Annual Enrollment Materials for the
following Plan Year or in such other manner permitted by the Committee.  If a Participant does not elect the payment
medium for his or her Annual Discretionary Allocation Account for a given Plan,
the Participant will be deemed to have elected to receive the distribution of
such Annual Discretionary Allocation Account in Company Stock.

 

6.05                           Payment
of Annual Discretionary Allocation Accounts.  Except as otherwise provided by Article 9,
a Participant’s Annual Discretionary Allocation Account for a given Plan Year
shall be distributed at the time specified by the Committee at the time it
first made an Annual Discretionary Allocation for that Plan Year.  If the Committee does not specify the time
for a Participant’s Annual Discretionary Allocation Account for a given Plan
Year to be distributed, such Annual Discretionary Allocation Account shall be
distributed at the same time as the Participant’s Annual Deferral Account for
that Plan Year.  If the Committee does
not specify the time for a Participant’s Annual Discretionary Allocation
Account for a given Plan Year to be distributed and the Participant does not
have an Annual Deferral Account for that Plan Year, each portion of such Annual
Discretionary Allocation Account shall be distributed as soon as practicable
following the vesting of that portion of the Annual Discretionary Allocation
Account, but in no event later than March 15 of the calendar year
immediately following the calendar year in which that portion vests.

 

Article 7

Transition and Opportunity Stock Program

 

The Company established a T & O Plan Account under the Plan
for each Advisor who received a transition and opportunity stock bonus pursuant
to the terms of the Transition and Opportunity Stock Program, and credited all
transition and opportunity bonus amounts to the

 

14

 

respective T & O
Plan Accounts.  T & O Plan
Accounts will be distributed to participating Advisors pursuant to the terms of
the Transition and Opportunity Stock Program. 
The T & O Plan Accounts are not eligible to receive
dividends.  The distribution of a
Participant’s T & O Account shall be paid pursuant to the terms of the
Transition and Opportunity Stock Program.

 

Article 8

Earnings on Plan Accounts

 

8.01         Earnings
Crediting.

 

(a)                                  A
Participant shall, from time to time during such Participant’s period of
participation under the Plan, including during the period following the
Participant’s Termination of Franchise Agreement and until the Settlement Date,
have credited to each of his or her Annual Deferral Accounts, and his or her
Stock Match Accounts and Annual Discretionary Allocation Accounts for which the
Committee has not specified an investment benchmark other than Share Units, on
the applicable Reference Date with respect to dividend payments with additional
Share Units, the number of which shall be equal to the quotient determined by
dividing:  (A) the product of (i) 100%
of each dividend declared and paid by the Company on the Company Stock on a per
share basis and (ii) the number of Share Units recorded in the Participant’s
Annual Deferral Accounts, and his or her Stock Match Accounts and Annual
Discretionary Allocation Accounts for which the Committee has not specified an
investment benchmark other than Share Units (other than the Participant’s T &
O Plan Account) on the record date for the payment of any such dividend, by (B) the
Fair Market Value of a share of Company Stock on the Reference Date for such
dividend, in each case, with fractions computed to three decimal places.

 

(b)                                 With
respect to the Stock Match Accounts and Annual Discretionary Allocation
Accounts for which the Committee has specified an investment benchmark other
than Share Units, a Participant shall, from time to time during such
Participant’s period of participation under the Plan, including during the
period following the Participant’s Termination of Franchise Agreement and until
the Settlement Date, have credited to each of such Stock Match Accounts and
Annual Discretionary Allocation Accounts earnings in accordance with the
applicable investment benchmark.

 

8.02         Anti-Dilution
Adjustment.  In the event of a change
in the outstanding shares of Company Stock by reason of any change in corporate
capitalization, such as a stock split or dividend, or a corporate transaction,
such as any merger of the Company into another corporation, any consolidation of
two or more corporations into another corporation, any separation of a
corporation (including a spin-off or other distribution of stock or property by
a corporation), any reorganization of a corporation (whether or not such
reorganization comes within the definition of such term in Section 368 of
the Code), or any partial or complete liquidation by the Company, the Committee
shall make such adjustment in the class and number of Share Units credited to
Participants’ Plan Accounts to reflect any such change as may be determined to
be appropriate by the Committee, and such adjustments shall be final,
conclusive and binding for all purposes of the Plan.  Any adjustments or substitutions under this Section 8.02
shall conform to the requirements of Section 409A of the Code.

 

15

 

8.03                           Valuation
of Plan Accounts Pending Distribution. 
To the extent that the distribution of any portion of any Plan Account
is deferred, whether pursuant to the terms of the Plan or any Annual Enrollment
Materials, or for any other reason, any amounts remaining to the credit of a
Plan Account shall continue to be adjusted to reflect all applicable earnings
crediting pursuant to Section 8.01.

 

Article 9

Effect of Certain Events

 

9.01                           Death.  In the case of a Participant’s death, all
amounts credited to the Plan Accounts of the affected Participant shall be 100%
vested.  Notwithstanding anything to the
contrary in a Participant’s Distribution Election or otherwise, if a
Participant dies before he or she has received a complete distribution of his
or her Aggregate Vested Balance, the Participant’s estate shall receive the
Participant’s Aggregate Vested Balance, which shall be payable to the
Participant’s estate in a lump sum to be made within 90 days of the date on
which the Committee is notified in writing of the Participant’s death.

 

9.02                           Disability.  In the case of a Participant’s Disability,
all amounts credited to the Plan Accounts of the affected Participant shall be
100% vested.  Notwithstanding anything to
the contrary in a Participant’s Distribution Election or otherwise, a
Participant suffering a Disability shall receive the Aggregate Vested Balance
of his or her Plan Accounts, which shall be paid in a lump sum within 90 days
of the Committee’s determination that the Participant has a Disability.

 

9.03                           Qualified
Transition.  In the case of a
Qualified Transition by a Participant, such Participant’s Plan Accounts shall
be immediately 100% vested. 
Notwithstanding anything to the contrary in a Participant’s Distribution
Election or otherwise, in the event of a Participant’s Qualified Transition,
the balance of the Participant’s Plan Accounts will be paid out in either a
lump sum, or substantially equivalent annual installments, as specified by the
Participant in his or her Distribution Election, in each case commencing, in
accordance with administrative guidelines determined by the Committee, on March 31st
of the year following the year of the Participant’s Qualified Transition.  “Qualified Transition” shall mean, with
respect to a Participant:  (a) the
transfer of 100% of such Participant’s interest in his or her Individual
Financial Advisor Business (as such term is defined in the Franchise Agreement)
and in all client accounts; (b) the Participant’s Termination of Franchise
Agreement; (c) the Participant satisfies any terms imposed by the
Committee regarding a Qualifying Transition, including, but not limited to, the
satisfaction of an age and years of service requirement; and (d) the
Participant remits to the Company a signed non-competition and non-solicitation
and general release provided by the Company.

 

9.04                           Other
Termination of Franchise Agreement. 
Notwithstanding anything to the contrary in a Participant’s Distribution
Election or otherwise, in the event of a Participant’s Termination of Franchise
Agreement for any reason other than a Qualified Distribution, Disability or
death, the portion of the Participant’s Aggregate Vested Balance will be paid
out in either a lump sum, or substantially equivalent annual installments, as
specified by the Participant in his or her Distribution Election, in each case
commencing, in accordance with administrative guidelines determined by the
Committee, on the March 31st of the year following the year of the
Participant’s Termination of Franchise Agreement.

 

16

 

9.05                           Termination
of Employment.  In the event a
Participant transfers to employee status by becoming an employee of the Company
or any Participating Company, the Participant’s Plan Accounts will be paid to
the Participant, to the extent not yet paid, in accordance with the Participant’s
Distribution Election Forms, upon the Participant’s “separation from service”
(for purposes of Section 409A of the Code).

 

9.06                           Transfer
to Employee Status.  In the event a
Participant transfers to employee status by becoming an employee of the Company
or any Participating Company, the Participant’s Plan Accounts will continue to
vest in accordance with Sections 4.06, 5.03 and 6.03.  If employee status is terminated prior to the
date on which the Participant’s Plan Accounts have fully vested, all unvested
portions of the Plan Accounts will be forfeited, unless otherwise determined by
the Committee.

 

9.07                           Change
in Control.  Upon the occurrence of a
Change in Control of the Company, all amounts credited to any and all Plan
Accounts of each Participant as of the effective date of such Change in Control
shall become immediately 100% vested. 
Notwithstanding anything to the contrary set forth in a Participant’s
Annual Distribution Election Form or the Plan, upon the occurrence of a
Change in Control, the Company will, or will cause a Participating Company to,
distribute all previously undistributed Plan Accounts to Participants (or their
estates, as the case may be).

 

9.08                           Unforeseeable
Emergency.  In the event that a
Participant experiences an Unforeseeable Emergency, the Participant may
petition the Committee to receive a partial or full payout of amounts credited
to one or more of the Participant’s Plan Accounts.  The Committee shall determine, in its sole
discretion, whether the requested payout shall be made, the amount of the
payout and the Plan Accounts from which the payout will be made; provided,
however, that the payout shall not exceed the lesser of the Participant’s
Aggregate Vested Balance or the amount reasonably needed to satisfy the
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution. 
In making its determination under this Section 9.08, the Committee
shall be guided by the requirements of Section 409A of the Code and any
other related prevailing legal authorities and the Committee shall take into
account the extent to which a Participant’s Unforeseeable Emergency is or may
be relieved through reimbursement or compensation by insurance or otherwise or
by the liquidation by the Participant of his or her assets (to the extent the
liquidation of such assets would not itself cause severe financial
hardship).  If, subject to the sole
discretion of the Committee, the petition for a payout is approved, the payout
shall be made within 90 days of the date of approval.

 

9.09                           Event
of Taxation.  If, for any reason, all
or any portion of a Participant’s benefit under the Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee for a
distribution of the state, local or foreign taxes owed on that portion of his
or her benefit that has become taxable. 
Upon the grant of such a petition, which grant shall not be unreasonably
withheld, a Participant’s Participating Company shall, to the extent
permissible under Section 409A of the Code, distribute to the Participant
immediately available funds in an amount equal to the state, local and foreign
taxes owed on the portion of the Participant’s benefit that has become taxable
(which amount shall not exceed a Participant’s unpaid Aggregate Vested Balance
under the Plan).  If the petition is
granted, the tax liability distribution shall be made

 

17

 

within 90 days of
the date when the Participant’s petition is granted.  Such a distribution shall affect and reduce
the benefits to be paid under the Plan.

 

9.10                           Plan
Termination.  In the event of a
termination of the Plan as it relates to any Participant, all amounts credited
to any and all Plan Accounts of such Participant as of the effective date of
such termination shall be 100% vested.

 

Article 10

Termination and Amendment

 

10.01                     Termination.  Although the Company may anticipate that it
will continue the Plan for an indefinite period of time, there is no guarantee
that the Company will continue the Plan or will not terminate the Plan at any
time in the future.  Accordingly, the
Company reserves the right to discontinue its sponsorship of the Plan and to terminate
the Plan, at any time, by action of its board of directors.  In addition, the Company may at any time
terminate a Participating Company’s participation in the Plan.  Upon the termination of the Plan with respect
to any Participating Company, subject to Section 8.03, all amounts
credited to each of the Plan Accounts of each affected Participant shall be
100% vested and shall be paid to the Participant or, in the case of the
Participant’s death, to the Participant’s estate, in a lump sum notwithstanding
any elections made by the Participant, and the Annual Election Forms relating
to each of the Participant’s Plan Accounts shall terminate upon full payment of
such Aggregate Vested Balance, except that neither the Company nor any
Participating Company shall have any right to so accelerate the payment of any
amount to the extent such right would cause the Plan to fail to comply with, or
cause a Participant to be subject to a tax under, the provisions of Section 409A
of the Code.

 

10.02                     Amendment.  The Committee may, at any time, amend or
modify the Plan in whole or in part with respect to any or all Participating
Companies; provided, however, that (a) no amendment or
modification shall be effective to decrease or restrict the value of a
Participant’s Aggregate Vested Balance in existence at the time the amendment
or modification is made, calculated as if the Participant had experienced a
Termination of Franchise Agreement as of the effective date of the amendment or
modification, (b) no amendment or modification may be made if such
amendment or modification would cause the Plan to fail to comply with, or cause
a Participant to be subject to tax under the provisions of Section 409A of
the Code, and (c) except as specifically provided in Section 10.01,
no amendment or modification shall be made after a Change in Control which
adversely affects the vesting, calculation or payment of benefits hereunder or
diminishes any other rights or protections any Participant would have had but
for such amendment or modification, unless each affected Participant consents
in writing to such amendment.

 

10.03                     Effect of Payment.  The full payment of the applicable benefit
under the provisions of the Plan shall completely discharge all obligations to
a Participant and his or her estate under the Plan, and each of the Participant’s
Annual Election Forms shall terminate.

 

18

 

Article 11

Claims Procedures

 

11.01                     Presentation of Claim.  Any Participant or estate of a deceased
Participant (such Participant or estate being referred to below as a “Claimant”)
may deliver to the Committee a written claim for a determination with respect
to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days after
such notice was received by the Claimant. 
The claim must state with particularity the determination desired by the
Claimant.  All other claims must be made
within 180 days of the date on which the event that caused the claim to arise
occurred.  The claim must state with
particularity the determination desired by the Claimant.

 

11.02                     Notification of Decision.  The Committee shall consider a Claimant’s
claim within a reasonable time, and shall notify the Claimant in writing:  (a) that the Claimant’s requested
determination has been made, and that the claim has been allowed in full; or (b) that
the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant: 
(i) the specific reason(s) for the denial of the claim, or any
part of it; (ii) specific reference(s) to pertinent provisions of the
Plan upon which  such denial was based; (iii) 
description of any additional material or information necessary  for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary; and (iv) an
explanation of the claim review procedure set forth in Section 11.03.

 

11.03                     Review of a Denied Claim.  Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or
the Claimant’s duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim.  Thereafter, but not later than 30 days after
the review procedure began, the Claimant (or the Claimant’s duly authorized
representative):  (a) may review
pertinent documents; (b) may submit written comments or other documents;
and/or (c) may request a hearing, which the Committee, in its sole
discretion, may grant.

 

11.04                     Decision on Review.  The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee’s decision
must be rendered within 120 days after such date.  Such decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:  (a) specific reasons for the decision; (b) specific
reference(s) to the pertinent Plan provisions upon which the decision was
based; and (c) such other matters as the Committee deems relevant.

 

11.05                     Arbitration.  A Claimant’s compliance with the foregoing
provisions of this Article 11 is a mandatory prerequisite to a Claimant’s
right to commence any arbitration with respect to any claim for benefits under
the Plan.  Any dispute, claim or
controversy that may arise between a Participant and the Company or any other
person (“Claims”) under the Plan is subject to arbitration, unless otherwise
agreed to in writing by the Participant and the Company.  To the extent that such Claims are required
to be arbitrated under the rules, constitutions, or by-laws of the FINRA, as
amended form time to time, they will be arbitrated in accordance with the
policies and procedures established by the FINRA.  If either the FINRA declines to administer an

 

19

 

arbitration of any
Claims or the FINRA rules do not allow for arbitration of any Claims, the
Claims shall be finally decided by arbitration conducted pursuant to the
Commercial Dispute Resolution Procedures of the American Arbitration
Association (“AAA”), and its Supplementary Rules for Securities
Arbitration, or other applicable rules promulgated by the AAA.  In addition, all claims, statutory or
otherwise, which allege discrimination or other violation of employment laws,
including but not limited to claims of sexual harassment, shall be finally
decided by arbitration pursuant to the AAA unless otherwise agreed to in
writing by a Participant and the Company. 
By agreement of a Participant and the Company in writing, disputes may
be resolved in arbitration by a mutually agreed-upon organization other than
the FINRA or the AAA.  In consideration
of the promises and the compensation provided in this Plan, neither a Participant
nor the Company shall have a right (a) to arbitrate a Claim on a class
action basis or in a purported representative capacity on behalf of any
Participants, employees, applicants or other persons similarly situated; (b) to
join or to consolidate in an arbitration Claims brought by or against another
Participant, employee, applicant or the Participant, unless otherwise agreed to
in writing by the Participant and the Company; (c) to litigate any Claims
in court or to have a jury trial on any Claims; and (d) to participate in
a representative capacity or as a member of any class of claimants in an action
in a court of law pertaining to any Claims. 
Nothing in this Plan relieves a Participant or the Company from any
obligation the Participant or the Company may have to exhaust certain administrative
remedies before arbitrating any claims or disputes under this Section 11.05.  Either a Participant or the Company may
compel arbitration of any Claims filed in a court of law.  In addition, either a Participant or the
Company may apply to a court of law for an injunction to enforce the terms of
the Plan pending a final decision on the merits by an arbitration panel
pursuant to this provision.  The Company
shall pay all fees, costs or other charges charged by the AAA or any other
organization administering arbitration proceeding agreed upon pursuant to this Article 11
that are above and beyond the filing fees of the federal or state court in the
jurisdiction in which the dispute arises, whichever is less.  A Participant or the Company shall each be responsible
for their own costs of legal representation, if any, except where such costs of
legal representation may be awarded as a statutory remedy by the
arbitrator.  Any award by an arbitration
panel shall be final and binding upon a Participant or the Company.  Judgment upon the award may be entered by any
court having jurisdiction thereof or having jurisdiction over the relevant
party or its assets.  This provision is
covered and enforceable under the terms of the Federal Arbitration Act.

 

Article 12

Trust

 

12.01                     Establishment of the Trust.  The Company may establish one or more Trusts
to which the Participating Companies may transfer such assets as the
Participating Companies determine in their sole discretion to assist in meeting
their obligations under the Plan.

 

12.02                     Interrelationship of the Plan
and the Trust.  The provisions of the
Plan and the relevant Annual Enrollment Materials shall govern the rights of a
Participant to receive distributions pursuant to the Plan.  The provisions of the Trust shall govern the
rights of the Participating Companies, Participants and the creditors of the
Participating Companies to the assets transferred to the Trust.

 

20

 

12.03                     Distributions from the Trust.  Each Participating Company’s obligations
under the Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the Participating
Company’s obligations under this Agreement.

 

Article 13

Miscellaneous

 

13.01                     Status of Plan.  The Plan is intended to be (a) a plan
that is not qualified within the meaning of Section 401(a) of the
Code and (b) a plan that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employee” within the meaning of ERISA
Sections 201(2), 301(a)(3) and

401(a)(1).  The Plan shall be
administered and interpreted to the extent possible in a manner consistent with
that intent.  All Plan Accounts and all
credits and other adjustments to such Plan Accounts shall be bookkeeping
entries only and shall be utilized solely as a device for the measurement and
determination of amounts to be paid under the Plan.  No Plan Accounts, credits or other
adjustments under the Plan shall be interpreted as an indication that any
benefits under the Plan are in any way funded.

 

13.02                     Section 409A of the Code.  It is intended that the Plan (including all
amendments thereto) comply with provisions of Section 409A of the Code, so
as to prevent the inclusion in gross income of any benefits accrued hereunder
in a taxable year prior to the taxable year or years in which such amount would
otherwise be actually distributed or made available to the Participants.  The Plan shall be administered and interpreted
to the extent possible in a manner consistent with that intent.  Notwithstanding the terms of Sections 4.08,
5.05 and 6.05, and Article 9, to the extent that a distribution to a
Participant who is a Specified Employee at the time of separation from service
is required to be delayed by six months pursuant to Section 409A of the
Code, distribution shall be made no earlier than the six-month anniversary of
the Participant’s Termination of Employment. 
For purposes of the preceding sentence, “Specified Employee” shall mean
a key employee as defined under Section 409A of the Code and Section 416(i) of
the Code (without regard to paragraph (5) thereof) of the Company (or a
controlled group member); the determination of Specified Employees will be
based upon a 12-month period ending December 31st of each year, and
Participants who are Specified Employees during such 12-month period will be
treated as Specified Employees for the 12-month period beginning the next
following April 1st.

 

13.03                     Securities Matters.  The Company shall be under no obligation to
effect the registration pursuant to the Securities Act of any shares of Company
Stock to be issued hereunder or to effect similar compliance under any state
laws.  Notwithstanding anything herein to
the contrary, the Company shall not be obligated to cause to be issued or
delivered any certificates evidencing shares of Company Stock pursuant to the
Plan unless and until the Company is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of any securities
exchange on which shares of Company Stock are traded.  The Committee may require, as a condition to
the issuance and delivery of certificates evidencing shares of Company Stock
pursuant to the terms hereof, that the recipient of such shares make such
covenants, agreements and representations, and that such certificates bear such
legends, as the Committee deems necessary or desirable.

 

21

 

13.04                     Unsecured General Creditor.  Participants and their estates, heirs,
successors and assigns shall have no legal or equitable rights, interests or
claims in any property or assets of a Participating Company.  For purposes of the payment of benefits under
the Plan, any and all of a Participating Company’s, assets, shall be, and
remain, the general, unpledged unrestricted assets of the Participating
Company.  A Participating Company’s
obligation under the Plan shall be merely that of an unfunded and unsecured
promise to pay money in the future.

 

13.05                     Other Benefits and Agreements.  The benefits provided for a Participant under
the Plan are in addition to any other benefits available to such Participant
under any other plan or program for financial advisors of the Participant’s
Participating Company.  The Plan shall
supplement and shall not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.

 

13.06                     Participating Company’s
Liability.  A Participating Company’s
liability for the payment of benefits shall be defined only by the Plan and the
Annual Election Form, as entered into between the Participating Company and a
Participant.  A Participating Company
shall have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Annual Election Form.

 

13.07                     Nonassignability.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transferable.  No
part of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or
any other person’s bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise.

 

13.08                     Prior Beneficiary Designations
Void.  Any beneficiary designations
made under the Plan or any predecessor arrangement thereto shall be null and
void, and of no effect as of January 1, 2009.  Following the death of a Participant, any
payments to be made to the Participant shall be made to such Participant’s
estate.  In the case of a Participant who
made a beneficiary designation prior to the effective date hereof and who dies
on or before December 31, 2008, references herein to the Participant’s
estate shall refer to the Participant’s beneficiary or beneficiaries, and any
payment to be made to such Participant shall be made in accordance with such
Participant’s prior beneficiary designation.

 

13.09                     No Right to Service.  Nothing in the Plan or any Annual Election Form shall
be deemed to give a Participant the right to continue to be retained in the
service of the Company or any Participating Company.

 

13.10                     Furnishing Information.  A Participant or his or her estate will
cooperate with the Committee by furnishing any and all information requested by
the Committee and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as
the Committee may deem necessary.

 

22

 

13.11       Terms.  Whenever any words are used herein in the
masculine, they shall be construed as though they were in the feminine in all
cases where they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would
so apply.

 

13.12       Captions.  The captions of the articles, sections and
paragraphs of the Plan are for convenience only and shall not control or affect
the meaning or construction of any of its provisions.

 

13.13       Governing
Law.  Subject to ERISA, the
provisions of the Plan shall be construed and interpreted according to the
internal laws of the State of Delaware without regard to its conflicts of laws
principles.

 

13.14       Notice.  Any notice or filing required or permitted to
be given to the Committee under the Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

 

Ameriprise
Financial, Inc.

360 Ameriprise
Financial Center

Minneapolis,
Minnesota 55474

Attn:  Vice President, Benefits

 

with a copy to:

 

General Counsel’s
Office

 

Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
or the receipt for registration or certification.

 

Any notice or filing required or permitted to be given
to a Participant under the Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the Participant.

 

13.15       Successors.  The provisions of the Plan shall bind and
inure to the benefit of the Company and its successors and assigns and the Participant
and the Participant’s estate, heirs and assigns.

 

13.16       Spouse’s
Interest.  The interest in the
benefits hereunder of a spouse of a Participant who has predeceased the
Participant shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate
succession.

 

13.17       Validity.  In case any provision of the Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but the Plan shall be construed and enforced
as if such illegal or invalid provision had never been inserted herein.

 

13.18       Incompetent.  If the Committee determines in its discretion
that a benefit under the Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of

 

23

 

handling the
disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and
custody of such minor, incompetent or incapable person.  The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to
distribution of the benefit.  Any payment
of a benefit shall be a payment for the account of the Participant and the
Participant’s estate, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.

 

13.19                     Insurance.  The Company, on its own behalf or on behalf
of the trustee of the Trust, and, in its sole discretion, may, or may cause a
Participating Company to, apply for and procure insurance on the life of the
Participant, in such amounts and in such forms as the Trust may choose.  The Company, the Participating Company or the
trustee of the Trust, as the case may be, shall be the sole owner and
beneficiary of any such insurance.  The
Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Company or a Participating Company, as the case may
be, shall submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company or companies
to whom the Company or such Participating Company has applied for insurance.

 

13.20                     Legal Fees to Enforce Rights
After Change in Control.  The Company
is aware that upon the occurrence of a Change in Control, the Board (which
might then be composed of new members) or a shareholder of the Company, or of
any successor corporation might then cause or attempt to cause the Company or
such successor to refuse to comply with its obligations under the Plan and
might cause or attempt to cause the Company to institute, or may institute,
arbitration or litigation seeking to deny Participants the benefits intended
under the Plan.  In these circumstances,
the purpose of the Plan could be frustrated. 
Accordingly, if, following a Change in Control, it should appear to any
Participant that the Company or any successor corporation or any Participating
Company or successor corporation has failed to comply with any of its
obligations under the Plan or any agreement thereunder or, if the Company, a
Participating Company or any other person takes any action to declare the Plan
void or unenforceable or institutes any arbitration, litigation or other legal
action designed to deny, diminish or to recover from any Participant the
benefits intended to be provided, then the Company and the applicable Participating
Company irrevocably authorize such Participant to retain counsel of his or her
choice at the expense of the Company and the Participating Company to represent
such Participant in connection with the initiation or defense of any
arbitration, litigation or other legal action, whether by or against the
Company, the Participating Company or any director, officer, shareholder or
other person affiliated with the Company, the Participating Company or any
successor thereto in any jurisdiction; provided, however, that in the event
that the trier in any such legal action determines that the Participant’s claim
was not made in good faith or was wholly without merit, the Participant shall
return to the Company any amount received pursuant to this Section 13.20.

 

13.21                     Electronic Documents Permitted.  Subject to applicable law, Election Forms,
Annual Enrollment Materials, and other forms or documents may be in electronic
format or made available through means of online enrollment or other electronic
transmission.

 

*  * 
*  *  *

 

24

 

Ameriprise
Financial

Deferred
Compensation Plan

for
Independent Financial Advisors

 

Schedule
A

April 23,
2008

 

Participating Companies

 

·                  Ameriprise Bank, FSB

·                  Ameriprise Enterprise Investment
Services, Inc.

·                  Ameriprise Financial Services Inc.

·                  RiverSource Distributors, Inc.

·                  RiverSource Investments, LLC

·                  RiverSource Service Corporation

·                  RiverSource Life Insurance Company

·                  RiverSource Life Insurance Co. of New
York

·                  IDS Property Casualty Insurance
Company

·                  Ameriprise Trust Company

 

25Exhibit 10.4

 

PURCHASE AND SALE
AGREEMENT

 

BY AND BETWEEN

 

CONSOLIDATED THEATRES,
LLC

 

THE OTHER SELLERS
IDENTIFIED HEREIN

 

AND

 

REGAL CINEMAS, INC.

 

 

JANUARY 14, 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I PURCHASE AND SALE; CLOSING

  	
   

  	
  1

  
	
  SECTION 1.1.

  	
  Transfer of Options and Partnership Interests

  	
   

  	
  1

  
	
  SECTION 1.2.

  	
  Closing

  	
   

  	
  2

  
	
  SECTION 1.3.

  	
  Purchase Price; Closing Cash Payment

  	
   

  	
  2

  
	
  SECTION 1.4.

  	
  Closing Deliveries

  	
   

  	
  2

  
	
  SECTION 1.5.

  	
  Adjustment to Purchase Price

  	
   

  	
  4

  
	
  SECTION 1.6.

  	
  Escrow

  	
   

  	
  6

  
	
  SECTION 1.7.

  	
  Retained Leases

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II REPRESENTATIONS AND WARRANTIES
  REGARDING THE TRANSACTIONS

  	
   

  	
  6

  
	
  SECTION 2.1.

  	
  Organization

  	
   

  	
  6

  
	
  SECTION 2.2.

  	
  Authority

  	
   

  	
  6

  
	
  SECTION 2.3.

  	
  No Conflicts; Required Filings; and Consents

  	
   

  	
  7

  
	
  SECTION 2.4.

  	
  Ownership of Options and Partnership Interests

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES
  REGARDING THE COMPANIES

  	
   

  	
  8

  
	
  SECTION 3.1.

  	
  Organization and Qualification; Subsidiaries

  	
   

  	
  8

  
	
  SECTION 3.2.

  	
  Capitalization

  	
   

  	
  9

  
	
  SECTION 3.3.

  	
  Financial Statements; Indebtedness

  	
   

  	
  9

  
	
  SECTION 3.4.

  	
  Absence of Certain Changes or Events

  	
   

  	
  10

  
	
  SECTION 3.5.

  	
  Absence of Litigation

  	
   

  	
  10

  
	
  SECTION 3.6.

  	
  Licenses and Permits; Compliance with Laws

  	
   

  	
  11

  
	
  SECTION 3.7.

  	
  Taxes

  	
   

  	
  12

  
	
  SECTION 3.8.

  	
  Intellectual Property

  	
   

  	
  14

  
	
  SECTION 3.9.

  	
  Material Contracts

  	
   

  	
  14

  
	
  SECTION 3.10.

  	
  Employee Benefit Plans

  	
   

  	
  16

  
	
  SECTION 3.11.

  	
  Properties; Assets

  	
   

  	
  17

  
	
  SECTION 3.12.

  	
  Employees; Labor Relations

  	
   

  	
  20

  
	
  SECTION 3.13.

  	
  Environmental Matters

  	
   

  	
  21

  
	
  SECTION 3.14.

  	
  Insurance

  	
   

  	
  22

  
	
  SECTION 3.15.

  	
  Affiliate Transactions

  	
   

  	
  23

  
	
  SECTION 3.16.

  	
  Brokers

  	
   

  	
  23

  
	
  SECTION 3.17.

  	
  Notes and Accounts Receivable

  	
   

  	
  23

  
	
  SECTION 3.18.

  	
  Powers of Attorney

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
  PURCHASER

  	
   

  	
  23

  
	
  SECTION 4.1.

  	
  Organization and Qualification

  	
   

  	
  23

  
	
  SECTION 4.2.

  	
  Authority

  	
   

  	
  23

  
	
  SECTION 4.3.

  	
  No Conflict; Required Filings and Consents

  	
   

  	
  24

  
	
  SECTION 4.4.

  	
  Absence of Litigation

  	
   

  	
  25

  

 

i

 

	
  SECTION 4.5.

  	
  Brokers

  	
   

  	
  25

  
	
  SECTION 4.6.

  	
  Financial Ability

  	
   

  	
  25

  
	
  SECTION 4.7.

  	
  Disclaimer of Other Representations and Warranties

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS

  	
   

  	
  26

  
	
  SECTION 5.1.

  	
  Affirmative Covenants of Sellers

  	
   

  	
  26

  
	
  SECTION 5.2.

  	
  Restrictive Covenants of Sellers

  	
   

  	
  26

  
	
  SECTION 5.3.

  	
  Tax Matters

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI ADDITIONAL AGREEMENTS

  	
   

  	
  29

  
	
  SECTION 6.1.

  	
  Access and Information

  	
   

  	
  29

  
	
  SECTION 6.2.

  	
  Confidentiality

  	
   

  	
  29

  
	
  SECTION 6.3.

  	
  Further Action; Efforts Regarding Closing

  	
   

  	
  30

  
	
  SECTION 6.4.

  	
  Public Announcements

  	
   

  	
  32

  
	
  SECTION 6.5.

  	
  Employee Matters

  	
   

  	
  32

  
	
  SECTION 6.6.

  	
  Labor Matters; WARN

  	
   

  	
  32

  
	
  SECTION 6.7.

  	
  Information, Etc

  	
   

  	
  33

  
	
  SECTION 6.8.

  	
  Notification

  	
   

  	
  33

  
	
  SECTION 6.9.

  	
  Contacts with Suppliers, Customers and Other Parties

  	
   

  	
  35

  
	
  SECTION 6.10.

  	
  Kingstowne Litigation

  	
   

  	
  35

  
	
  SECTION 6.11.

  	
  Landlord Approvals, Estoppels; SNDAs; Memoranda of
  Leases

  	
   

  	
  36

  
	
  SECTION 6.12.

  	
  Non-Competition Agreement Amendment

  	
   

  	
  37

  
	
  SECTION 6.13.

  	
  ABRY Indemnification Letter

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII CLOSING CONDITIONS

  	
   

  	
  37

  
	
  SECTION 7.1.

  	
  Conditions to Obligations of Purchaser and Sellers

  	
   

  	
  37

  
	
  SECTION 7.2.

  	
  Additional Conditions to Obligations of Purchaser

  	
   

  	
  38

  
	
  SECTION 7.3.

  	
  Additional Conditions to Obligations of Sellers

  	
   

  	
  40

  
	
  SECTION 7.4.

  	
  Frustration of Closing Conditions

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII INDEMNIFICATION

  	
   

  	
  41

  
	
  SECTION 8.1.

  	
  Indemnification of Purchaser

  	
   

  	
  41

  
	
  SECTION 8.2.

  	
  Indemnification of Sellers

  	
   

  	
  43

  
	
  SECTION 8.3.

  	
  Notice of Claim

  	
   

  	
  45

  
	
  SECTION 8.4.

  	
  Defense of Third-Party Claims

  	
   

  	
  45

  
	
  SECTION 8.5.

  	
  Resolution of Notice of Claim

  	
   

  	
  46

  
	
  SECTION 8.6.

  	
  Survival of Covenants, Representations and
  Warranties

  	
   

  	
  48

  
	
  SECTION 8.7.

  	
  Exclusive Remedy; Non-Recourse

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX TERMINATION, AMENDMENT AND WAIVER

  	
   

  	
  49

  
	
  SECTION 9.1.

  	
  Termination

  	
   

  	
  49

  
	
  SECTION 9.2.

  	
  Effect of Termination

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X GENERAL PROVISIONS

  	
   

  	
  51

  
	
  SECTION 10.1.

  	
  Notices

  	
   

  	
  51

  
	
  SECTION 10.2.

  	
  Certain Definitions

  	
   

  	
  52

  
	
  SECTION 10.3.

  	
  Headings; Interpretation

  	
   

  	
  58

  

 

ii

 

	
  SECTION 10.4.

  	
  Severability

  	
   

  	
  58

  
	
  SECTION 10.5.

  	
  Entire Agreement

  	
   

  	
  58

  
	
  SECTION 10.6.

  	
  Assignment

  	
   

  	
  59

  
	
  SECTION 10.7.

  	
  Third Party Beneficiaries

  	
   

  	
  59

  
	
  SECTION 10.8.

  	
  Expenses

  	
   

  	
  59

  
	
  SECTION 10.9.

  	
  Specific Performance

  	
   

  	
  59

  
	
  SECTION 10.10.

  	
  Amendments; Waiver

  	
   

  	
  59

  
	
  SECTION 10.11.

  	
  Governing Law; Consent to Jurisdiction; Waiver of
  Jury Trial

  	
   

  	
  59

  
	
  SECTION 10.12.

  	
  No Recourse

  	
   

  	
  61

  
	
  SECTION 10.13.

  	
  Counterparts

  	
   

  	
  61

  
	
  SECTION 10.14.

  	
  Time of Essence

  	
   

  	
  61

  
	
  SECTION 10.15.

  	
  Privilege and Related Matters

  	
   

  	
  61

  

 

iii

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Subsidiaries of the Partnership

  
	
  Exhibit B

  	
  Form of Exercise Notice

  
	
  Exhibit C

  	
  Form of Lessor Estoppel

  
	
  Exhibit D

  	
  Form of ABRY Indemnification Letter

  
	
  Exhibit E

  	
  Sellers’ Counsel Opinions

  
	
  Exhibit F

  	
  Form of Escrow Agreement

  

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  1.3(c)

  	
  Closing Cash Consideration Calculation

  
	
  2.3

  	
  Consents and Approvals

  
	
  3.1

  	
  Jurisdiction for non-Delaware Companies

  
	
  3.3(a)

  	
  Financial Statements

  
	
  3.3(b)

  	
  Indebtedness

  
	
  3.3(c)

  	
  Theatre Cash Flow

  
	
  3.4

  	
  Absence of Certain Changes or Events

  
	
  3.5

  	
  Litigation

  
	
  3.6(a)

  	
  Permits

  
	
  3.7(a)

  	
  Taxes

  
	
  3.7(b)

  	
  Tax Notices

  
	
  3.8(a)

  	
  Intellectual Property Rights

  
	
  3.9

  	
  Material Contracts

  
	
  3.10

  	
  Employee Benefit Plans

  
	
  3.11(a)

  	
  Non-Owned Personal Property

  
	
  3.11(b)

  	
  Leased Real Property

  
	
  3.11(h)

  	
  Notice of Taking

  
	
  3.11(i)

  	
  Notice of Certain Violations

  
	
  3.12(a)

  	
  Highly Compensated Employees

  
	
  3.12(b)

  	
  Labor Relations

  
	
  3.13(a)

  	
  Environmental Compliance

  
	
  3.13(b)

  	
  Environmental Notice

  
	
  3.13(c)

  	
  Environmental Orders

  
	
  3.13(d)

  	
  Hazardous Substances

  
	
  3.13(e)

  	
  Environmental Permits and Consents

  
	
  3.13(f)

  	
  Hazardous Substances

  
	
  3.13(g)

  	
  Environmental Conditions

  
	
  3.14(a)

  	
  Insurance Polices

  
	
  3.14(b)

  	
  Other Insurance Matters

  
	
  3.15

  	
  Affiliate Transactions

  
	
  5

  	
  Exceptions to Covenants of Sellers

  
	
  5.1

  	
  Certain Employees

  

 

iv

 

Index of Defined Terms

 

	
   

  	
   

  	
  Section

  
	
  AAA

  	
   

  	
  8.5(c)

  
	
  Adjustment Time

  	
   

  	
  1.3(b)

  
	
  Affiliate

  	
   

  	
  10.2

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Antitrust Division

  	
   

  	
  6.3(b)

  
	
  Audited Financial Statements

  	
   

  	
  3.3(a)

  
	
  Bank Facility

  	
   

  	
  10.2

  
	
  Benefit Plans

  	
   

  	
  3.10(a)

  
	
  Business Day

  	
   

  	
  10.2

  
	
  Claim

  	
   

  	
  8.2(b)(a)

  
	
  Closing

  	
   

  	
  1.2

  
	
  Closing Balance Sheet

  	
   

  	
  1.5(a)

  
	
  Closing Cash

  	
   

  	
  10.2

  
	
  Closing Cash Payment

  	
   

  	
  1.3(c)

  
	
  Closing Date

  	
   

  	
  1.2

  
	
  Closing Indebtedness

  	
   

  	
  10.2

  
	
  Closing Statement

  	
   

  	
  1.5(a)

  
	
  Closing Working Capital

  	
   

  	
  10.2

  
	
  Closing Working Capital Adjustment

  	
   

  	
  10.2

  
	
  COBRA

  	
   

  	
  3.10(l)

  
	
  Code

  	
   

  	
  3.10(a)

  
	
  Company Financial Statements

  	
   

  	
  3.3(a)

  
	
  Companies

  	
   

  	
  Recitals

  
	
  Company Material Adverse Effect

  	
   

  	
  10.2

  
	
  Confidentiality Agreement

  	
   

  	
  6.2

  
	
  Contested Claim

  	
   

  	
  8.5(b)

  
	
  Control, controlled by, under common control with

  	
   

  	
  10.2

  
	
  Damages

  	
   

  	
  8.1(a)

  
	
  Deductible

  	
   

  	
  8.1(c)

  
	
  Divestiture

  	
   

  	
  10.2

  
	
  Dispute Notice

  	
   

  	
  1.5(b)

  
	
  EGTRRA

  	
   

  	
  3.10(g)

  
	
  Encumbrances

  	
   

  	
  10.2

  
	
  Enterprise Value

  	
   

  	
  10.2

  
	
  Environmental Law

  	
   

  	
  10.2

  
	
  ERISA

  	
   

  	
  3.10(a)

  
	
  ERISA Affiliate

  	
   

  	
  3.10(a)

  
	
  ERISA Plan

  	
   

  	
  3.10(a)

  
	
  Escrow Amount

  	
   

  	
  10.2

  
	
  Escrow Agent

  	
   

  	
  10.2

  
	
  Escrow Agreement

  	
   

  	
  10.2

  
	
  Estimated Closing Statement

  	
   

  	
  1.3(b)

  
	
  Estimated Enterprise Value

  	
   

  	
  1.3(b)

  
	
  Estimated Option Purchase Price

  	
   

  	
  1.3(b)

  

 

v

 

	
   

  	
   

  	
  Section

  
	
  Estimated Purchase Price

  	
   

  	
  1.3(b)

  
	
  Exercise Notice

  	
   

  	
  1.1

  
	
  Final Award

  	
   

  	
  8.5(f)

  
	
  Final Cash Payment

  	
   

  	
  1.5(d)

  
	
  Final Purchase Price

  	
   

  	
  1.5(d)

  
	
  FTC

  	
   

  	
  6.3(b)

  
	
  GAAP

  	
   

  	
  1.5(d)

  
	
  Governmental Entity

  	
   

  	
  10.2

  
	
  GUST

  	
   

  	
  3.10(g)

  
	
  Hazardous Substance

  	
   

  	
  10.2

  
	
  HSR Act

  	
   

  	
  2.3(b)

  
	
  Indemnified Parties

  	
   

  	
  8.2(b)

  
	
  Indemnitee

  	
   

  	
  8.2(b)(a)

  
	
  Indemnitor

  	
   

  	
  8.2(b)(a)

  
	
  Independent Accountants

  	
   

  	
  1.5(c)

  
	
  Intellectual Property

  	
   

  	
  10.2

  
	
  Interim Balance Sheet

  	
   

  	
  3.3(a)

  
	
  J.A.M.S.

  	
   

  	
  8.5(c)

  
	
  Knowledge

  	
   

  	
  10.2

  
	
  Landlord Approval

  	
   

  	
  10.2

  
	
  Law

  	
   

  	
  10.2

  
	
  Lease

  	
   

  	
  3.11(b)

  
	
  Leased Real Property

  	
   

  	
  3.11(b)

  
	
  Lessor Estoppel

  	
   

  	
  6.11(b)

  
	
  Limited-Indemnity Cap

  	
   

  	
  8.1(c)

  
	
  Limited-Indemnity Items

  	
   

  	
  8.1(a)

  
	
  Material Contracts

  	
   

  	
  3.9(a)

  
	
  Notice of Claim

  	
   

  	
  8.3(a)

  
	
  Notice of Divestiture

  	
   

  	
  6.3(c)

  
	
  Option

  	
   

  	
  Recitals

  
	
  Option Exercise Price

  	
   

  	
  Recitals

  
	
  Order

  	
   

  	
  10.2

  
	
  Pending Claim

  	
   

  	
  1.3(a)

  
	
  Permitted Encumbrances

  	
   

  	
  10.2

  
	
  Permits

  	
   

  	
  3.6

  
	
  Person

  	
   

  	
  10.2(kk)

  
	
  Purchase Price

  	
   

  	
  1.3(a)

  
	
  Purchaser Indemnified Items

  	
   

  	
  8.1(a)

  
	
  Purchaser-Indemnified Persons

  	
   

  	
  8.1(a)

  
	
  Related Agreement

  	
   

  	
  10.2

  
	
  Release

  	
   

  	
  10.2

  
	
  Seller and Sellers

  	
   

  	
  Preamble

  
	
  Seller Account

  	
   

  	
  1.4(b)(ii)

  
	
  Seller COBRA Obligations

  	
   

  	
  6.15

  
	
  Seller Parties

  	
   

  	
  6.1(b)

  
	
  Subsidiary

  	
   

  	
  10.2

  

 

vi

 

	
   

  	
   

  	
  Section

  
	
  Supplemental Financial Statements

  	
   

  	
  3.3(a)

  
	
  Survival Date

  	
   

  	
  10.2(oo)

  
	
  Tax and Taxes

  	
   

  	
  10.2

  
	
  Tax Return

  	
   

  	
  10.2

  
	
  Termination Date

  	
   

  	
  9.1(e)

  
	
  Theatre Level Cash Flow

  	
   

  	
  10.2

  
	
  Third-Party Claim

  	
   

  	
  8.3(a)

  
	
  Transactions

  	
   

  	
  1.4(a)

  
	
  Transfer Taxes

  	
   

  	
  6.3(e)

  
	
  Unresolved Items

  	
   

  	
  1.5(c)

  
	
  WARN Act

  	
   

  	
  6.6(a)

  

 

vii

 

PURCHASE AND SALE
AGREEMENT

 

This PURCHASE AND SALE AGREEMENT (this “Agreement”)
is dated January 14, 2008, and made by and among Consolidated Theatres,
LLC, a Delaware limited liability company (“Parent”), the corporations
(other than Purchaser) identified on the signature pages hereto
(collectively, the “Corporations”, and together with Parent, each a “Seller”
and, together, the “Sellers”), Consolidated Theatres Holdings, GP, a
North Carolina partnership (the “Partnership”), and Regal Cinemas, Inc.,
a Tennessee corporation (“Purchaser”). 
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in Section 10.2.

 

WHEREAS, the Partnership, and its Subsidiaries
identified on Exhibit A hereto (collectively, with the Partnership,
the “Companies”) operate a chain of cinemas located in the Southeastern
United States;

 

WHEREAS, the Corporations own 100% of the outstanding
Equity Securities (excluding the Options (as defined below)) of the Partnership
(collectively, the “Partnership Interests”), and Parent owns 100% of the
outstanding capital stock of each of the Corporations;

 

WHEREAS, Parent owns 100% of the outstanding options
to purchase all of the Partnership Interests (collectively, the “Options”)
from the Corporations for an aggregate exercise price (the “Option Exercise
Price”) of $41,910,614.83; and

 

WHEREAS, Purchaser desires to purchase from Sellers,
and Sellers desire to sell to Purchaser, all the assets of the Companies
through the purchase (1) from Parent of the Options, and (2) from the
Corporations of the Partnership Interests upon the exercise of the Options, in
each case subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants and agreements set forth
in this Agreement and for other consideration the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

PURCHASE AND SALE; CLOSING

 

SECTION 1.1.              Transfer of Options and
Partnership Interests.

 

Upon the terms and subject to the conditions contained
herein, Parent shall sell, convey, transfer, assign and deliver to Purchaser,
and Purchaser shall acquire at the Closing, the Options.  Immediately following such purchase and sale
of the Options, Purchaser shall exercise the Options by delivering to the
Corporations an exercise notice (the “Exercise Notice”) substantially in
the form attached hereto as Exhibit B and paying the Option
Exercise Price, and Purchaser and Sellers shall consummate the purchase and
sale of the Partnership Interests as set forth herein.  Each Corporation agrees that the exercise by
the Purchaser at the Closing of the Option granted by such Corporation, on the
terms of this Agreement instead of pursuant to the procedures set forth in the
contribution agreement pursuant to which such Option was granted, will
constitute a valid exercise of such Option.

 

 

SECTION 1.2.              Closing.

 

The closing of the purchase and sale of the Options
and the Partnership Interests pursuant to this Agreement (the “Closing”)
shall occur at the offices of Hogan & Hartson L.L.P., 1200 Seventeenth
Street, Suite 1500, Denver, Colorado, at 10:00 a.m. local time on the
second Thursday following full satisfaction or due waiver of all of the closing
conditions set forth in Article VII hereof (other than those to be
satisfied by actions to be taken at the Closing), or such other time and place
as may be mutually agreed.  The date upon
which the Closing actually occurs is referred to herein as the “Closing Date”.

 

SECTION 1.3.              Purchase Price; Closing Cash
Payment.

 

(a)   Upon the
terms and subject to the conditions contained herein, as consideration for the
purchase of the Options, Purchaser shall pay to Parent an aggregate purchase
price equal to the Enterprise Value less the Option Exercise Price (the “Option
Purchase Price”).  The aggregate
consideration for the Transactions (the “Purchase Price”) shall be an
amount equal to (i) the Option Exercise Price plus (ii) the
Option Purchase Price, as adjusted in accordance with Section 1.5.

 

(b)   Not fewer
than three (3) Business Days prior to the Closing, Parent shall deliver to
Purchaser a statement (the “Estimated Closing Statement”) setting forth
Parent’s good faith estimates of the amounts of Closing Working Capital and
Closing Cash as of 11:59 p.m. Eastern Time on the Closing Date (the “Adjustment
Time”), and a calculation of the Enterprise Value and Option Purchase Price
based on the foregoing estimates (the “Estimated Enterprise Value” and “Estimated
Option Purchase Price,” respectively).

 

(c)   At the
Closing, the Purchaser shall pay in cash (i) to the Corporations, the
Option Exercise Price, (ii) to the Parent, a portion of the Estimated
Option Purchase Price (the “Closing Cash Payment”) equal to the
Estimated Option Purchase Price less (A) the amounts paid pursuant to
clause (iii) below in respect of the Bank Facility and (B) the Escrow
Amount, and (iii) on behalf of the Companies (and each of the Sellers as
guarantors), all amounts then due under the Bank Facility (including all
prepayment premiums, penalties or other like charges) as set forth in the
payoff letter delivered to Purchaser as provided in Section 7.2(c)(vii),
with the effect that the Bank Facility and related documentation shall be
terminated effective as of the Closing (other than any provision thereof that,
by its terms, survives such repayment). 
For illustrative purposes only, Schedule 1.3(c) attached
hereto sets forth an example of the calculation of the cash payments to be made
at Closing in accordance with this Section 1.3(c).

 

SECTION 1.4.              Closing Deliveries.

 

(a)   Closing
Deliveries by Sellers.  To effect the
transactions referred to in Section 1.1 (the “Transactions”),
Sellers shall, on the Closing Date, deliver to Purchaser the following:

 

(i)            one
or more instruments transferring to Purchaser the Options and the Partnership
Interests, in form reasonably satisfactory to Purchaser;

 

2

 

(ii)           copies
of all consents, approvals, releases, and waivers from Governmental Entities
and other third parties, including Landlord Approvals, relating to the
Transactions that have been obtained; and

 

(iii)          all
other documents required to be delivered by Sellers pursuant to Article VII
not specifically mentioned above in this Section 1.4(a).

 

All instruments and documents executed and delivered
to Purchaser pursuant hereto shall be in form and substance, and shall be
executed in a manner, reasonably satisfactory to Purchaser and its counsel.

 

(b)   Closing
Deliveries by Purchaser.  To effect
the Transactions, Purchaser shall, on the Closing Date, deliver the following:

 

(i)            the
Exercise Notice;

 

(ii)           the
Closing Cash Payment by wire transfer of immediately available funds to an
account (the “Seller Account”) designated by Parent not fewer than three
(3) Business Days prior to the Closing Date;

 

(iii)          the
Option Exercise Price, by wire transfer of immediately available funds to the
Seller Account (for the account of the Corporations);

 

(iv)          the
Escrow Amount by wire transfer of immediately available funds to the Escrow
Agent; and

 

(v)           all
other documents required to be delivered by Purchaser pursuant to Article VII
not specifically mentioned above in this Section 1.4(b).

 

All instruments and documents executed and delivered
to Sellers pursuant hereto shall be in form and substance, and shall be
executed in a manner, reasonably satisfactory to Parent and its counsel.

 

(c)   Other
Actions to be Taken prior to and at the Closing.  To further facilitate the Transactions:  (i) not fewer than seven (7) nor
greater than fifteen (15) days prior to the Closing Date, Purchaser will
deliver to the Commonwealth 20 Landlord notice of the Closing Date, as required
by Section 3 of the Commonwealth 20 Landlord Agreement, (ii) on or
prior to the Closing Date, Purchaser will cause to be delivered to the
Commonwealth 20 Landlord the REG Guaranty (as that term is defined in the
Commonwealth 20 Landlord Agreement), duly executed by each of Purchaser, Regal
Entertainment Group, a Delaware corporation, Regal Entertainment Holdings and
Regal Cinemas Corporation, and Purchaser will cause the Security Deposit (as
that term is defined in the Commonwealth 20 Lease) to be delivered to the
Commonwealth 20 Landlord as contemplated by Section 2 of the Commonwealth
20 Landlord Agreement, each in accordance with the Commonwealth 20 Landlord
Agreement, and (iii) Sellers will complete the list of deferred
maintenance items as set forth on page 3 of the Wells Fargo Annual
Property Inspection Report relating to the inspection of the Commonwealth 20
building on August 19, 2007 prior to the Closing Date, but in no event
later than 90 days after January 7, 2008.

 

3

 

SECTION 1.5.              Adjustment to Purchase Price.

 

(a)   No later
than the 75th day after the Closing Date, Purchaser shall prepare and deliver
to Parent a consolidated balance sheet of the Companies as of the Adjustment
Time (the “Closing Balance Sheet”), together with a statement (the “Closing
Statement”) setting forth Purchaser’s determination of Closing Working
Capital, Closing Cash and Enterprise Value, and a calculation of the Purchase
Price based on the foregoing determinations. 
Purchaser shall prepare the Closing Balance Sheet and the Closing
Statement (including the determinations included therein) in accordance with Section 1.5(e).

 

(b)   During the
30-day period immediately following Parent’s receipt of the Closing Balance
Sheet and the Closing Statement (or during the 30-day period immediately
following the 75-day period described in Section 1.5(a), if
Purchaser fails to deliver the Closing Balance Sheet and the Closing Statement
to Parent within the 75-day period provided in Section 1.5(a) (in
which case, for purposes of this Section 1.5(b), the Estimated Closing
Certificate shall be treated as the Closing Balance Sheet and the Closing
Statement and will be deemed to have been delivered to Parent on the 75th day
after the Closing Date)), Parent and its advisors and representatives (i) shall
be permitted to review, upon reasonable notice, the Companies’ books and
records and the working papers related to the preparation of the Closing
Balance Sheet and the Closing Statement (including the determinations included
therein), and (ii) shall be given reasonable access, upon reasonable
notice, to knowledgeable employees and accounting professionals of Purchaser
and the Companies in order to facilitate Parent’s review of the Closing Balance
Sheet and the Closing Statement; provided that the review and access
described in clauses (i) and (ii) shall be conducted at times and in
a manner that does not unreasonably interfere with the operation of Purchaser’s
or the Companies’ respective businesses. 
The Closing Balance Sheet and the Closing Statement (including the
determinations included therein) shall become final, binding and conclusive
upon Purchaser and Sellers (A) on the 30th day following Parent’s receipt
thereof, unless Purchaser receives from Parent prior to such 30th day written
notice of Parent’s disagreement (a “Dispute Notice”) with any account or
determination set forth in the Closing Balance Sheet or the Closing Statement
or (B) on such earlier date as Parent notifies Purchaser that it does not
dispute the Closing Balance Sheet and Closing Statement.  If Parent timely delivers a Dispute Notice,
then the determination of the Purchase Price shall become final, binding and
conclusive upon Purchaser and Sellers on the first to occur of (x) the
date on which Purchaser and Parent resolve in writing all differences they have
with respect to the disputed items or (y) the date on which all of the
disputed items that are not resolved by Purchaser and Parent in writing are
finally resolved in writing by the Independent Accountants in accordance with Section 1.5(c).

 

(c)   During the
30 days following delivery of a Dispute Notice, Purchaser and Parent shall seek
in good faith to resolve in writing any differences that they have with respect
to the disputed items.  Any disputed item
resolved in writing by Purchaser and Parent shall be deemed final, binding and
conclusive on Purchaser and Sellers.  If
Purchaser and Parent do not reach agreement on all of the disputed items during
such 30-day period (or such longer period as they shall mutually agree), then
at the end of such 30-day (or longer) period Purchaser and Parent shall submit
all unresolved disputed items (collectively, the “Unresolved Items”) to
Ernst & Young LLP (the “Independent Accountants”) to review and
resolve such matters and each will specify to the other and to the Independent
Accountant its determination of the amount of the 

 

4

 

Purchase Price (a party’s “Proposed Price”).  The Independent Accountants will determine
each Unresolved Item in accordance with this Section 1.5(c) and
Section 1.5(e) as promptly as may be reasonably practicable,
and Purchaser and Parent shall instruct the Independent Accountants to endeavor
to complete such process within a period of no more than 60 days.  The Independent Accountants may conduct such
proceedings as the Independent Accountants believe, in their sole discretion,
will assist in the determination of the Unresolved Items; provided that,
except as Purchaser and Parent may otherwise agree in writing, all communications
between Purchaser and Parent or any of their respective representatives, on the
one hand, and the Independent Accountants, on the other hand, shall be in
writing with copies simultaneously delivered to the non-communicating party.  The Independent Accountants’ determination of
the Unresolved Items shall be final, binding and conclusive on Purchaser and
Sellers, effective as of the date the Independent Accountants’ written
determination is received by Purchaser and Parent.  The fees and expenses of the Independent
Accountants shall be borne as follows:  (x) by
Parent, in a portion equal to a fraction, the numerator of which is the
absolute difference between Parent’s Proposed Price and the Purchase Price
determined by the Independent Accountants and the denominator of which is the
absolute difference between Parent’s Proposed Price and the Purchaser’s
Proposed Price, and (y) by Purchaser, in a portion equal to one (1) minus
the fraction described in the preceding clause (x).

 

(d)   Within five
(5) Business Days after the final determination of the Purchase Price
pursuant to Section 1.5(b) or Section 1.5(c) (the
“Final Purchase Price”), either (i) if the Estimated Purchase Price
exceeds the Final Purchase Price, then Parent will pay to Purchaser the amount of
such excess, or (ii) if the Final Purchase Price exceeds the Estimated
Purchase Price, then Purchaser will pay to Parent the amount of such
excess.  Any payment to be made pursuant
to this Section 1.5(d) will be made by wire transfer of
immediately available funds to an account specified by the party to receive
such payment.

 

(e)   For the
purposes of this Agreement, each accounting term will have the meaning that is
applied thereto in accordance with United States generally accepted accounting
principles (“GAAP”) as in effect on December 31, 2006 and, to the
extent consistent with GAAP as in effect on December 31, 2006, the
accounting principles, policies, procedures and methodologies applied in
preparing the balance sheet that is part of the Audited Financial Statements
and the accompanying statement of income. 
Each account included in the Closing Statement and the Closing Balance
Sheet shall be (i) calculated in accordance with GAAP as in effect on December 31,
2006, and, to the extent consistent with GAAP as in effect on December 31,
2006, utilizing the accounting principles, policies, procedures and
methodologies applied in preparing the Company Financial Statements (without
regard to materiality), including with respect to the nature or classification of
accounts, and determining levels of reserves or levels of accruals; and (ii) consistent
with the books and records of the Companies and the definitions herein; provided
that in determining current assets and liabilities hereunder, (A) all
accounting entries shall be taken into account regardless of their amount and
all known errors and omissions shall be corrected, (B) all known proper
adjustments shall be made, and (C) appropriate reserves for all known and
quantifiable liabilities and obligations for which reserves are appropriate in
accordance with GAAP as in effect on December 31, 2006 shall be included.

 

5

 

SECTION 1.6.              Escrow.

 

At the Closing, the Escrow Amount shall be paid to the
Escrow Agent as described in Section 1.4 and deposited by the
Escrow Agent into an interest-bearing escrow account pursuant to the Escrow
Agreement.  On the Business Day after the
Survival Date, the portion of the Escrow Amount then held by the Escrow Agent,
plus any interest or other earnings on the Escrow Amount and then held by the
Escrow Agent, less the aggregate amount of any unresolved outstanding claims on
the Escrow Account made by the Seller-Indemnified Persons pursuant to Section 8.3,
shall be distributed to Parent pursuant to the terms of the Escrow
Agreement.  Purchaser shall be entitled
to be paid from the Escrow Amount and any interest or other earnings on the
Escrow Amount, in each case held by the Escrow Agent from time to time, any
amount that any Seller is required to pay to Purchaser pursuant to this
Agreement that has not been paid to Purchaser in accordance with the provisions
hereof and any indemnity payment required to be made by Sellers pursuant to Article VIII
of this Agreement, in each case pursuant to the terms of the Escrow Agreement.

 

SECTION 1.7.              Retained Leases.

 

Sellers acknowledge and agree that the Partnership and
the Companies have no right, title or interest in or to that certain (i) Lease
Agreement dated March 18, 2001 by and between Remington San Simeon, L.L.C.
and Consolidated Theatres, as amended, and (ii) Lease Agreement dated as
of November 8, 1993 by and between Fairview Plaza Associates Limited
Partnership and Consolidated Theatres, Inc., as amended, which leases and
all obligations and liabilities associated therewith shall be retained in their
entirety by Sellers.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES REGARDING THE TRANSACTIONS

 

Sellers and the Partnership hereby jointly and
severally represent and warrant to Purchaser as follows:

 

SECTION 2.1.              Organization.

 

Parent is a limited liability company duly organized,
validly existing, and in good standing under the Laws of the State of Delaware,
and is qualified to do business as a foreign entity in those jurisdictions in
which it is required to be so qualified in order for it to be able to perform
its obligations under this Agreement. 
Each Corporation is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware, and is qualified to
do business as a foreign entity in those jurisdictions in which it is required
to be so qualified in order for it to be able to perform its obligations under
this Agreement and the Option it has granted.

 

SECTION 2.2.              Authority.

 

Each Seller and the Partnership has the necessary
power and authority to enter into this Agreement and each Related Agreement to
which it is or will become a party, and to perform its obligations hereunder
and thereunder and to consummate the Transactions, and each Corporation 

 

6

 

has the necessary power and authority to perform its obligations with
respect to the Option that it has granted. 
The execution and delivery of this Agreement and each Related Agreement
to which it is or will become a party by each Seller and the Partnership and
the consummation by each Seller and the Partnership of the Transactions have
been duly and validly authorized by all necessary action and no other
proceedings on the part of such Seller or the Partnership is necessary to
authorize this Agreement and each Related Agreement to which it is or will
become a party or to consummate the Transactions.  This Agreement and each Related Agreement to
which it is or will become a party has been, or will be, duly executed and
delivered by each Seller and the Partnership and, assuming its due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of such Seller and the Partnership, enforceable against
such Seller and the Partnership in accordance with its terms, and each Option
constitutes a legal, valid and binding obligation of the Corporation that
granted it, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar Laws of general
applicability relating to or affecting creditors’ rights generally and by the
application of general principles of equity.

 

SECTION 2.3.              No Conflicts; Required Filings;
and Consents.

 

(a)   The
execution and delivery of this Agreement and each Related Agreement by Sellers
and the Partnership do not, and the consummation by Sellers and the Partnership
of the Transactions will not, subject to compliance with the requirements
described in Section 2.3(b): (i) conflict with or violate,
result in a breach of, or constitute a default under the certificate of
formation, partnership or limited liability company agreement or certificate of
incorporation or bylaws (as applicable) of any Seller or any Company, (ii) require
any authorization, consent, approval, exemption or other action or notice under
the provisions of any Seller’s or any Company’s certificate of formation,
partnership or limited liability company agreement or certificate of
incorporation or bylaws (as applicable), (iii) conflict with or violate
any Law applicable to any Seller or any Company or by which any of their
respective properties or assets is bound or affected, or (iv) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a breach or a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of an Encumbrance on any of the properties or assets of any Seller
or any Company pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which any Seller or any Company is a party or by which any Seller, any
Company or any of their respective properties or assets is bound, except, in
the case of clauses (iii) and (iv) above for any such conflicts,
violations, breaches, defaults or other accelerations or occurrences that in
the aggregate would not have and would not reasonably be expected to have a
Company Material Adverse Effect.

 

(b)   The
execution and delivery of this Agreement and each Related Agreement to which it
is or will become a party by any Seller or the Partnership does not, and the
consummation of the Transactions by any Seller or any Company shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity except (i) for (A) applicable
requirements of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended (the “HSR Act”) and state blue sky Laws, and (B) applicable
requirements identified on Schedule 2.3, and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, individually or in the 

 

7

 

aggregate would not have and would not reasonably be expected to have a
Company Material Adverse Effect.

 

SECTION 2.4.              Ownership of Options and
Partnership Interests.

 

Parent holds all right, title and interest in and to
the Options, free and clear of any restrictions on transfer, Taxes,
Encumbrances, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands (other than restrictions under the Securities Act
and state securities laws or that shall be terminated effective as of the
Closing in connection with the repayment of the indebtedness under the Bank
Facility).  The Corporations, taken
together, hold all right, title and interest in and to the Partnership
Interests, free and clear of any restrictions on transfer, Taxes, Encumbrances,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands (other than the Options and restrictions under the Securities Act
and state securities laws or that shall be terminated effective as of the Closing
in connection with the repayment of the indebtedness under the Bank
Facility).  None of Parent or any of the
Corporations is a party to any option, warrant, purchase right, or other
contract or commitment that could require it to sell, transfer, or otherwise
dispose any of the Partnership Interests (other than this Agreement and the
Options).  There are no Encumbrances or
restrictions that would prohibit Parent or any Corporation from transferring
(or impose any liability on any Person in connection with the transfer of) any
of the Options or the Partnership Interests to Purchaser at the Closing, and
the Partnership has no outstanding Equity Security other than the Partnership
Interests and the Options.  All of the
outstanding Equity Securities of the Partnership have been duly authorized and
are validly issued.  No Equity Securities
of the Partnership are reserved for issuances. 
There are no distributions that have accrued or been declared but are
unpaid on the Equity Securities of the Partnership.  There are no outstanding or authorized unit
appreciation, phantom units, unit plans or similar rights with respect to the
Partnership.  There are no agreements
among any members of Parent or shareholders of the Corporations, as applicable,
relating to the Partnership (including any agreement related to the management
of the Partnership or any equity interest in the Partnership), other than (i) the
partnership agreement of the Partnership, a true and correct copy of which has
been made available to Purchaser, and (ii) agreements to which the
Partnership is not a party, that are not binding on the Partnership, and that
could not otherwise give rise to any liability of the Partnership or
Purchaser.  The Options represent the
right to purchase one hundred percent (100%) of the Partnership Interests.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES

 

Sellers and the
Partnership hereby jointly and severally represent and warrant to Purchaser as
follows:

 

SECTION 3.1.              Organization and Qualification;
Subsidiaries.

 

The Partnership is a partnership duly organized and
validly existing in the State of North Carolina.  Each other Company is a limited liability
company validly existing and in good standing under the laws of the State of
Delaware (or the laws of the jurisdiction designated for such Company on the
attached Schedule 3.1).  Each
Company is duly qualified to conduct its 

 

8

 

business as a foreign entity, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified in the aggregate would not have and would not
reasonably be expected to have a Company Material Adverse Effect.  Each Company has the requisite power and
authority to own, operate, lease and otherwise to hold and operate its assets
and properties and to carry on the businesses as now being conducted.  No Company has any Subsidiary, or owns any
Equity Security of any entity, other than another Company.  Sellers have made available to Purchaser
complete and accurate copies of the certificate of formation and limited
liability company agreement of each Company other than the Partnership, and the
minutes of the meetings of the partners of the Partnership and members of each
other Company that are in its possession. 
All actions of the Companies since their inception have been authorized,
approved or otherwise ratified by all necessary limited liability company
action of Parent, partnership action of the Partnership or corporate action of
the Corporations, as applicable.

 

SECTION 3.2.              Capitalization.

 

The Partnership owns all of the outstanding Equity
Securities of each of the other Companies. 
There are no options, warrants or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued Equity
Securities of any Company other than the Partnership or obligating any such
Company to issue or sell any shares of capital stock of, or other Equity
Securities in such Company, including upon the exchange or conversion of any
Indebtedness or security.  There are no
outstanding contractual obligations of any Company to acquire any Equity
Securities in any other Person.

 

SECTION 3.3.              Financial Statements; Indebtedness.

 

(a)   Attached as
Schedule 3.3(a) are: (i) the audited consolidated balance
sheets of the Companies as of December 31, 2006, and December 31,
2005, and the related audited consolidated statements of income and of cash
flow for the year ended on such dates (the “Audited Financial Statements”),
and (ii) the unaudited consolidated balance sheet of the Companies as of September 30,
2007 (the “Interim Balance Sheet”) and the related unaudited
consolidated statement of income for the nine-month
period then ended (all of the foregoing financial statements and any notes
thereto are hereinafter collectively referred to as the “Company Financial
Statements”).  The Company Financial
Statements present fairly (and, when delivered, the financial statements to be
delivered prior to the Closing pursuant to Section 5.1(x) (the “Supplemental
Financial Statements”) will present), in all material respects, the
financial position of the Companies at their respective dates, and the results
of operations and cash flows of the Companies for the periods referred to
therein, all in accordance with GAAP applied on a basis consistent with prior
periods except, with respect to the unaudited Company Financial Statements or
Supplemental Financial Statements, for any absence of required footnotes and
subject to the Companies’ customary year-end adjustments.  During the periods covered by the Company
Financial Statements, none of the Corporations (x) conducted any business,
(y) owned any asset other than its ownership interest in the Partnership,
or (z) incurred any liability other than liabilities for (1) franchise
and similar Taxes, (2) Taxes arising out of the ownership of its interest
in the Partnership, (3) liabilities incurred by it by virtue of its 

 

9

 

status as a general partner of the Partnership, and (4) guaranties
of obligations of one or more of the Companies.

 

(b)   The
Companies have no liabilities of the type required to be reflected on a
consolidated balance sheet prepared in accordance with GAAP, applied on a basis
consistent with the method used in preparation of the Audited Financial
Statements except for (i) the indebtedness, liabilities and obligations
shown on the Interim Balance Sheet (including any notes thereto) or that will
constitute Closing Indebtedness, (ii) current liabilities that have been
incurred by the Companies after the date of the Interim Balance Sheet in the
ordinary course of their businesses or in connection with the Transactions, and
(iii) indebtedness, liabilities and obligations set forth on Schedule 3.3(b).

 

(c)   Schedule
3.3(c) sets forth the amount of the Theatre Level Cash Flow for each
theatre operated by the Companies, for the twelve-month period ended September 30,
2007.

 

SECTION 3.4.              Absence of Certain Changes or
Events.

 

Since the date of the Interim Balance Sheet and
through the date of this Agreement, except as set forth on Schedule 3.4,
the Companies have conducted their business in all material respects only in
the ordinary course of business and there has not been any:

 

(i)            destruction
or loss of, or damage to, any of the assets or properties of any Company,
whether or not covered by insurance, in excess of $250,000;

 

(ii)           sale
or other disposition (other than the sale, use or other disposition of
inventories, collection of accounts receivable, and dispositions of obsolete or
replaced property, in the ordinary course of business) of any asset or property
of any Company having a value in excess of $250,000;

 

(iii)          cancellation
or waiver of any claims or rights with a value to the Companies in excess of
$250,000;

 

(iv)          capital
investment in, or any loan to, any other Person (other than another Company) by
a Company in excess of $250,000;

 

(v)           loan
to, or any other transaction with, any of Company’s partners, members,
managers, shareholders, directors, officers, and employees or Affiliates, other
any loan to or other transaction with any other Company or any employee of any
Company in the ordinary course of business; or

 

(vi)          commitment
or contract to do any of the foregoing by a Company.

 

SECTION 3.5.              Absence of Litigation.

 

Except as set forth on Schedule 3.5, there is
no action, suit, investigation, or proceeding pending or, to the Sellers’
Knowledge, threatened by or against any of the Companies before any court,
administrative, governmental, arbitration, mediation or regulatory authority or
body, domestic or foreign, that could reasonably be expected to result in
liability or loss to the 

 

10

 

Companies in excess of $250,000 or that could
reasonably be expected to have a Company Material Adverse Effect, or that
challenges, or that seeks to prevent, delay, make illegal or otherwise
interfere with, any of the Transactions. 
To the Sellers’ Knowledge, no event has occurred or circumstance exists
that is reasonably likely to give rise to or serve as a basis for the
commencement of any such action, suit, investigation, or proceeding of a type
described in the preceding sentence. 
Except as set forth on Schedule 3.5, there is no action, suit,
investigation, or proceeding with respect to which the defense is not being
provided by the insurer under the insurance policies referenced in Section 3.14.  Except as set forth on Schedule 3.5,
there are no unsatisfied judgments, decrees, injunctions or orders of any
Governmental Entity or arbitrator outstanding against any Company, and each
Company is and has been in compliance in all material respects with the terms
and requirements of such judgments, decrees, injunctions or orders to which it
or any of its assets or properties is or has been subject.

 

SECTION 3.6.              Licenses and Permits; Compliance
with Laws.

 

(a)   The
Companies hold, and Schedule 3.6(a) sets forth a complete and
accurate list of, all permits, licenses, approvals, certificates,
accreditations and other authorizations (except with respect to Intellectual
Property, which is addressed in Section 3.8) from all Governmental
Entities (collectively, “Permits”) necessary for the Companies to own,
lease and operate their respective properties and to carry on their respective
businesses as now being conducted, except for Permits the absence of which in
the aggregate would not reasonably be expected to have a Company Material
Adverse Effect.  Each Permit required to
be listed in Schedule 3.6(a) is valid and in full force and
effect.  Except as set forth in Schedule
3.6(a): (i)  each Company is and has been in compliance in all
material respects with all of the terms and requirements of each Permit
required to be identified in Schedule 3.6(a); (ii) no event has
occurred or circumstance exists that would reasonably be expected to (with or
without notice or lapse of time) (A) constitute or result directly or
indirectly in a material violation of, or a failure to comply in any material
respect with, any term or requirement of any Permit required to be listed in Schedule
3.6(a) or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation or termination of, or any modification to,
any Permit required to be listed in Schedule 3.6(a); (iii) no
Company has received any written (or to Sellers’ Knowledge, other) notice or
other communication from any Governmental Entity or any other Person regarding (A) any
actual or alleged material violation of, or failure to comply in any material
respect with, any term or requirement of any such Permit or (B) any actual
or proposed revocation, withdrawal, suspension, cancellation, termination of or
modification to any such Permit, in each case other than notice of any such
matter that has been resolved; and (iv) all applications required to have
been filed for the renewal of the Permits required to be listed in Schedule
3.6(a) have been duly filed on a timely basis with the appropriate
Governmental Entities, and all other filings required to have been made with
respect to such Permits have been duly made on a timely basis with the
appropriate Governmental Entities.

 

(b)   The
businesses of the Companies are being, and at all times have been, conducted in
all material respects in compliance with all applicable Laws and Permits.  No written (or, to Sellers’ Knowledge, other)
notice or other communication has been received by, and to the Sellers’
Knowledge no claims have been filed against, any Company alleging any actual or
alleged material violation by any Company of, or failure on the part of any
Company to comply in any material respect with, any Law, other than notice of
any such matter that has been 

 

11

 

resolved.  No representation or
warranty is made in this Section 3.6 with respect to:  Tax laws; Intellectual Property Laws; Laws
applicable to the Leased Real Property; Environmental Laws; or Laws related to
employee-related matters.

 

SECTION 3.7.              Taxes.

 

(a)   Except as
set forth on Schedule 3.7(a), the Companies have prepared and
filed, and will timely file on or before the Closing Date with respect to any
taxable periods ending on or before the Closing Date (to the extent due prior
to the Closing Date), with all appropriate Governmental Entities all material
Tax Returns in respect of Taxes by the date such returns were due to be filed
(after giving effect to extensions timely filed) and all such returns are
correct and complete in all material respects. 
Copies of all Tax Returns filed in respect of the last three fiscal
years of each of the Companies have been made available to the Purchaser.  Except as set forth on Schedule 3.7(a),
the Companies have paid in full all Taxes (whether or not such Taxes are
required to be shown on a Tax Return) due prior to the date hereof, will pay
all Taxes (whether or not such Taxes are required to be shown on a Tax Return)
due after the date hereof and prior to the Closing and, in the case of Taxes
accruing on or before the Closing that are not due on or before the Closing,
each Company has or will make adequate provision in its books and records for
such payment.  Except as set forth on Schedule 3.7(a),
the Companies have withheld from each payment made to any of its present or
former employees, officers, directors, stockholders and creditors all amounts
required by Law to be withheld and have, where required, remitted such amounts
within the applicable periods allowed by Law to the appropriate Governmental
Entities.  All individuals paid for
services by the Companies have been properly classified as either employees or
independent contractors in accordance with the Code and applicable Tax laws.  In addition, except as set forth on Schedule 3.7(a),
(i) no assessments for Taxes have been issued against any Company by a
Governmental Entity that remain outstanding and unpaid; (ii) within the
last three (3) years, no Governmental Entity has conducted an audit of any
Company in respect of Taxes; and (iii) no Company has executed or filed
any agreement extending the period for the assessment or collection of any
Taxes.

 

(b)   Except as
set forth on Schedule 3.7(b), no Company has received from any
foreign, federal, state, or local taxing authority (including jurisdictions
where any Company has not filed Tax Returns) any (i) notice indicating an
intent to open an audit or other review, or (ii) notice of deficiency or
proposed adjustment for any amount of Tax proposed, asserted, or assessed by
any taxing authority against any Company (excluding any such notices related to
Tax paid or matters otherwise resolved prior to the date of the Interim Balance
Sheet).  Except as set forth on Schedule 3.7(b),
no claim has ever been made by a Governmental Entity in a jurisdiction where
any Company does not file Tax Returns that any Company is or may be subject to
taxation by that jurisdiction.  There are
no Encumbrances for Taxes (other than Taxes not yet due and payable) upon any
of the assets of any Company.  Each Company
has disclosed in its federal income Tax Returns all positions taken therein
that could give rise to a substantial understatement of federal income tax
within the meaning of Code Section 6662.

 

(c)   No Company
has filed a consent under Code § 341(f) concerning collapsible
corporations.  Neither Parent, any
Company nor any partner thereof, and no Corporation, is a foreign person within
the meaning of Section 1445 of the Code. 
No Company has been (i) a personal holding company within the
meaning of Code §542, (ii) a passive foreign investment 

 

12

 

company within the meaning of Code §1297 or (iii) a foreign
personal holding company within the meaning of Code § 552.  No Company is a party to or bound by any Tax
allocation, indemnification or sharing agreement.  No Company (a) has been a member of an
affiliated group filing a consolidated federal income Tax Return or (b) has
any liability for the Taxes of any Person under Reg. §1.1502-6 (or any similar
provision of state, local, or foreign Law), as a transferee or successor, by
contract, or otherwise.

 

(d)   No Company
shall be required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date as a result of any: (i) change in method of
accounting for a taxable period ending on or prior to the Closing Date (and the
IRS has not proposed to any Company any such adjustment or change in accounting
method); (ii) “closing agreement” as described in Code §7121 (or any
corresponding or similar provision of state, local or foreign income Tax Law)
executed on or prior to the Closing Date; (iii) intercompany transaction
or excess loss account described in Treasury Regulations under Code §1502 (or
any corresponding or similar provision of state, local or foreign income Tax
Law); (iv) installment sale or open transaction disposition made on or
prior to the Closing Date; or (v) prepaid amount received on or prior to
the Closing Date.  There is no
application pending with any taxing authority requesting permission for any
changes in accounting methods that relate to the business or operations of any
Company).

 

(e)   No Company
has executed or entered into (or prior to the close of business on the Closing
Date will execute or enter into) with any taxing authority (i) a closing
agreement pursuant to Code Section 7121 or any predecessor provision
thereof or any similar provision of state, local or foreign law that relates to
the assets or operations of any Company or (ii) any agreement, waiver or
other document extending or having the effect of extending or waiving the
period for assessment or collection of any Taxes for which a Company would or
could be liable.

 

(f)    No Company
has made any payments, is obligated to make any payments, or is a party to any
agreement or other arrangement that could obligate it to make any payments that
would not be deductible under Section 280G of the Code.

 

(g)   No Company
has participated or engaged in any transaction that constitutes a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(1) or
any transaction that constitutes a “listed transaction” within the meaning of
Treasury Regulation Section 1.6011-4(b)(2).

 

(h)   The due but
unpaid Taxes of the Companies (A) did not, as of the date of the Interim
Balance Sheet, exceed the reserves for Tax liability (rather than any reserve
for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the Interim Balance Sheet and (B) the
due but unpaid Taxes as of the date hereof do not exceed (and as of the
Closing, will not exceed) those reserves as adjusted for the passage of time
through the date hereof (or the Closing Date, as applicable) in accordance with
the past custom and practice of the Companies in filing their Tax Returns.

 

13

 

SECTION 3.8.              Intellectual Property.

 

(a)   Schedule 3.8(a) contains a
complete and accurate list of all (i) patented or registered Intellectual
Property owned by any Company, (ii) patents and pending patent
applications and other registrations and applications for other registrations
of Intellectual Property filed by or on behalf of any Company or in or to which
any of the Companies has any right, title, or interest, and (iii) all
other material Intellectual Property in or to which any of the Companies has any
right, title, or interest (other than as a licensee).  Schedule 3.8(a) also contains a
complete and accurate list of all material licenses granted by any Company to
any third party with respect to any Intellectual Property owned by any Company
and all material licenses granted by any third party to any Company with
respect to any Intellectual Property (other than licenses of “shrink wrapped”
or “off the shelf” software licensed to any Company).  Each registration for or application to
register Intellectual Property listed on Schedule 3.8(a) is valid
and subsisting, in full force and effect, and has not been canceled, expired or
abandoned, except where cancellation, expiration or abandonment would not
reasonably be expected to have a Company Material Adverse Effect.  One or more of the Companies owns (or has
valid rights to use) all Intellectual Property material to or used in the
business of the Companies as such business is currently conducted, and such
Intellectual Property constitutes all Intellectual Property necessary for the
operation of the business.  All
Intellectual Property owned by the Companies is owned exclusively by the
Companies free and clear of all Encumbrances (other than Permitted
Encumbrances).

 

(b)   There have been no written (or, to Sellers’
Knowledge, other) claims received or, to the Sellers’ Knowledge, threatened
against any Company asserting (i) the invalidity, misuse or
unenforceability of any Intellectual Property owned by any Company, or (ii) that
the operation of the business of any Company infringes any Intellectual
Property of any third party, in each case other than notice of any such matter
that has been resolved, and in respect of which there is no additional
potential exposure, further obligation or amounts due or payable.  To the Sellers’ Knowledge, no Person is
currently infringing upon any Intellectual Property owned by any Company.  None of the Companies is infringing in any
material respect any Intellectual Property of any third party, nor to the
Sellers’ Knowledge will any such infringement occur as a result of the
continued operation of the business of the Companies as currently
conducted.  The Transactions will not
materially and adversely affect any Company’s right, title or interest in and
to any item of Intellectual Property owned or used by the Companies.  The Companies have taken reasonable
precautions to protect the secrecy, confidentiality and value of their
respective trade secrets and confidential know-how.  The Companies have at all times complied in
all material respects with and are in compliance in all material respects with
all applicable Laws relating to privacy, data protection, or the collection,
retention, use and disclosure of personal information.

 

SECTION 3.9.              Material Contracts.

 

(a)   Schedules 3.9, 3.10 and 3.11(b),
taken together, set forth a complete and correct list, as of the date of this
Agreement, of all agreements of the following types to which any Company is a
party or is bound (collectively, the “Material Contracts”):  (i) the Leases and any other contract
affecting the ownership of, leasing of, title to, use of or any leasehold or
other interest in any real property or the construction of any improvements
thereon (other than the 

 

14

 

construction of any facility that is now in
operation); (ii) contracts relating to the renovation or construction of
any theatre (other than the construction of any facility that is now in
operation); (iii) any other contract, agreement or legally binding commitment
providing for payments by or to the Companies in excess of $250,000 at any time
or in the aggregate during any year (other than purchase orders entered into in
the ordinary course of business) or that is material to the business or
operations of the Companies, taken as a whole, or whose default or termination
could have a Company Material Adverse Effect; (iv) employment, severance,
termination and consulting agreements (excluding agreements with at-will
employees and agreements that may be terminated by a Company without penalty
other than customary severance), pension, profit sharing, incentive
compensation, deferred compensation stock/unit purchase, stock/unit option,
stock/unit appreciation right, group insurance, severance pay, or retirement
plan or agreement or any similar contract; (v) loan agreements,
indentures, reimbursement agreements for letters of credit, mortgages, notes
and other debt instruments or the guaranty of any obligation for the borrowing
of money by a Company; (vi) confidentiality, non-solicitation and
non-compete agreements by which the activities of any Company are restricted; (vii) any
agreement pursuant to which any Company is a party to a partnership or joint
venture; (viii) any capitalized lease obligation; (ix) any settlement,
conciliation or similar contract that has not been performed; and (x) any
license, as licensee, of any material Intellectual Property (other than
licenses of “shrink wrapped” or “off the shelf” software).  Schedule 3.9 contains an accurate and
complete list of all amendments, modifications, supplements, waivers, renewals
and extensions to the Material Contracts.

 

(b)   Each of the Material Contracts is valid and
as of the date hereof is in full force and effect; provided no representation
or warranty is made in this sentence with respect to any Material Contract
that, as indicated on Schedule 3.9, has not been executed by one or more
of the intended parties thereto.  No
Company has violated in any material respect any provision of, or committed or
failed to perform any material act that is required to be performed by it
under, any Material Contract or any contract for the construction of any
facility that is now in operation, and no event has occurred that with or
without notice, lapse of time or both would constitute a material default,
material breach or material event of noncompliance under the provisions of any
Material Contract or any contract for the construction of any facility that is
now in operation; and no Company has received any written (or, to Sellers’
Knowledge, other) notice of, and to the Sellers’ Knowledge there does not
exist, any material breach, cancellation, or intention not to renew, or any
anticipated material breach, cancellation, or intention not to renew, by the
other parties to any Material Contract or any contract for the construction of
any facility that is now in operation. 
True and complete copies of all Material Contracts have been made
available to Purchaser.

 

(c)   As of the date of this Agreement, except as
indicated on Schedule 3.9, no Company is involved in any renegotiations
of or attempts to renegotiate any material amounts paid or payable to such
Company under a Material Contract or any contract for the construction of any
facility that is now in operation with any Person having the contractual or
statutory right to demand or require such renegotiation, and no such Person has
made written demand for such renegotiation.

 

(d)   Except for the Landlord Approvals or as set
forth on Schedule 2.3, the execution and delivery of this Agreement and
each Related Agreement by Sellers do not, and the 

 

15

 

consummation by Sellers of the Transactions
will not require any authorization, consent, approval, exemption or other
action or notice under the provisions of any Material Contract or any contract
for the construction of any facility that is now in operation.

 

SECTION 3.10.            Employee Benefit Plans.

 

(a)   Schedule 3.10 sets forth a true
and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)),
and each other employee benefit, fringe, equity based compensation, retention,
employment, severance, change in control, or bonus plan, program, policy,
agreement or arrangement that is sponsored, maintained, participated in or
contributed to as of the date of this Agreement by any Company or any entity
required to be aggregated with any Company with respect to which any Company
has any material liability (collectively, the “Benefit Plans”).

 

(b)   With respect to each Benefit Plan, Sellers
have made available to Purchaser, to the extent applicable (i) the plan
document, all amendments to the plan document, the summary plan description and
any summaries of material modifications; (ii) the most recent
determination letter from the Internal Revenue Service; (ii) the three
most recent annual reports (Form 5500 series); (iv) the related trust
agreements, insurance contract or other funding arrangement, (v) the most
recent discrimination testing results and (vi) all material correspondence
with the IRS or the Department of Labor.

 

(c)   No Company or, to the Sellers’ Knowledge, any
other person has engaged in any non-exempt “prohibited transaction”, as defined
in Code Section 4975 or ERISA Section 406, with respect to any
Benefit Plan.  To the Sellers’ Knowledge,
no Company has engaged in any transaction that as a result of which any Company
would be subject to any material liability pursuant to Sections 406 and 409 of
ERISA or to either a civil penalty assessed pursuant to Section 502(i) or
(l) of ERISA or a Tax imposed pursuant to Section 4975 of the
Code.  No fiduciary of any Benefit Plan
has any liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the assets of any
Benefit Plan.

 

(d)   None of the Benefit Plans is a plan subject
to Title IV of ERISA, the minimum funding requirements of Section 302 of
ERISA or Section 412 of the Code, and no Company has ever maintained,
participated in or contributed to any plan that is subject to Title IV of
ERISA, the minimum funding requirements of Section 302 of ERISA or Section 412
of the Code.  No Company has incurred any
liability under Title IV of ERISA and no events have occurred and no
circumstances exist that would reasonably be expected to result in such
liability to any Company.  No Company has
any liability or obligation as a consequence of being considered a single
employer under Section 414 of the Code with any other Person.

 

(e)   No Benefit Plan is or ever has been a “multiemployer
plan” within the meaning of ERISA Section 3(37).  No Company has any liability for a complete
or partial withdrawal from any multiemployer plan or has any liability under or
with respect to any multiemployer plan. 
No Benefit Plan is a “voluntary employees’ beneficiary association”
within the meaning of 

 

16

 

Code Section 501(c)(9) or a “nonqualified
deferred compensation plan” within the meaning of Code Section 409A.

 

(f)    Each Benefit Plan (and each related trust,
insurance contract, or fund) has been maintained, funded and administered in
all material respects in compliance with its governing documents and with all
provisions of all applicable Laws, including ERISA and the Code.

 

(g)   Each Benefit Plan that is intended to be “qualified”
within the meaning of Section 401(a) of the Code has been determined
by the IRS to be so qualified by issuance and receipt of a favorable
determination letter or reliance upon a prototype opinion letter.  No event has occurred since the date of the
most recent determination letter (other than the effective date of certain
amendments to the Code the remedial amendment period for which has not expired)
that could reasonably be expected to adversely affect the qualified status of
such Benefit Plan.

 

(h)   There are no claims (other than routine
claims for benefits), proceedings, hearings, actions or lawsuits pending, or to
the Sellers’ Knowledge, threatened, with respect to any Benefit Plan.  There are no audits, investigations or
examinations with respect to any Benefit Plan by the IRS, the Department of
Labor, the PBGC or any other governmental agency (other than a review
associated with the application for a determination letter that has been filed
with the IRS) and, to the Sellers’ Knowledge, no such audit, investigation or
examination is threatened or pending.

 

(i)    All contributions (including all employer
contributions and employee salary reduction contributions) and premium payments
that are due with respect to any Benefit Plan have been made within the time
periods prescribed by ERISA and the Code to each such Benefit Plan.

 

(j)    Neither the execution and delivery of this
Agreement nor the consummation of the Transactions will (i) result in the
payment of any money or property to any employee of any Company, (ii) materially
increase any benefit otherwise payable under any Benefit Plan; or (iii) accelerate
the time of payment or vesting, or increase the amount of, any compensation due
from any Company to any employee.

 

(k)   There are no agreements to which any Company
is a party that will provide payments to any officer, employee or highly
compensated individual that shall be “parachute payments” under Section 280G
or Section 4999 of the Code for which Purchaser or any Company will have
withholding liability or that will result in loss of Tax deductions under Section 280G
of the Code.

 

(l)    No Company has any obligation to provide
life insurance, medical or health benefit coverage on or after retirement or
other termination of employment to any individual other than continuation
coverage as required by Section 4980B of the Code.

 

SECTION 3.11.            Properties; Assets.

 

(a)   Except as set forth on Schedule 3.11(a),
taken together, the Companies have good and marketable title to all the
tangible properties and assets reflected in the Interim Balance Sheet as being
owned by one of the Companies or acquired after the date thereof that are 

 

17

 

material to the Companies’ business on a
consolidated basis (except assets and properties sold or otherwise disposed of
since the date thereof in the ordinary course of business) , free and clear of
all Encumbrances except for Permitted Encumbrances.  The Companies’ tangible properties and assets
are in a state of repair that is reasonably sufficient for the purposes for
which they are used.  As of the date of
this Agreement, the Companies do not lease (as lessee) any tangible personal
property.  Except as set forth on Schedule
3.11(a), the Companies own all of the material tangible personal property
located on the Leased Real Property and used by them in the operation of their
business.

 

(b)   Schedule 3.11(b) sets forth the
address of each leasehold or subleasehold estate and other rights to use or
occupy any land, buildings, structures, improvements, fixtures or other
interest in real property held by any Company (other than any leasehold for
storage space that is not material to the business of the Companies and that is
terminable upon 30 days’ (or less) notice) (the portion(s) thereof
occupied by any Company being the “Leased Real Property”), and a list of
all leases (including all amendments, extensions, renewals, guaranties and
other agreements with respect thereto) for each such Leased Real Property (each
a “Lease”).  With respect to each
Lease:  (i) no Company owes, or will
owe in the future, any brokerage commissions or finder’s fees with respect to
such Lease; (ii) no Company has subleased, licensed or otherwise granted
any Person the right to use or occupy such Leased Real Property or any portion
thereof; and (iii) there are no Encumbrances on the estate or interest
created by such Lease other than Permitted Encumbrances.  Schedule 3.11(b) contains an
accurate and complete list of all development agreements, redevelopment
agreements, development and disposition agreements and similar agreements, and
all amendments, modifications, supplements, waivers, renewals and extensions
thereof to which a Company is a party or by which it is bound as of the date of
this Agreement.  Complete and correct
copies of the documents set forth on Schedule 3.11(b) have been
made available to Purchaser by the Companies prior to the date of this
Agreement.

 

(c)   No Company owns or has owned any real
property.

 

(d)   The Companies have made available to
Purchaser, (i) true and complete copies of all policies of title insurance
previously issued with respect to the Leased Real Property, or any portion
thereof, which are in the Companies’ possession, and (ii) true and
complete copies of all boundary, land or ALTA surveys of the Leased Real
Property, or any portion thereof, in the Companies’ possession.

 

(e)   Except to the extent disclosed on Schedule
2.3, execution of this Agreement and the consummation of the Transactions,
do not and shall not (i) constitute a default or breach by any Company
under any Lease, (ii) give rise to a right on the part of any lessor or
sublessor or, to the Sellers’ Knowledge, any other person to purchase or to
terminate any Lease, or to recapture all or any portion of the Leased Real
Property, (iii) result in the termination or cancellation of any option to
renew or extend the term of any Lease, or of any other right or option
otherwise exercisable by the lessee or sublessee, as applicable, under any of
the Leases or (iv) require any authorization, consent, approval, exemption
or other action or notice, under any Lease.

 

(f)    Schedule 3.11(b) accurately and
completely identifies, as of the date of this Agreement, with respect to each
Lease, (i) to the Sellers’ Knowledge, the correct name of the 

 

18

 

current lessor and each superior lessor with
respect to each Lease which is a sublease; (ii) to the Sellers’ Knowledge,
the address or addresses at which such lessor is entitled to receipt of notices
that must or may be delivered by a Company to such lessor under the
corresponding Lease; (iii) the dates upon which the current terms of the
Leases commenced and upon which it will expire not including any extension or
termination rights set forth in the corresponding Lease; (iv) the period
or periods of any remaining renewal or extended terms of the lease which any
Company has the option to exercise; (v) the current base rent payable
under each Lease, and any scheduled increases in such base rent during the
remainder of the current term of each Lease; (vi) the manner in which any
percentage rents payable during the current term of each Lease is determined; (vii) the
amounts accrued by the Companies under each Lease for October, 2007 for
passthroughs of common area maintenance costs payable to the lessor and, if
applicable, property insurance premiums and/or real estate taxes to be paid directly
by each Company under such Lease (in each case, based on estimates provided by
the lessor in question); (viii) the unused or unapplied amount of any
security deposit or letter of credit which such lessor holds in connection with
the performance of each Company’s obligations under each Lease; and (ix) the
name and the address of any guarantor of or other surety for any Company’s
obligations under a Lease.

 

(g)   To the Sellers’ Knowledge, Schedule 3.11(b) accurately
and completely identifies, as of the date of this Agreement, all other material
instruments and agreements (i.e., other than the instruments and agreements
identified on Schedule 3. 3.9) which are not recorded in the real
property records and which relate to the Companies’ occupancy of the Leased
Real Property, including any unrecorded parking agreements, advertising
agreements, merchant association agreements, development agreements,
redevelopment agreements, development and disposition agreements.  Complete and correct copies of each document
set forth on Schedule 3.11(b) have been made available to Purchaser.

 

(h)   Except as disclosed on Schedule 3.11(h),
no Company has received written notice of any proceeding either instituted, or
planned to be instituted, respecting any taking, condemnation, action in
eminent domain, or any voluntary conveyance in lieu thereof, of any part of the
Leased Real Property, or any interest therein or right accruing thereto or use
thereof and (ii) to the Sellers’ Knowledge, no taking or voluntary
conveyance of all or part of any Leased Real Property, or any interest therein
or right accruing thereto or use thereof, as the result of, or in settlement
of, any condemnation or other eminent domain proceeding by any Governmental
Entity affecting the Leased Real Property or any portion thereof has been
commenced, threatened or planned to be instituted with respect to all or any
portion of any Leased Real Property.

 

(i)    Except as disclosed on Schedule 3.11(i),
(i) no Company has received written notice from any (A) Governmental
Entity that any of the Leased Real Property is in violation of any Occupational
Safety and Health Law or any other Law, or (B) third party that the Leased
Real Property is in violation of any reciprocal easement, development or
similar agreement affecting such Real Property; and (ii) to Sellers’
Knowledge, no such violations described in clause (i) above exist.  The use being made of all Leased Real
Property is in conformity in all material respects with the Laws pertaining to
zoning and building and the related certificate of occupancy and/or such other
permits, licenses, variances and certificates for such Leased Real Property and
any other reciprocal easement, development or similar agreement, or
restrictions, 

 

19

 

covenants or conditions affecting such Real
Property.  All improvements on the Leased
Real Property are (i) in a state of repair that is reasonably sufficient
for the purposes for which they are used and (ii) in compliance in all
material respects with all applicable Laws (including those pertaining to
zoning and building).

 

(j)    No Person other than a Company has any
possessory interest in any Leased Real Property.

 

(k)   All Leased Real Property has adequate rights
of access to public ways to permit the Leased Real Property to be used for
purposes of a motion picture theatre and is served by operating and reasonably
adequate water, electric, telephone, sewer, and storm drain facilities and
other utilities.  To the Sellers’
Knowledge, all reciprocal easement, development and similar agreements
affecting any Leased Real Property are in full force and effect and no Company
has asserted any default against the other parties thereto and has not received
any written notice of any default thereunder.

 

(l)    No building or structure on any Leased Real
Property or any appurtenance thereto or equipment thereon, or the use,
operation or maintenance thereof, violates any restrictive covenant or
encroaches on any easement or on any property owned by others, which violation
or encroachment materially interferes with the use or could materially
adversely affect the value of such building, structure or appurtenance and
which violation or encroachment is necessary for the operation of the business
at any Leased Real Property.

 

(m)  To Sellers’ Knowledge, each theatre located on
the Leased Real Property has adequate available parking to meet legal
requirements (after taking into account reciprocal easements and other
easements on nearby or adjoining land).

 

(n)   Except as set forth on Schedule 3.9, 3.11(b) or
3.11(g), neither any Company, nor to the Sellers’ Knowledge, any other
Person which is a party to or is bound by any reciprocal easement, development
or similar agreement that is material to any Leased Real Property, or is
presently in default of breach in any material respect of any obligation under
any such reciprocal easement, development or similar agreement.

 

SECTION 3.12.            Employees; Labor Relations.

 

(a)   Schedule 3.12(a) lists (i) each
current employee of any Company who received from the Companies during the year
ended on the date of the Interim Balance Sheet wages and/or cash bonuses in
excess of $50,000 in the aggregate and (ii) the amount of such
compensation.

 

(b)   No Company is a party to any collective bargaining
agreement or other contract or agreement with any labor organization or other
collective bargaining representative of any of the employees of any
Company.  Except as set forth on Schedule 3.12(b),
(i) each Company is in compliance with all Laws relating to the employment
or the workplace, including provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment
opportunity, immigration, unemployment compensation, worker’s compensation,
employee privacy and right to know and social security contributions, except
for such noncompliance that in the aggregate is not reasonably likely to have a
Company Material Adverse Effect; (ii) there has not been, there is not
presently pending or existing, and to the 

 

20

 

Sellers’ Knowledge there is not threatened,
any strike, slowdown, picketing, work stoppage or employee grievance
process involving any Company; (iii) to the Sellers’ Knowledge, no event
has occurred or circumstance exists that could reasonably be expected to
provide the basis for any work stoppage or other labor dispute by
employees of any Company; (iv)  other than as set forth on Schedule
3.5, there is not pending or, to the Sellers’ Knowledge, threatened against
or affecting any Company any proceeding relating to the alleged violation of
any Law pertaining to labor relations or employment matters, including any
charge or complaint filed with the National Labor Relations Board or any
comparable Governmental Entity, and to Sellers’ Knowledge, there is no
organizational activity or other labor dispute involving employees of any
Company; (v) there is no lockout of any employees by any Company, and no
such action is contemplated by any Company; and (viii) to the Sellers’
Knowledge, there has been no pending charge of discrimination filed against or
threatened against any Company with the Equal Employment Opportunity Commission
or similar Governmental Entity.

 

SECTION 3.13.            Environmental Matters.

 

(a)   Except as set forth on Schedule 3.13(a),
the Companies have complied in all material respects with applicable
Environmental Laws.

 

(b)   (i) Except as set forth on Schedule
3.13(b)(i), the Companies have not received any written notices from any
Governmental Entity or any other Person alleging the violation of any
Environmental Law or any liability or potential responsibility under any
Environmental Law, other than notice of any such matter that has been resolved,
and to the Sellers’ Knowledge, no action, investigation, complaint, suit or
proceeding is threatened against the Companies under any Environmental Law; and
(ii) except as set forth on Schedule 3.13(b)(ii), there are no
facts, circumstances, or conditions existing, initiated or occurring prior to
Closing, which have or will result in liability to any Company or any Seller
under Environmental Law.

 

(c)   Except as set forth on Schedule 3.13(c),
the Companies are not the subject of any Order arising under any Environmental
Law.

 

(d)   Except as set forth on Schedule 3.13(d),
the Companies have not generated, managed, stored, transported, treated,
Released, emitted, discharged or disposed of any Hazardous Substance except as
would not reasonably be expected to give rise to any material liability under
Environmental Laws.

 

(e)   A list of all Permits issued to the Companies
pursuant to Environmental Laws is set forth on Schedule 3.13(e)(i), and
such Permits will not be adversely affected by the consummation of the
Transactions, except as set forth on Schedule 3.19(e)(ii).

 

(f)    Except as set forth on Schedule
3.13(f)(i), (i) no Company has (A) manufactured, treated, stored,
disposed of, arranged for or permitted the treatment or disposal of,
transported, handled or Released, or permitted persons to be exposed to, any
Hazardous Substance, noise, odor or radiation, or (B) owned or operated
any property or facility, in a manner that has given or will give rise to
material liabilities under Environmental Law; and (ii) except as set forth
on Schedule 3.13(f)(ii) and cleaning supplies maintained in the
ordinary course of business and in compliance with applicable Laws, there are
no Hazardous Substances present at, and no 

 

21

 

Hazardous Substances have been Released at,
on, under or from, any facility or property leased or operated by any Company,
or any of their respective predecessors or Affiliates.

 

(g)   Except as set forth on Schedule 3.13(g),
no Company has installed, used, removed or remediated, and none of the
following are present, at any Leased Real Property: (i) underground
improvements, including treatment or storage tanks, or underground piping
associated with such tanks, used currently or in the past for the management of
Hazardous Substances; (ii) any dump or landfill or other unit for the
treatment or disposal of Hazardous Substances; (iii) filled in land or
wetlands; (iv) PCBs; (v) toxic mold; (vi) lead-based paint; or (vii) asbestos-containing
materials.

 

(h)   Sellers have made available to Purchaser
accurate and complete copies of all environmental assessments, reports, audits
and other documents in their or the Companies’ possession or under their or the
Companies’ control that relate to the Companies’ compliance with Environmental
Laws or the environmental condition of any real property that the Companies
currently or formerly have owned, operated, or leased.

 

(i)    Notwithstanding any other provision of this
Agreement other than Sections 3.3 (Financial Statements; Indebtedness), 3.4
(Absence of Certain Changes or Events), 3.9 (Material Contracts), 3.11(b)(iii) and
3.11(c) (Properties; Assets), and 3.14 (Insurance), this Section 3.13
constitutes the sole representations and warranties of Sellers with respect to
any matters covered by representations and warranties in this Section.

 

SECTION 3.14.            Insurance.

 

(a)   Schedule 3.14(a) contains a
list of all material policies of title, property, fire, casualty, liability,
life, workmen’s compensation, and other forms of insurance in force at the date
thereof with respect to the Companies.

 

(b)   Except
as set forth in Schedule 3.14(b): (i) all policies of insurance
listed on Schedule 3.14(a) are valid and outstanding; (ii) the
policies of insurance to which any Company is a party or that provide coverage
to any Company, taken together, are sufficient for compliance in all material
respects with all Laws applicable to the Companies, and the provisions of
Material Contracts, relating to insurance coverage; (iii) as to any matter
that is pending, no Company has received (A) any refusal of coverage or
any notice that a defense will be afforded with reservation of rights (other
than any matter described on Schedule 3.5) or (B) any notice of
cancellation or any other indication that any policy of insurance is no longer
in full force or effect or that the issuer under any policy of insurance is not
willing or able to perform its obligations thereunder; (iv) the Companies
have paid all premiums due, and have otherwise performed all in all material
respects their obligations, under each policy of insurance to which they are
party, and (v) the Companies have given notice to the insurer of all
claims of which a Company has knowledge that may be insured thereby.  Schedule 3.14(b) describes any
self-insurance arrangements maintained by the Companies, other than retention
amounts under insurance policies.

 

22

 

SECTION 3.15.            Affiliate Transactions.

 

Except as set forth on Schedule 3.15, there are no
liabilities or obligations between any Company, on the one hand, and any
current or former officer, director, 5% or greater stockholder or Affiliate of
any Seller or any Affiliate of any such officer, director, 5% or greater
stockholder (other than another Company), on the other hand, other than as set
forth in an employment contract with any such person.  The Companies do not provide or cause to be
provided any assets, services or facilities to any such current or former
officer, director, stockholder or Affiliate.

 

SECTION 3.16.            Brokers.

 

Other than UBS Securities, LLC, no broker, finder or investment banker
is entitled to any brokerage, finder’s or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of any
Seller, any Company or any of their Affiliates.

 

SECTION 3.17.            Notes and Accounts Receivable.

 

All notes and accounts receivable of the Companies as of the Closing
Date will be valid receivables subject to no setoffs or counterclaims except as
reflected in any related reserve that will be part of the Closing Working
Capital used to compute the Final Purchase Price, and will be collectible in
accordance with their terms at their recorded amounts, subject only to such
reserve.

 

SECTION 3.18.            Powers of Attorney.

 

There are no outstanding powers of attorney granted by any Company in
favor of any third-party attorney-in-fact, except as shall have been terminated
or revoked by such Company prior to the Closing.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Sellers
as follows:

 

SECTION 4.1.              Organization and Qualification.

 

Purchaser is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Tennessee, and is qualified to do
business as a foreign entity in those jurisdictions in which it is required to
be so qualified in order for it to be able to perform its obligations under
this Agreement.

 

SECTION 4.2.              Authority.

 

Purchaser has the necessary corporate power and authority to enter into
this Agreement and each Related Agreement to which it is or will become a
party, to perform its obligations hereunder and thereunder, and to consummate
the transactions contemplated hereby and thereby.  

 

23

 

The execution and delivery of
this Agreement and each Related Agreement to which it is or will become a party
by Purchaser and the consummation by Purchaser of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of Purchaser
are necessary to authorize this Agreement and each Related Agreement to which
it is or will become a party or to consummate the transactions contemplated
hereby and thereby.  This Agreement and
each Related Agreement to which it is or will become a party has been, or will
be, duly executed and delivered by Purchaser and, assuming its due
authorization, execution and delivery by Sellers, constitutes a legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar Laws of
general applicability relating to or affecting creditors’ rights generally and
by the application of general principles of equity.

 

SECTION 4.3.              No Conflict; Required Filings and Consents.

 

(a)   The execution and delivery of this Agreement
and each Related Agreement to which it is or will become a party by Purchaser
do not, and the performance by Purchaser of its obligations under this
Agreement will not, subject to compliance with the requirements described in Section 4.3(b):
(i) conflict with or, result in a breach of, constitute a default under,
or violate the articles of incorporation or bylaws of Purchaser, (ii) require
any authorization, consent, approval, exemption or other action or notice under
the provisions of Purchaser’s articles of incorporation or bylaws, (iii) conflict
with or violate any Law applicable to Purchaser or by which any of its
properties is bound, or (iv) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
breach or a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the properties or assets of Purchaser pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, Permit,
Lease or other instrument or obligation to which Purchaser is a party or by
which Purchaser or any of its properties or assets is bound, except, in the
case of clauses (iii) and (iv) above for any such conflicts,
violations, breaches, defaults, accelerations or occurrences that would not
reasonably be expected to prevent the consummation of the Transactions or delay
same in any material respect or otherwise reasonably be expected to prevent
Purchaser from performing its obligations under this Agreement or any such
Related Agreement.

 

(b)   The execution and delivery of this Agreement
and each Related Agreement to which it is or will become a party by Purchaser
does not, and the performance of this Agreement and such Related Agreements by
Purchaser shall not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity, except (i) for
applicable requirements of the HSR Act and state blue sky Laws, and (ii) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, individually or in the aggregate would not
reasonably be expected to prevent the consummation of the Transactions or delay
the same in any material respect or otherwise reasonably be expected to prevent
Purchaser from performing its obligations under this Agreement or any such
Related Agreement.

 

24

 

SECTION 4.4.              Absence of Litigation.

 

There are (i) no actions, suits, investigations, or proceedings
pending or, to Purchaser’s knowledge, threatened by or against Purchaser or any
of its properties or assets before any court, administrative, governmental,
arbitral, mediation or regulatory authority or body, domestic or foreign, that
challenge or seek to prevent, enjoin, alter or materially delay the
transactions contemplated hereby, and (ii) no unsatisfied judgments,
decrees, injunctions or orders of any Governmental Entity or arbitrator
outstanding against Purchaser that would reasonably be expected to prevent the
consummation of the transactions contemplated hereby or delay the same in any
material respect or otherwise reasonably be expected to prevent Purchaser from
performing its obligations under this Agreement and each Related Agreement to
which it is or will become a party.

 

SECTION 4.5.              Brokers.

 

No broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission in connection with the Transactions based
upon arrangements made by or on behalf of Purchaser or any of its Affiliates.

 

SECTION 4.6.              Financial
Ability.

 

As of the date of this Agreement, Purchaser has, and on the Closing
Date, Purchaser will have, cash on hand and/or funds readily available to it
from committed financing sources (without the satisfaction of any condition not
set forth in Section 7.1 or 7.2) that will enable Purchaser
to fulfill all of its obligations under this Agreement to be performed by it at
or after the Closing.

 

SECTION 4.7.              Disclaimer of Other Representations and Warranties.

 

PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH
IN ARTICLE II AND ARTICLE III OR IN THE RELATED AGREEMENTS,
NEITHER ANY SELLER NOR ANY SELLER’S AFFILIATES OR REPRESENTATIVES MAKES ANY
REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AT LAW OR IN EQUITY IN
RESPECT OF THE OPTIONS, THE EQUITY SECURITIES OF THE COMPANIES, OR ANY OF THEIR
RESPECTIVE ASSETS, LIABILITIES, BUSINESSES OR OPERATIONS, INCLUDING WITH
RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH
OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.  PURCHASER ACKNOWLEDGES AND AGREES THAT,
EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN ARTICLE II AND ARTICLE III,
PURCHASER IS ACQUIRING THE OPTIONS AND THE PARTNERSHIP INTERESTS ON AN “AS
IS, WHERE IS” BASIS.

 

25

 

ARTICLE V

COVENANTS

 

SECTION 5.1.              Affirmative Covenants of Sellers.

 

Sellers hereby covenant and agree that, prior
to the Closing, except as set forth on Schedule 5 or as otherwise
expressly contemplated by this Agreement or consented to in writing by
Purchaser (which consent Purchaser will not unreasonably withhold, delay or
condition), Sellers shall cause each Company to (i) operate its business
in the usual and ordinary course consistent with past practices; (ii) use
commercially reasonable efforts to preserve substantially intact its business
organization, maintain its rights, retain the services of its respective
principal officers and key employees and maintain its relationship with its
respective principal customers and suppliers, landlords, creditors, employees,
agents and others having business relationships with it; (iii) use its
commercially reasonable efforts to maintain and keep its tangible properties
and assets in as good repair and condition as at present, ordinary wear and
tear excepted, and replace any material item of equipment that shall be worn
out, broken, lost, stolen or destroyed, to the extent such equipment would have
been replaced in the ordinary course or business consistent with past
practices; (iv) keep in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained by it; (v) as
Purchaser may reasonably request from time to time, confer with Purchaser
concerning the status of such Company’s business, operations and finances (so
long as the same does not unreasonably interfere with the conduct of Sellers’
and the Companies’ respective businesses); (vi) provide Purchaser copies
of theatre renovation or construction plans and any material change orders
related to the Leased Real Property under construction or renovation and any
material changes to such plans; (vii) use commercially reasonable efforts
to keep in full force and effect, without amendment, all material rights
relating to such Company’s business; (ix) use commercially reasonable
efforts to comply with all Laws and contractual obligations applicable to the
operations of such Company’s business; (x) deliver to Purchaser within 30
days after the end of each month and within 45 days after the end of each
fiscal quarter an unaudited consolidated balance sheet of the Companies as of
the end of such month or quarter, and the related consolidated statements of
income and cash flow of the Companies for such month or quarter, prepared as
described in the second sentence of Section 3.3(a); (xi) maintain
all books and records of such Company relating to such Company’s business in
all material respects in the ordinary course of business; and (xii) not
terminate the employment of any individual identified on the attached Schedule
5.1, other than for cause (as reasonably determined by Parent).

 

SECTION 5.2.              Restrictive Covenants of Sellers.

 

Except as expressly contemplated by this Agreement or as set forth on Schedule
5 or otherwise consented to in writing by Purchaser (which consent
Purchaser will not unreasonably withhold, condition or delay), from the date
hereof until the Closing, Sellers shall cause each Company to operate in the
ordinary course of business and specifically not to do any of the following:

 

(a)   (i) increase the compensation payable to
or to become payable to any of its directors, officers or employees except for
increases in salary, wages, bonuses or commissions payable or 

 

26

 

to become payable pursuant to existing
contracts or increases payable or to become payable in the ordinary course of
business; (ii) grant any severance or termination pay (other than pursuant
to existing severance agreements and arrangements or policies or in the
ordinary course of business) to, or enter into any new employment (other than
the hiring of at-will employees in the ordinary course of business) or
severance agreement with, any of its directors, officers or employees; (iii) adopt
any new employee benefit plan, benefit arrangement or other pension, profit
sharing, deferred compensation or similar policy, except as may be required by
applicable Law; or (iv) enter into any collective bargaining agreement;

 

(b)   (i) redeem, repurchase or otherwise
reacquire any of its Equity Securities; (ii) effect any reorganization or
recapitalization; or (iii) split, combine or reclassify any of its Equity
Securities or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of, or in substitution for, any of its Equity
Securities;

 

(c)   issue, deliver, award, grant or sell, or
authorize or propose the issuance, delivery, award, grant or sale of, any of
its Equity Securities (including shares held in treasury);

 

(d)   acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a material portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof of
any other Person other than the acquisition of assets in the ordinary course of
business;

 

(e)   sell, lease, exchange, transfer, license,
mortgage, pledge or impose a security interest on or otherwise dispose of, or
agree to sell, lease, exchange, transfer, license, mortgage, pledge or impose a
security interest on or otherwise dispose of any of its material assets; provided
that the foregoing shall not be deemed to restrict the sale, lease, exchange,
transfer, license or other disposition of assets with value in the aggregate of
$250,000 or less, or the sale, use or other disposition of inventories or
dispositions of obsolete or replaced property in the ordinary course of
business;

 

(f)    adopt any amendments to its organizational
documents;

 

(g)   (i) change any of its methods of
accounting in effect at the date of the Interim Balance Sheet; or (ii) settle
or compromise any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes (except where the amount
of such settlements or controversies, individually or in the aggregate, does
not exceed $100,000), or change any of its methods of reporting income or
deductions for federal income Tax purposes from those employed in the
preparation of the federal income Tax returns for the taxable year ending on December 31,
2006, except, in the case of clause (i) or clause (ii), as may be required
by Law or GAAP;

 

(h)   enter into, or become obligated under, any
individual contract, lease, agreement, arrangement or commitment involving
consideration in excess of $250,000 at any time or during any year, or
terminate or otherwise change, amend or modify in any material respect, or
terminate or cancel, any Material Contract or Lease;

 

(i)    directly or indirectly enter into any
transaction, agreement or arrangement with any of such Company’s members,
managers, partners, directors, officers or employees or any of 

 

27

 

their respective Affiliates, except (A) in
connection with the Transactions, (B) with any other Company, or (C) with
any employee of any Company in the ordinary course of business;

 

(j)    cancel any debts or waive any claims or
rights of substantial value (including the cancellation, compromise, release or
assignment of any indebtedness owed to, or claims held by, such Company),
except for cancellations made or waivers granted in the ordinary course of
business;

 

(k)   make any loan or advance to any Person; or

 

(l)    agree in writing or otherwise to do any of
the foregoing.

 

SECTION 5.3.              Tax Matters

 

(a)   Cooperation on Tax Matters.  Purchaser and Sellers shall cooperate fully
and assist each other (and cause their respective Affiliates to assist), as and
to the extent reasonably requested by any other party, in connection with the
filing of Tax Returns of the Companies and any audit, litigation or other
proceeding or disputes with taxing authorities with respect to any Tax Returns
or Taxes of the Companies.  Such
cooperation shall include the retention and (upon the other party’s request and
at the other Party’s expense) the provision of all relevant books, records and
information relating to Tax Returns or Taxes of the Companies and reasonably
relevant to any such audit, litigation, or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.  The Companies, Sellers and Purchaser shall
retain all books and records with respect to Tax matters pertinent to the
Companies relating to any taxable period beginning before the Closing Date
until thirty days following the expiration of the applicable Tax statute of
limitations (including any extension thereof) (and, to the extent notified by
Purchaser or Sellers, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority; provided, however, that in the event a proceeding has been
instituted prior to the expiration of the applicable statute of limitations for
which the information may be requested, the information will be retained until
there is a final determination with respect to such proceeding.

 

(b)   Tax Sharing Agreements.  All Tax sharing agreements or similar
agreements with respect to or involving the Companies shall be terminated as of
the Closing Date and, after the Closing Date, no such party shall be bound
thereby or have any liability thereunder.

 

(c)   754 Election.  The Partnership shall make, and shall cause
the Companies to make, an election under Section 754 of the Code in
connection with the filing of the Companies’ federal income Tax Return for the
taxable period ending on the Closing Date.

 

(d)   Preparation of Returns.  The Sellers shall be responsible for
preparing and filing all income, sales and use Tax Returns for the Companies
for all Tax periods ending on or prior to the Closing Date.

 

28

 

ARTICLE VI

ADDITIONAL AGREEMENTS

 

SECTION 6.1.              Access and Information.

 

(a)   From the date hereof to the Closing, Sellers
shall, and shall cause each Company to, afford to Purchaser and its officers,
employees, accountants, consultants, legal counsel, financing sources and other
representatives, upon reasonable prior notice, reasonable access during normal
business hours to (i) the management and key employees of the Companies
and (ii) the business, properties, contracts and records of the Companies
and all information concerning any of the foregoing and employees of the
Companies as Purchaser may reasonably request to conduct such examination and
investigation of the business and business assets as is reasonably necessary for
the purpose of consummating the transactions contemplated by this Agreement,
including using reasonable efforts to permit Purchaser to conduct any
reasonable environmental investigations at the Leased Real Property; provided
that that:  (x) such examination and
investigation shall be conducted at times and in a manner that does not
unreasonably interfere with the operation of the Companies’ respective
businesses, and (y) if any such examination or investigation results in
damage to or alteration of any land or other premises, Purchaser (at Purchaser’s
expense) shall restore the same to substantially the condition as existed prior
to such examination or investigation.

 

(b)   Until the fifth anniversary of the Closing,
Purchaser shall permit Sellers and their Affiliates and representatives
(collectively, the “Seller Parties”) to have reasonable access and
duplicating rights during normal business hours, upon reasonable prior notice
to Purchaser, to the books, records and personnel relating to the business of
the Companies, to the extent that such access may be reasonably required in
connection with (i) the preparation of any Seller’s Tax returns or with
any audit thereof, (ii) any Seller Party’s financial reporting related to
the operations of the Companies prior to the Closing, or (iii) any suit,
claim, action, proceeding, investigation or regulatory filing relating to the
operation of the business of the Companies prior to the Closing; provided
that any such Seller Parties shall reimburse Purchaser promptly for all
reasonable out-of-pocket costs and expenses incurred by Purchaser in connection
with any such request.  Purchaser shall
attempt in good faith to maintain such books and records in an easily
accessible format and at accessible locations.

 

(c)   Following the Closing, Purchaser shall, and
shall cause its and its Affiliates’ employees to, at any Seller’s reasonable
request, cooperate with Sellers as may be reasonably required in connection
with the investigation and defense of any suit, claim, action, proceeding or
investigation relating to the business of the Companies that is brought against
any Seller or any of their Affiliates at any time after the Closing; provided
that Sellers shall reimburse Purchaser for all reasonable out-of-pocket costs
and expenses incurred by Purchaser in connection with any such request.

 

SECTION 6.2.              Confidentiality.

 

Purchaser acknowledges and agrees that all information received from or
on behalf of any Seller or any of the Companies in connection with the
Transactions shall be deemed received 

 

29

 

pursuant to the confidentiality
agreement, dated as of June 8, 2007, between Consolidated Theatres, LLC
and Regal Entertainment Group (the “Confidentiality Agreement”) and
Purchaser shall, and shall cause its officers, directors, employees,
Affiliates, financial advisors and agents, to comply with the provisions of the
Confidentiality Agreement with respect to such information and the provisions
of the Confidentiality Agreement are hereby incorporated herein by reference
with the same effect as if fully set forth herein.

 

SECTION 6.3.              Further Action; Efforts Regarding Closing.

 

(a)   Each party shall use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other party in doing, all things necessary or
advisable under applicable Laws (including the HSR Act) to consummate and make
effective the Transactions and to cause the conditions to the Transactions set
forth in Section 7.1 to be satisfied, including: (i) obtaining
all necessary actions or nonactions, consents and approvals from Governmental
Entities or other Persons that are necessary in connection with the
consummation of the Transactions; (ii) making all necessary registrations
and filings and taking all reasonable steps as may be necessary to obtain an
approval from, or to avoid an action or proceeding by, any Governmental Entity
or other Person that is necessary in connection with the consummation of the
Transactions; (iii) defending any lawsuits or other legal proceedings,
whether judicial or administrative, that challenge this Agreement or the
consummation of the Transactions in accordance with the terms of this
Agreement, including seeking to have any stay or temporary restraining Order
entered by any court or other Governmental Entity vacated or reversed; (iv) executing
and delivering any additional instruments necessary to consummate the
Transactions in accordance with the terms of this Agreement and to fully carry
out the purposes of this Agreement; and (v) obtaining necessary approvals
under any Law or Contract that may be required in connection with any
Divestiture.

 

(b)   Each of Sellers and Purchaser undertakes and
agrees to file or cause to be filed within ten (10) Business Days after
the date of this Agreement a Notification and Report Form with respect to
the Transactions under the HSR Act with the United States Federal Trade
Commission (the “FTC”) and the Antitrust Division of the United States
Department of Justice (the “Antitrust Division”).  Purchaser shall be responsible for all filing
fees under the HSR Act and shall promptly reimburse Sellers and their
Affiliates for any and all such filing fees. 
Each party shall request an accelerated review from any Governmental
Entity in connection with such filings. 
Each party shall respond as promptly as practicable to any inquiries
from the FTC, the Antitrust Division or any Governmental Entity Laws for
additional information or documentation and to all inquiries and requests from
any Governmental Entity.  Each party will
consult with counsel for the other party as to, and will permit such counsel to
participate in, any litigation referred to in Section 6.3(a).  Each party will (i) promptly notify the
other parties of any written communication to that party from any Governmental
Entity and permit the outside counsel for the other parties to review in
advance any proposed written communication to any such Governmental Entity, (ii) not
agree to participate in any substantive meeting or discussion with any such
Governmental Entity in respect of any filing, investigation or inquiry
concerning this Agreement or the Transactions unless it consults with the
outside counsel for the other parties in advance and, to the extent permitted
by such Governmental Entity, gives the other parties the opportunity to attend
the same, and (iii) furnish the outside counsel of the other 

 

30

 

parties with copies of all correspondence, filings
and written communications with any Governmental Entity with respect to this
Agreement.

 

(c)   Purchaser agrees to take any and all steps
necessary to avoid or eliminate each and every impediment and obtain all
consents under any Antitrust Law that may be required by any Governmental
Entity of competent jurisdiction, so as to enable the parties to close the
Transactions expeditiously, but in no case later than the Termination Date,
including committing to or effecting, by consent decree, hold separate orders,
trust, or otherwise, any Divestiture(s) or licenses of such assets or
businesses as may be required in order to obtain the expiration of the HSR
waiting period, or avoid the entry of, or to effect the dissolution of or
vacate or lift, any Order, that would otherwise have the effect of preventing
or materially delaying the consummation of the Transactions.  Notwithstanding anything to the contrary in
this Section 6.3, nothing in this Agreement will require Purchaser
to take any action, including entering into any consent decree, hold separate
orders or other arrangements, that requires the Divestiture of any assets that,
in the aggregate, accounted for greater than $3,500,000 in Theatre Level Cash
Flow during the trailing twelve fiscal months of the entity or entities in
question ended nearest to September 30, 2007.

 

(d)   Each of Sellers and Purchaser shall give (or
shall cause their respective Affiliates to give) any notices to other Persons,
and shall use, and cause each of their respective Affiliates to use, its
reasonable best efforts to obtain any third-party consents not covered by Sections 6.3(a) through
6.3(c), that are necessary, proper or advisable to consummate the
Transactions and to cause the conditions to the Transactions set forth in Sections
7.2 and 7.3 to be satisfied. 
Each of the parties hereto will furnish to the others such necessary
information and reasonable assistance as the other may request in connection
with the preparation of any required governmental filings or submissions and
will cooperate in responding to any inquiry from a Governmental Entity,
including immediately informing the other party of such inquiry, consulting in
advance before making any presentations or submissions to a Governmental
Entity, and supplying each other with copies of all material correspondence,
filings or communications between any party and any Governmental Entity with
respect to this Agreement.  The parties
shall have the right to review in advance, and to the extent reasonably
practicable each will consult the other on, all information relating to the
other and each of their respective Subsidiaries and Affiliates that appears in
any filing made with, or written materials submitted to, any third party or any
Governmental Entity in connection with the Transactions.  The parties and their respective
representatives shall have the right to participate, to the extent reasonably
practicable, in any meeting or discussion with any Governmental Entity in
respect of any filing, investigation or inquiry concerning this Agreement or
any of the Transactions.

 

(e)   All
sales and transfer taxes, recording charges and similar taxes, fees or charges
imposed as a result of the sale and transfer of the Options and the Partnership
Interests to Purchaser (collectively, the “Transfer Taxes”) together
with any interest, penalties or additions to such Transfer Taxes shall be paid
one-half by Sellers and one-half by Purchaser. 
Sellers and Purchaser shall cooperate in timely making all filings,
returns, reports and forms necessary or appropriate to comply with the
provisions of all applicable laws in connection with the payment of such
Transfer Taxes, and shall cooperate in good faith to minimize, to the fullest
extent possible under such laws, the amount of any such Transfer Taxes payable
in connection therewith.

 

31

 

(f)            Prior
to the Closing, Sellers will not, and will cause each of its Subsidiaries and
its and their respective Affiliates, officers, directors and employees to not,
directly or indirectly (i) solicit, initiate or encourage any Acquisition
Proposal, (ii) enter into any agreement with respect to any Acquisition
Proposal or (iii) continue or participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal.

 

SECTION 6.4.                                          Public
Announcements.

 

Prior to the Closing, Purchaser and Sellers shall
consult with each other prior to issuing any press release or otherwise making
any public statements with respect to the Transactions and neither party shall
issue any such press release or make any such public statement without the
other party’s written approval, except as may be required by Law, in which case
the other party shall be advised and the parties shall use reasonable efforts
to cause a mutually agreeable release or announcement to be issued to the
extent practicable.

 

SECTION 6.5.                                          Employee
Matters.

 

Purchaser shall be responsible for all obligations
arising under or pursuant to COBRA for all “M & A qualified beneficiaries”
as defined under Treas. Reg. §54.4980B-9, and Purchaser agrees that the
employees of Consolidated Theatres Management, LLC as of the Closing Date (and
the COBRA-eligible former employees of Consolidated Theatres Management, LLC as
of the Closing Date) shall be considered such “M&A qualified beneficiaries”
regardless of whether they technically satisfy the definition of “M&A
qualified beneficiary” set forth in Treas. Reg. Sec. 54.4980B-9.  For the avoidance of doubt, it is understood
that any “M&A qualified beneficiary” who elects to receive COBRA coverage
from Purchaser must pay (or have paid on his or her behalf) the COBRA premium
amount in order to obtain such coverage. Nothing in this Agreement shall be
construed to limit the ability of Purchaser, or any Company to terminate the
employment of any employee of any Company at any time and for any or no reason
on or after the Closing.  No provision of
this Section 6.5 shall create any third party beneficiary rights in
any Person, including any employee or former employee of any Company or any
beneficiary or dependent of any such employee or former employee.  In addition, nothing contained in this
Agreement, express or implied:  (i) shall
be construed to establish, amend, or modify any benefit plan, program,
agreement or arrangement; (ii) shall alter or limit the ability of
Purchaser, the Companies, or any of their Affiliates to amend, modify or
terminate any benefit plan, program, agreement or arrangement at any time
assumed, established, sponsored or maintained by any of them; or (iii) is
intended to confer upon any current or former employee of any Company or any
other Person any right to employment or continued employment for any period of
time by reason of this Agreement, or any right to a particular term or
condition of employment.

 

SECTION 6.6.                                          Labor
Matters; WARN.

 

(a)          Purchaser
shall not, and shall cause the Companies not to, at any time prior to the 61st
day following the Closing Date, without fully complying with the notice and
other requirements of the Worker Adjustment and Retraining Notification Act of
1988 (“WARN Act”), effectuate (i) a “plant closing” (as defined in
the WARN Act) affecting any site of 

 

32

 

employment or one or more
facilities or operating units within any site of employment of the Companies,
or (ii) a “mass layoff” (as defined in the WARN Act) affecting any site of
employment of the Companies.

 

(b)         If
Purchaser takes any action within 180 days after the Closing Date that
independently, or in connection with any reduction in the size of the Companies’
work force occurring within the ninety day period prior to the Closing Date,
could be construed as a “plant closing” or “mass layoff,” as those terms are
defined in the WARN Act, Purchaser shall be solely responsible for providing
any notice required by the WARN Act and for making payments, if any, and paying
all penalties and costs, if any, that may result from any failure to provide
such notice.

 

SECTION 6.7.                                          Information,
Etc.

 

Purchaser acknowledges and agrees that neither any
Seller nor any Affiliate or representative of any Seller has made any
representation or warranty, expressed or implied, as to any Company or as to
the accuracy or completeness of any information regarding any Company furnished
or made available to Purchaser and its representatives, except as expressly set
forth in Articles II and III, or any Related Agreement, and
Sellers shall not have or be subject to any liability to Purchaser or any other
Person resulting from the distribution to Purchaser, or Purchaser’s use of or
reliance on, any such information or any information, documents or material
made available to Purchaser in any data room, presentations or in any other
form (including the Confidential Information Memorandum dated Summer 2007
prepared by “UBS Investment Bank” concerning the Companies) in expectation of,
or in connection with, the transactions contemplated hereby.

 

SECTION 6.8.                                          Notification.

 

(a)  Between the date of this Agreement and the
Closing Date, Sellers shall notify Purchaser in writing if Sellers acquire
Knowledge of any fact or condition that causes or constitutes a breach of any
of Sellers’ representations and warranties as of the date of this Agreement, or
if Sellers acquire Knowledge of the occurrence of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or constitute
a breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition.  Should any such fact or
condition require any change in Sellers’ Schedules (or the addition of one or
more schedules to describe one or more exceptions to the representations and
warranties set forth in Articles II and III) if such Schedules
were dated the date of the occurrence or discovery of any such fact or
condition, Sellers shall promptly deliver to Purchaser a supplement to the
Schedules specifying such change(s).

 

(b) If matters disclosed in a notification or
supplement delivered pursuant to Section 6.8(a) (and in any
other notification(s) or supplement(s) theretofore delivered pursuant
to Section 6.8(a)) could reasonably be expected to result in
Damages (including for the purposes of this Section 6.8(b),
consequential damages, lost profits, indirect damages, punitive damages and
exemplary damages) in an aggregate amount that exceeds $12,000,000 (and Sellers
so state in writing when they deliver such notification or supplement and
include a written description in reasonable detail of Sellers’ basis for such
determination), then Purchaser shall have the right to 

 

33

 

terminate this Agreement
by giving written notice to that effect to Sellers not later than the tenth
(10th) Business Day after the delivery of such notification or supplement (and,
if necessary, the Closing will be postponed to such tenth (10th) Business Day);
provided that if Purchaser has the right to, but does not, so elect to
terminate this Agreement within such ten (10) Business Day period and
subsequently Sellers deliver to Purchaser one or more additional notifications
or supplements pursuant to Section 6.8(a), then Purchaser shall
have the right to terminate this Agreement within ten (10) Business Days
after the delivery of each such additional notification or supplement.

 

(c) If matters disclosed in a notification or
supplement delivered pursuant to Section 6.8(a) (and in any
other notification(s) or supplement(s) theretofore delivered pursuant
to Section 6.8(a)) could reasonably be expected to result in
Damages (including for the purposes of this Section 6.8(c),
consequential damages, lost profits, indirect damages, punitive damages and
exemplary damages, but excluding for purposes of this Section 6.8(c) all
such extent actual or anticipated Damages to the extent they arise out of or
are anticipated to arise out of acts or omissions of any Seller or the
Partnership that are material violations or breaches of any covenant or
agreement set forth in this Agreement) in an aggregate amount that exceeds
$21,000,000 (and Sellers so state in writing when they deliver such
notification or supplement and include a written description in reasonable
detail of Sellers’ basis for such determination), then Sellers shall have the
right to terminate this Agreement by giving written notice to that effect to
Purchaser not later than the tenth (10th) Business Day after the delivery of
such notification or supplement; provided that if Sellers have the right to,
but do not, so elect not to terminate this Agreement within such ten (10) Business
Day period and subsequently Sellers deliver to Purchaser one or more additional
notifications or supplements pursuant to Section 6.8(a), then
Sellers shall have the right to terminate this Agreement within ten (10) Business
Days after the delivery of each such additional notification or supplement.

 

(d)  Whether or not Purchaser has the right to
terminate this Agreement pursuant to Section 6.8(b), then the
delivery of such notification(s) or supplement(s) shall not be deemed
to amend or supplement Seller’s Schedules for purposes of Article VIII
or prevent or cure any such breach for purposes of Article VIII or
otherwise affect any rights of Purchaser under Article VIII (except as
provided in the proviso in the first sentence of Section 8.1(c)).  If Purchaser does not have the right to
terminate this Agreement pursuant to Section 6.8(b), then the
delivery of such notification(s) and supplement(s) shall not be
deemed to amend or supplement Seller’s Schedules for purposes of Articles
VII and IX or prevent or cure any breach for purposes of such
Articles or otherwise affect any rights of Purchaser under Articles VII
and IX.

 

(e) If Purchaser has the right to terminate this
Agreement pursuant to Section 6.8(b) following the delivery of
any notification or supplement pursuant to Section 6.8(a) and
does not do so within the ten (10) Business Day period referred to
therein, then all such disclosures included in such notification or supplement
or any other notification or supplement delivered pursuant to Section 6.8(a)
delivered to Purchaser prior to the first day of such ten (10) Business
Day period shall be deemed accepted by Purchaser (other than for purposes of Article VIII),
the condition to Closing set forth in Section 7.2(a) shall be
deemed waived with respect to the matters so disclosed in any such notification
or supplement, and the disclosure relative to Sellers’ representations and
warranties shall be deemed modified or supplemented as indicated in all such
notifications and supplements for purposes of Article IX.

 

34

 

(f)   In addition to the foregoing, between
the date of this Agreement and the Closing Date, Sellers shall promptly notify
Purchaser of the occurrence of any breach of any covenant of Sellers or the
Companies in Article V or this Article VI of the
occurrence of any event that may make the satisfaction of the conditions in Article VII
impossible or unlikely.

 

SECTION 6.9.                                          Contacts
with Suppliers, Customers and Other Parties.

 

Without the prior written consent of Sellers, which
shall not be unreasonably withheld or delayed, prior to the Closing, Purchaser
shall not, and shall cause its Affiliates and representatives not to, contact
any suppliers or independent contractors to, or customers of or any of the
Companies, any employees of any of the Companies, counterparties to any
management agreement or other contract to which any Company is a party, or any
Governmental Entity (other than in connection with any filings made under the
HSR Act or in connection with other consents, approvals or waivers required to
be obtained by Purchaser from Governmental Entities in connection with the
transactions contemplated hereby or as required by applicable Law) in
connection with or pertaining to the transactions contemplated by this
Agreement.

 

SECTION
6.10.                                   Kingstowne
Litigation.

 

If the Kingstowne Litigation has not been resolved in
its entirety by one or more Final Judgments as of the Adjustment Time, then
Parent shall use reasonable efforts to cause the Companies to assign, prior to
the Closing, all of the Companies’ right, title and interest in and with
respect to the Kingstowne Litigation to Parent or Parent’s designee (other than
the Companies), without any consideration to the Companies.  In the event that the Companies are
prohibited from assigning the Kingstowne Litigation to Parent or its designee
prior to the Closing, or Parent reasonably concludes that such an assignment
could adversely affect the validity or value of such claim, then from and after
the Closing, Purchaser shall cause the Companies to use commercially reasonable
efforts to pursue the claims that are the subject of the Kingstowne Litigation,
including by means of an appeal of any judgment rendered in connection
therewith, and to collect any amount that becomes payable to any Company in
respect of such claims.  In such event,
at any Seller’s written request, Purchaser shall permit Sellers to conduct the
pursuit of such claims (including the settlement or other compromise and/or the
collection of any such amount) on behalf of the Companies using legal counsel
selected by Sellers that is reasonably acceptable to Purchaser, and will cause
the Companies to cooperate with Sellers in the pursuit of such claims and the
collection of any such amount as any Seller may reasonably request.  In the event that Sellers elect to conduct the
pursuit of such claims and/or the collection of any such amount:

 

(a)          Purchaser
shall not, and shall not cause or permit any Company to, settle or otherwise
comprise any such claim (including by consenting to the entry of any judgment)
without Parent’s prior written consent;

 

(b)         Sellers
will (i) reimburse Purchaser for any out-of-pocket expenses incurred by
any Company in connection with the pursuit of such claims and/or the collection
of any such 

 

35

 

amount that becomes
payable to any Company, within five (5) Business Days after such entity’s
payment thereof and notice to Sellers and (ii) pay to Purchaser reasonable
compensation for man-hours expended in the pursuit of such claims; and

 

(c)          Purchaser
will cause the Companies to pay over to Sellers any amount delivered to the
Companies in respect of such claims, within five (5) Business Days after
such entity’s receipt thereof.

 

Without limiting the foregoing, if an assignment of
the type described in the first sentence of this Section 6.10 does
not occur at or prior to the Closing, then after the Closing, at Parent’s
expense, Purchaser will take such actions as Parent may reasonably request to
effectuate such an assignment.

 

SECTION 6.11.                                   Landlord
Approvals, Estoppels; SNDAs; Memoranda of Leases.

 

(a)          With
respect to each Lease for which a Landlord Approval is required, Sellers shall
promptly after the date of this Agreement request that the lessor thereunder
grant such Landlord Approval.  In
connection with such request, Purchaser shall furnish to such landlord all
materials required by the related Lease as a condition to or in connection with
such a request, and such other information as such landlord may reasonably
request from time to time.  Purchaser and
Sellers shall use reasonable best efforts to promptly obtain each Landlord
Approval.  Within five (5) calendar
days of receipt of any Landlord Approval executed by any such lessor, Sellers
shall deliver a true and complete copy thereof to Purchaser.

 

(b)         With
respect to each Lease, Sellers shall promptly after the date of this Agreement
request that the lessor thereunder execute an estoppel (a “Lessor Estoppel”)
in the form of Exhibit C attached hereto.  Sellers and Purchaser shall use reasonable
best efforts to promptly obtain such a Lessor Estoppel from each such
lessor.  Sellers and Purchaser shall make
such modifications to the forms attached hereto as Exhibit C as
such lessors shall reasonably request. 
Within five (5) calendar days of receipt of any Lessor Estoppel
executed by any such lessor, Sellers shall deliver a true and complete copy
thereof to Purchaser.

 

(c)          With
respect to each Lease which is a sublease, Sellers shall promptly after the
date of this Agreement request that each superior lessor execute a commercially
reasonable non-disturbance agreement in form and substance reasonably requested
by Purchaser.  Sellers and Purchaser
shall use reasonable best efforts to promptly obtain such a non-disturbance
agreement, and in form and substance reasonably satisfactory to Purchaser; provided
that Sellers shall have no such obligation with respect to any superior lessor
that has previously executed such a commercially reasonable non-disturbance
agreement in form and substance reasonably acceptable to Purchaser.

 

(d)         With
respect to each Lease which is, or may be, subordinate to a mortgage or deed of
trust executed by the lessor, or by a superior lessor, Sellers shall promptly
after the date of this Agreement request that the mortgagee or beneficiary of
each such deed of trust execute a non-disturbance agreement in form and
substance reasonably requested by Purchaser. 
Sellers and 

 

36

 

Purchaser shall use
reasonable best efforts to promptly obtain such a non-disturbance agreement; provided
that Sellers shall have no such obligation with respect to any mortgagee or
beneficiary that has previously executed such a non-disturbance agreement in
form and substance reasonably satisfactory to Purchaser.

 

(e)          With
respect to each Lease for which a memorandum of lease is not recorded in the
official real property records in which the Leased Real Property is located,
Sellers shall promptly after the date of this Agreement request that the lessor
thereunder execute a memorandum of lease in form and substance reasonably
requested by Purchaser.  Sellers and
Purchaser shall use reasonable best efforts to promptly obtain such memoranda
of lease, duly executed and acknowledged by such lessor and otherwise in
recordable form.  Within five (5) calendar
days of receipt by Sellers of any such memorandum executed by any such lessor,
Sellers shall deliver a true and complete copy thereof to Purchaser.

 

(f)            Purchaser
may refuse to approve a lessor consent or estoppel on any reasonable
grounds.  Purchaser shall use reasonable
best efforts to obtain releases of all guaranties of any Company’s obligations
given by any Person under any Lease, including furnishing any guaranties,
additional deposits, letters of credit or other security for performance of the
lessee’s obligations under any of the Leases that any landlord may reasonably
request.

 

(g)         Notwithstanding
anything set forth in any estoppel, consent, non-disturbance agreement or other
memorandum which is executed or delivered pursuant to this Section 6.11,
as between Purchaser and Sellers, this Agreement shall govern the rights,
interests, obligations and liabilities under and with respect to the Leases.

 

SECTION 6.12.                                   Non-Competition
Agreement Amendment.

 

Prior to the Closing, Sellers shall use their
reasonable best efforts to cause Section 7(a) of the Executive
Employment Agreement dated as of November 1, 2003 between Consolidated
Theatres Management, L.L.C. and E. Casey Brock II (the “Brock Employment
Agreement”) to be amended to delete the proviso to the second sentence
thereof.

 

SECTION 6.13.                                   ABRY
Indemnification Letter.

 

Prior to the Closing, Sellers shall obtain the
agreement of ABRY Partners, LLC or an affiliate thereof reasonably acceptable
to Purchaser (“ABRY”) to execute and deliver at Closing an
indemnification letter for the benefit of Purchaser substantially in the form
of Exhibit D attached hereto (the “ABRY Indemnification Letter”).

 

ARTICLE
VII

CLOSING CONDITIONS

 

SECTION 7.1.                                          Conditions
to Obligations of Purchaser and Sellers.

 

The respective obligations of Purchaser and Sellers to
effect the Transactions at the Closing shall be subject to the satisfaction at
or prior to the Closing of the following conditions, 

 

37

 

any or all of which may
be waived, in whole or in part, to the extent permitted by applicable Law:

 

(a)          No
Order.  No Governmental Entity or
federal or state court of competent jurisdiction shall have pending or have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, judgment, injunction or other order
(whether temporary, preliminary or permanent), in any case that is in effect
and that prevents or prohibits consummation of the Transactions or would cause
any material liability to be imposed on Purchaser or any Seller if the
Transactions were consummated.

 

(b)         HSR
Act.  Any waiting period and any
extensions thereof under the HSR Act shall have expired or been terminated.

 

SECTION 7.2.                                          Additional
Conditions to Obligations of Purchaser.

 

The obligations of Purchaser to effect the
Transactions are also subject to the following conditions, any or all of which
may be waived, in whole or in part, by Purchaser to the extent permitted by
applicable Law:

 

(a)          Representations
and Warranties of Sellers.  Taken
together, the representations and warranties of Sellers set forth in Article II
and Article III (disregarding, for purposes of this Section 7.2(a),
all materiality qualifications therein) shall be true and correct as of the
Closing (or, if made as of a specified date, then as of such specified date),
in each case except in such respects as, taken as a whole, have not had and
would not reasonably be expected to have a Company Material Adverse Effect.

 

(b)         Agreements
and Covenants of Sellers.  The
agreements and covenants of Sellers required to be performed on or before the
Closing shall have been performed in all material respects.

 

(c)          Deliveries.  Sellers shall have delivered or caused to be
delivered each of the following:

 

(i)                                     a
certificate signed by Sellers dated the Closing Date, stating that the
conditions specified in Section 7.2(a) and Section 7.2(b) have
been satisfied;

 

(ii)                                  resignations
of the officers, directors or similar governing individuals of the Companies
(other than any officers, directors or other such individuals identified by
Purchaser in writing);

 

(iii)                               a certificate of good
standing of each Seller and each Company (other than the Partnership) from the
Secretary of State of Delaware dated within ten (10) days of the Closing
Date;

 

(iv)                              certified
copies of the partnership agreement, certificate of formation and limited
liability company agreement, as applicable, of each of the Companies;

 

38

 

(v)                                 certified
copies of the resolutions duly adopted by each Seller’s board of directors (or
similar governing body) and the shareholders of each of the Corporations
authorizing its execution, delivery and performance of this Agreement and the
other agreements contemplated hereby to which it is a party and the
consummation of all transactions contemplated hereby and thereby;

 

(vi)                              an
opinion of Sellers’ counsel, dated the Closing Date, as to the matters
described in Exhibit E attached hereto;

 

(vii)                           a payoff demand letter for
the outstanding amount of the Bank Facility on the Closing Date stating that,
upon payment of the amounts specified therein in accordance with the
instructions specified therein, all Encumbrances securing the amounts payable
thereunder shall be released;

 

(viii)                        [intentionally omitted];

 

(ix)                                [intentionally
omitted];

 

(x)                                   executed
counterparts of an amendment to the Brock Employment Agreement of the type
described in Section 6.12, signed by Casey Brock;

 

(xi)                                executed
counterparts of the ABRY Indemnification Letter; and

 

(xii)                             the Estimated Closing
Certificate.

 

(d)         Required
Consents.  Each of the Landlord
Approvals shall have been obtained in form and substance reasonably
satisfactory to Purchaser and shall be in full force and effect.

 

(e)          Escrow
Agreement.  The Escrow Agent and Parent
shall have each executed and delivered signatures to the Escrow Agreement to
Purchaser.

 

(f)            No
Material Adverse Effect.  Since the
date of this Agreement, there shall have not been a change, event or condition
that has had or would reasonably be expected to have a Company Material Adverse
Effect.

 

(g)         Bank
Facility.  Concurrently with the
Closing, the Bank Facility shall be satisfied in full as described in Section 1.3(c)
and any and all Encumbrances related thereto released in their entirety.

 

If the Closing occurs, all closing conditions set
forth in this Section 7.2 that have not been fully satisfied as of
the Closing shall be deemed to have been fully waived by Purchaser; provided
that such waiver will not affect any right to indemnification pursuant to Article VIII
in respect of any inaccuracy in any certification made pursuant to Section 7.2(c)(i).

 

39

 

SECTION 7.3.                                          Additional
Conditions to Obligations of Sellers.

 

The obligations of the Sellers to effect the
Transactions and the other transactions contemplated in this Agreement are also
subject to the following conditions any or all of which may be waived, in whole
or in part, by Sellers to the extent permitted by applicable Law:

 

(a)          Representations
and Warranties of Purchaser.  Taken
together, the representations and warranties of Purchaser in Article IV
(disregarding, for purposes of this Section 7.3(a), all materiality
qualifications therein) shall be true and correct as of the Closing (or, if made
as of a specified date, then as of such specified date), in each case except in
such respects as, taken as a whole, have not had and would not reasonably be
expected to have a material adverse effect on Purchaser’s ability to perform
its obligations under this Agreement or any Related Agreement to which it is or
will become a party.

 

(b)         Agreements
and Covenants of Purchaser.  The
agreements and covenants of Purchaser required to be performed on or before the
Closing shall have been performed in all material respects.

 

(c)          [intentionally omitted];

 

(d)         Delivery
of Consideration.  Purchaser shall
have delivered the Closing Cash Payment, the Option Exercise Price and the
Escrow Amount in accordance with Section 1.3(b).

 

(e)          Other
Deliveries.  Purchaser shall have
delivered or caused to be delivered to Sellers each of the following:

 

(i)                                     a
certificate signed by Purchaser dated the Closing Date stating that the
conditions specified in Section 7.3(a) and Section 7.3(b) have
been satisfied; and

 

(ii)                                  certified
copies of the resolutions duly adopted by Purchaser’s board of directors or
equivalent governing body authorizing its execution, delivery and performance
under this Agreement and the other agreements contemplated hereby to which it
is a party, and the consummation of all transactions contemplated hereby and
thereby.

 

(f)            Escrow
Agreement.  The Escrow Agent and
Purchaser shall have each executed and delivered signatures to the Escrow
Agreement to Parent.

 

(g)         Commonwealth
20 Landlord Agreement.  The Commonwealth
20 Landlord Agreement shall be in full force and effect or Parent shall have
been released by a written agreement of the Commonwealth 20 Landlord, in form
and substance reasonably satisfactory to Parent, from its obligations under the
“Lease,” the “Premises” and the “Consolidated Guaranty” (as each such term is
defined in the Commonwealth 20 Landlord Agreement).

 

If the Closing occurs, all closing conditions set
forth in this Section 7.3 that have not been fully satisfied as of
the Closing shall be deemed to have been fully waived by Sellers;  provided that such waiver will not
affect any right to indemnification pursuant to Article VIII in
respect of any inaccuracy in any certification made pursuant to Section 7.3(e)(i).

 

40

 

SECTION 7.4.                                          Frustration
of Closing Conditions.

 

No party may rely on the failure of any condition set
forth in this Article VII to be satisfied if such failure was
caused by such Party’s failure comply with this Agreement or to act in good
faith to endeavor to consummate the transactions provided for herein.

 

ARTICLE
VIII

INDEMNIFICATION

 

SECTION 8.1.                                          Indemnification
of Purchaser.

 

(a)          Sellers
agree that, after the Closing, subject to the limitations set forth in this Article VIII,
Sellers shall indemnify, defend and hold harmless Purchaser and its officers,
directors, agents and representatives (each hereinafter referred to
individually as a “Seller-Indemnified Person” and collectively as “Seller-Indemnified
Persons”), from and against any and all claims, demands, suits, actions,
causes of actions, losses, costs, damages, liabilities and out-of-pocket
expenses incurred or paid, including reasonable attorneys’ fees, costs of
investigation or settlement, other professionals’ and experts’ fees, and court
or arbitration costs but specifically excluding (except to the extent the same
may be awarded to a third party in a Third-Party Claim) consequential damages,
lost profits, indirect damages, punitive damages and exemplary damages
(collectively referred to as “Damages”), to have arisen out of or to
have resulted from, in connection with, or by virtue of (i) facts or
circumstances that constitute an inaccuracy, misrepresentation, breach of,
default in, or failure to perform, any of the representations, warranties or
covenants given or made by Sellers in this Agreement or in the certificate
delivered pursuant to Section 7.2(c)(i) (collectively, the “Limited-Indemnity
Items”), (ii) the High Point Litigation, (iii) Closing
Indebtedness, (iv) the leases retained by Sellers pursuant to Section 1.7,
or (v) any action, suit, investigation, or proceeding disclosed on Schedule
3.5 with respect to which the defense is not being provided or paid for by
the insurer (collectively with the Limited-Indemnity Items, the High Point
Litigation, Closing Indebtedness and the retained leases, the “Seller
Indemnified Items”).  For the
avoidance of doubt, no Seller-Indemnified Person shall be entitled to be
indemnified pursuant to this Section 8.1 for any liability to the
extent such liability is actually reflected in the Closing Working Capital used
to determine the Final Purchase Price.

 

(b)         Any
claim for indemnification made by a Seller-Indemnified Person under this Section 8.1
in respect of the Limited-Indemnity Items must be asserted in a writing
delivered to Sellers no later than the Survival Date and, if asserted by such
date, such claim shall survive the Survival Date until final resolution
thereof.  The right to indemnification,
reimbursement or other remedy based upon such representations, warranties,
covenants and obligations shall not be affected by any investigation (including
any environmental investigation or assessment) conducted with respect to, or
any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date.  Except as provided in the proviso
to the first sentence of Section 8.1(c), the waiver of any covenant
or condition will not affect the right to indemnification, reimbursement or
other remedy.

 

41

 

(c)          The
aggregate liability of Sellers on account of all Limited-Indemnity Items
pursuant to Section 8.1 shall be limited to $12,000,000 (the “Limited-Indemnity
Cap”), and claims for Damages in respect of Limited-Indemnity Items shall
be limited to such amount, whether the Seller-Indemnified Person in question is
the Purchaser or another Seller-Indemnified Person; provided that, if Purchaser
has the right to terminate this Agreement pursuant to Section 6.8 prior to
the Closing and does not do so, then the Limited-Indemnity Cap will be reduced
by the amount, if any, of the Limited 6.8 Liabilities included in determining
the Closing Working Capital Adjustment (but not by an amount that exceeds the
Closing Working Capital Adjustment). 
Without limiting the foregoing, the Seller-Indemnified Persons’ sole
recourse in respect of Limited-Indemnity Items shall be to the amounts held
from to time by the Escrow Agent and not theretofore released pursuant to the
Escrow Agreement.  In addition, the
indemnification provided for in this Section 8.1 in respect of the
Limited-Indemnity Items shall not apply unless and until the aggregate Damages
determined to be due for which one or more Seller-Indemnified Persons seeks or
has sought indemnification hereunder in respect of Limited-Indemnity Items
exceeds a cumulative aggregate of $2,500,000 (the “Deductible”), in
which event the Seller-Indemnified Persons shall, subject to the other
limitations herein, be indemnified for such Damages to the extent in excess of
the Deductible.  Notwithstanding the
foregoing limitations, Sellers shall indemnify Purchaser from and against the
entirety of any Damages arising from facts or circumstances that constitute
fraud or willful breach of any covenant by Sellers.

 

(d)         In
view of the Deductible, and solely for purposes of determining the amount of
any Damages, the representations and warranties of Sellers set forth in this
Agreement (or in any instrument, certificate or affidavit delivered at the
Closing with respect thereto) shall be considered without regard to any
qualification based on materiality or “Material Adverse Effect” set forth
therein.

 

(e)          The
amount to which a Seller-Indemnified Person may become entitled under this Article VIII
shall be net of any actual recovery (whether by way of payment, discount,
credit, off-set, counterclaim or otherwise) received from a third party
(including any insurer) less any cost associated with receiving such recovery
in respect of a claim.  To the extent
that insurance, “pass-through” warranty coverage from a manufacturer or other
form of recovery or reimbursement from a third party is available to any
Seller-Indemnified Person to cover any item for which indemnification may be
sought hereunder, Purchaser shall, or shall cause each other Seller-Indemnified
Person to, on a timely and expeditious basis, use commercially reasonable
efforts to effect recovery under applicable insurance policies, and use
commercially reasonable efforts to pursue to conclusion available remedies or
causes of action to recover the amount of its claim as may be available from
such other party; provided that the availability of a potential recovery
against such a third party shall not affect Purchaser’s right to make a claim
for indemnity pursuant to this Section 8.1.  To the extent of any indemnification with
respect to any claim referred to in the previous sentence, Purchaser shall
assign, and Purchaser shall cause each other Seller-Indemnified Person to
assign, to Sellers, to the fullest extent allowable, its claim against such
insurance, warranty coverage or third-party claim, or in the event assignment
is not permissible, but Purchaser or the other Seller-Indemnified Person in
question is nonetheless permitted to pursue such claim on Sellers’ behalf,
Purchaser shall pursue, or shall cause such other Seller-Indemnified Person to
pursue, such claim, at Sellers’ direction and expense and without additional
out-of-pocket expense to any Seller-Indemnified Person, with 

 

42

 

any recovery thereon to
be transmitted promptly to Sellers upon receipt.  To the extent that indemnification has not
been paid on account of any such claim, any Seller-Indemnified Person may
pursue recovery against such insurance warranty coverage or third party and
shall be entitled to retain all recoveries made as a result of any such
action.  Purchaser shall, and shall cause
the Companies to, furnish Sellers with such information respecting the assets,
business and financial records of Purchaser and the Companies relating to any
such claims as Sellers may, from time to time, reasonably request and at the
sole cost and expense of Sellers.  After
the Closing, Purchaser shall maintain in effect, or will cause the Companies to
maintain in effect, in each case until the Survival Date, or for such longer
time as there remains a Contested Claim, insurance coverage in amounts, and
with coverage, not materially less favorable to the Companies than the
insurance coverage as maintained by the Companies as of the date of this
Agreement.  In addition, the amount to
which the Seller-Indemnified Persons may become entitled under this Article VIII
shall be net of any Tax benefits theretofore realized by Purchaser and its
Affiliates (including the Companies, after the Closing) in respect of Damages
to be indemnified hereunder, and as and when Purchaser or any of its Affiliates
realizes any Tax benefits in respect of Damages theretofore indemnified
hereunder, Purchaser shall pay Parent an amount equal to the amount of such Tax
benefit so realized.

 

(f)            Each
Seller-Indemnified Person shall be responsible for taking or causing to be
taken reasonable steps to mitigate its Damages upon and after becoming aware of
any event that could reasonably be expected to give rise to Damages that may be
indemnifiable under this Article VIII.

 

SECTION 8.2.                                          Indemnification
of Sellers.

 

(a)          Purchaser
agrees that, after the Closing, subject to the limitations set forth in this Article VIII,
Purchaser shall indemnify, defend and hold harmless Sellers, their officers,
directors, agents, representatives, and respective successors and assigns, and
Herman Stone and any Affiliate of Herman Stone with respect to clause (iii) of
this Section 8.2(a) (the “Purchaser-Indemnified Persons”),
from and against any and all Damages arising out of or resulting from (i) any
breach of any representation, warranty or covenant made by Purchaser in this
Agreement or in any of the certificates or other instruments or documents
furnished by Purchaser pursuant to Section 7.3(e)(i), (ii) the
absence of any Landlord Approval (whether or not such Landlord Approval is
deemed to have been obtained for purposes of Section 7.2(d)), or (iii) any
guaranty entered into prior to the date of this Agreement, or any Lease entered
into prior to the date of this Agreement as a co-tenant with a Company, by any
Seller, Herman Stone or any Affiliate of Herman Stone, to the extent relating
to any liability or other obligation of a Company arising after the Closing or
reflected in the Closing Working Capital as finally determined pursuant to this
Agreement (the “Purchaser Indemnified Items”).  Any claim for indemnification made by a
Purchaser-Indemnified Person under clause (i) of this Section 8.1
in respect of the Purchaser Indemnified Items must be asserted in a writing
delivered to Purchaser by no later than the Survival Date.  The aggregate liability of Purchaser on
account of all Purchaser Indemnified Items pursuant to clause (i) of this Section 8.2(a) shall
be limited to the amount of the Limited Indemnity Cap, and claims for Damages
in respect of Purchaser Indemnified Items shall be limited to such amount,
whether the Purchaser-Indemnified Person in question is a Seller or another
Purchaser-Indemnified Person.  In
addition, the indemnification provided for in clause (i) of this Section 8.2(a) in
respect of the Purchaser Indemnified Items shall not apply unless 

 

43

 

and until the aggregate
Damages determined to be due for which one or more Purchaser-Indemnified
Persons seeks or has sought indemnification hereunder in respect of Purchaser
Indemnified Items exceeds the Deductible, in which event the
Purchaser-Indemnified Persons shall, subject to the other limitations herein,
be indemnified for such Damages to the extent in excess of the Deductible.

 

(b)         In
view of the Deductible, and solely for purposes of determining the amount of
any Damages, the representations and warranties of Purchaser set forth in this
Agreement (or in any instrument, certificate or affidavit delivered at the
Closing with respect thereto) shall be considered without regard to any
qualification based on materiality or “material adverse effect” set forth
therein.

 

(c)          The
amount to which a Purchaser-Indemnified Person may become entitled under this Article VIII
shall be net of any actual recovery (whether by way of payment, discount,
credit, off-set, counterclaim or otherwise) received from a third party
(including any insurer) less any cost associated with receiving such recovery
in respect of a claim.  To the extent
that insurance, “pass-through” warranty coverage from a manufacturer or other
form of recovery or reimbursement from a third party is available to any
Purchaser-Indemnified Person to cover any item for which indemnification may be
sought hereunder, Sellers shall, or shall cause each other
Purchaser-Indemnified Person to, on a timely and expeditious basis, use
commercially reasonable efforts to effect recovery under applicable insurance
policies and warranties, and use commercially reasonable efforts to pursue to
conclusion available remedies or causes of action to recover the amount of its
claim as may be available from such other party; provided that the
availability of a potential recovery against such a third party shall not
affect any Seller’s right to make a claim for indemnity pursuant to this Section 8.2.  To the extent of any indemnification with
respect to any claim referred to in the previous sentence, Sellers shall
assign, and Sellers shall cause each other Purchaser-Indemnified Person to
assign, to Purchaser, to the fullest extent allowable, its claim against such
insurance, warranty coverage or third-party claim, or in the event assignment
is not permissible, but Sellers or the other Purchaser-Indemnified Person in
question is nonetheless permitted to pursue such claim on Purchaser’s behalf,
Sellers shall pursue, or shall cause such other Purchaser-Indemnified Person to
pursue, such claim, at Purchaser’s direction and expense and without additional
out-of-pocket expense to any Purchaser-Indemnified Person, with any recovery
thereon to be transmitted promptly to Purchaser upon receipt.  To the extent that indemnification has not
been paid on account of any such claim, any Purchaser-Indemnified Person may
pursue recovery against such insurance warranty coverage or third party and
shall be entitled to retain all recoveries made as a result of any such
action.  In addition, the amount to which
the Purchaser-Indemnified Persons may become entitled under this Article VIII
shall be net of any Tax benefits theretofore realized by Sellers and their
Affiliates in respect of Damages to be indemnified hereunder, and as and when a
Seller or any of its Affiliates realizes any Tax benefits in respect of Damages
theretofore indemnified hereunder, Sellers shall pay Purchaser an amount equal
to the amount of such Tax benefit so realized. 
Sellers shall furnish Purchaser with such information respecting the
assets, business and financial records of Sellers relating to any such claims
as Purchaser may, from time to time, reasonably request and at the sole cost
and expense of Purchaser.

 

(d)         Each
Purchaser-Indemnified Person shall be responsible for taking or causing to be
taken reasonable steps to mitigate its Damages upon and after becoming aware of
any event that 

 

44

 

could reasonably be
expected to give rise to Damages that may be indemnifiable under this Article VIII.

 

SECTION 8.3.                                          Notice
of Claim.

 

(a)          As
used herein, the term “Claim” means a claim for indemnification by any
Seller-Indemnified Person or any Purchaser-Indemnified Person, as the case may
be, for Damages under this Article VIII (such Person making a
Claim, an “Indemnitee”).  An
Indemnitee shall give notice of a Claim under this Agreement, whether for its
own Damages or for Damages incurred by any other Seller-Indemnified Person or
Purchaser-Indemnified Person, as applicable, pursuant to written notice of such
Claim executed by an officer of Purchaser or Parent, as applicable (a “Notice
of Claim”), and delivered to Parent or Purchaser, as applicable (such
receiving party, the “Indemnitor”), promptly after such Indemnitee
becomes aware of the existence of any potential claim by such Indemnitee for
indemnification under this Article VIII (but in any event not later
than the Survival Date, in the case of a Claim relating to a Limited-Liability
Item) arising out of or resulting from:  (i) any
item subject to indemnification pursuant to the terms of Section 8.1
or Section 8.2; or (ii) the assertion, whether orally or in
writing, against any Indemnitee of a claim, demand, suit, action, arbitration,
investigation, inquiry or proceeding brought by a third party against any
Indemnitee (in each such case, a “Third-Party Claim”) that arises out of
or results from any item subject to indemnification pursuant to the terms of Section
8.1 or Section 8.2; provided that no failure or delay in the
giving of such notice (so long as such notice is given not later than the
Survival Date, in the case of a Claim relating to a Limited-Liability Item)
shall adversely affect the Indemnitee’s rights with respect to such claim,
unless (and then only to the extent that) the Indemnitor is materially
prejudiced by such failure or delay.

 

(b)         Each
Notice of Claim by an Indemnitee shall contain the following information:

 

(i)                                     that
Indemnitee has incurred or paid or, in good faith, believes it shall have to
incur or pay, Damages in an aggregate stated amount (where practicable) arising
from such Claim (which amount may be the amount of damages claimed by a third
party in an action brought against any Indemnitee based on alleged facts, that
if true, would give rise to liability for Damages to such Indemnitee under this
Article VIII); and

 

(ii)                                  a
brief description, in reasonable detail (to the extent reasonably available to
Indemnitee), of the facts, circumstances or events giving rise to the alleged
Damages based on Indemnitee’s good faith belief thereof, including the identity
and address of any third-party claimant (to the extent reasonably available to
Indemnitee).  Following delivery of the
Notice of Claim (or at the same time if the Indemnitee so elects) the
Indemnitee shall deliver copies of any demand or complaint, the amount of
Damages, the date each such item was incurred or paid, or the basis for such
anticipated liability, and the specific nature of the breach to which such item
is related.

 

SECTION 8.4.                                          Defense
of Third-Party Claims.

 

(a)          Subject
to the provisions hereof, the Indemnitor on behalf of the Indemnitee shall have
the right to elect to defend any Third-Party Claim, and the costs and expenses
incurred by 

 

45

 

the Indemnitor in
connection with such defense by the Indemnitor (including attorneys’ fees, other
professionals’ and experts’ fees and court or arbitration costs) shall be paid
by the Indemnitor; provided that Sellers shall be deemed to have elected
to defend the High Point Litigation.  If
the Indemnitor so elects, then the Indemnitee may participate, through counsel
of its own choice and at its own expense, in the defense of such Third-Party
Claim.

 

(b)         Indemnitee
shall give prompt written notice of any Third-Party Claim to the Indemnitor; provided
that (so long as such notice is given on or prior to the Survival Date, in the
case of a Claim relating to a Limited-Indemnity Item) the failure timely to
give such notice shall not limit or reduce the Indemnitee’s right to indemnity
hereunder unless (and then only to the extent that) the Indemnitor is prejudiced
thereby.  The Indemnitor shall be
entitled to assume the defense thereof utilizing legal counsel reasonably
acceptable to the Indemnitee; provided that the Indemnitor shall not be
entitled to assume control of such defense and shall pay the fees and expenses
of counsel retained by the Indemnitee if the claim for indemnification relates
to or arises in connection with any criminal proceeding, action, indictment,
allegation or investigation.

 

(c)          If
the Indemnitor has the right to and does elect to defend any Third-Party Claim,
the Indemnitor shall, at the Indemnitee’s request, permit the Indemnitee and
its counsel to confer on the conduct of the defense thereof.  Purchaser and Sellers shall make available to
each other and each other’s counsel and accountants, without charge, all of its
or their books and records relating to the Third-Party Claim, and each party
will render to the other party such assistance as may be reasonably required in
order to insure the proper and adequate defense thereof and shall furnish such
records, information and testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested by the
other party in connection therewith.

 

(d)         If
the Indemnitor has the right to and does elect to defend any Third-Party Claim,
the Indemnitor shall have the right to enter into any settlement of a
Third-Party Claim without the consent of the Indemnitee; provided that (i) such
settlement does not involve any injunctive or other equitable relief binding
upon the Indemnitee or any of its Affiliates, and (ii) such settlement
expressly and unconditionally releases the Indemnitee from all liability with
respect to such claim, without prejudice, other than the obligation to pay any
amount that the Indemnitor pays or causes to be paid.

 

SECTION 8.5.                                          Resolution
of Notice of Claim.

 

Each Notice of Claim given by an Indemnitee shall be
resolved as follows:

 

(a)          Admitted
Claims.  If, within 20 Business Days
after a Notice of Claim is delivered to the Indemnitor, the Indemnitor agrees
in writing that liability for such Claim is indemnified under Section 8.1
or Section 8.2, as applicable, the full amount of the Damages
specified in the Notice of Claim is agreed to, and that such Notice of Claim is
timely, the Indemnitor shall be conclusively deemed to have consented to the
recovery by the Indemnitee of the full amount of Damages specified in the
Notice of Claim in accordance with this Article VIII.

 

46

 

(b)         Contested
Claims.  If the Indemnitor does not
agree in writing to such Notice of Claim or gives the other party written
notice contesting all or any portion of a Notice of Claim (a “Contested
Claim”) within the 20 Business Day period specified in Section 8.5(a),
then such Contested Claim shall be resolved by either (i) a written
settlement agreement executed by Purchaser and Sellers or (ii) in the
absence of such a written settlement agreement within 45 days of such notice or
such longer period as is mutually agreed upon by the parties, by binding
arbitration between Purchaser and Sellers in accordance with the provisions of
this Section 8.5.

 

(c)          Arbitration
of Contested Claims.  Any Contested
Claim that is not settled by the parties as set forth in Section 8.5(b)
shall be submitted to mandatory, final and binding arbitration before
J.A.M.S./ENDISPUTE or its successor (“J.A.M.S.”) pursuant to the United
States Arbitration Act, 9 U.S.C., Section 1 et seq., and that any such
arbitration shall be conducted in Delaware. 
If J.A.M.S. ceases to provide arbitration service, then the term “J.A.M.S.”
shall thereafter mean and refer to the American Arbitration Association (“AAA”).  Either Purchaser or Parent may commence the
arbitration process called for by this Agreement by filing a written demand for
arbitration with J.A.M.S. and giving a copy of such demand to each of the other
party to this Agreement.  The arbitration
shall be conducted in accordance with the provisions of J.A.M.S’ Streamlined
Arbitration Rules and Procedures in effect at the time of filing of the
demand for arbitration (or, if J.A.M.S. then means the AAA, the commercial
arbitration rules of the AAA then in effect), subject to the provisions of
this Section 8.5(c).  The
parties shall cooperate with J.A.M.S. and with each other in promptly selecting
an arbitrator from J.A.M.S.’ panel of neutrals and in scheduling the
arbitration proceedings in order to fulfill the provisions, purposes and intent
of this Agreement.  The parties covenant
that they shall participate in the arbitration in good faith and that they
shall share in its costs in accordance with this Agreement.  The provisions of this Section 8.5(c) may
be enforced by any court of competent jurisdiction, and the party seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys’ fees, to be paid by the party against whom enforcement is
ordered.  Judgment upon the award
rendered by the arbitrator may be entered in any court having competent
jurisdiction.

 

(d)         Payment
of Costs.  Purchaser, on the one
hand, and Sellers, on the other hand, shall each bear one-half of the expense
of deposits and advances required by the arbitrator, but any party may advance
such amounts, subject to recovery as an addition or offset to any award.  For the avoidance of doubt, the monetary
recovery owed to the prevailing party or parties to the arbitration proceeding
shall include reimbursement of such advances.

 

(e)          Burden
of Proof.  Except as may be otherwise
expressly provided herein, for any Contested Claim submitted to arbitration,
the burden of proof shall be as it would be if the claim were litigated in a
judicial proceeding governed exclusively by the internal Laws of the State of
Delaware applicable to contracts executed and entered into within the State of
Delaware, without regard to the principles of choice of law or conflicts of law
of any jurisdiction.

 

(f)            Award.  Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator shall render findings of fact and
conclusions of law and a final written arbitration award setting forth the
basis and reasons for any decision reached (the “Final Award”) and shall
deliver such documents to Sellers and Purchaser, together with a signed copy of
the Final Award.  Subject to the
provisions of this Agreement, the Final Award shall constitute a conclusive
determination of 

 

47

 

all issues in question,
binding upon Sellers and Purchaser, and shall include an affirmative statement
to such effect.

 

(g)         Timing.  Sellers, Purchaser and the arbitrator shall
conclude each arbitration pursuant to this Section 8.5 as promptly
as possible for the Contested Claim being arbitrated.

 

(h)         Terms
of Arbitration.  The arbitrator
chosen in accordance with these provisions shall not have the power to alter,
amend or otherwise affect the terms of these arbitration provisions or the
provisions of this Agreement.

 

(i)             Exclusive
Remedy.  Following the Closing,
except as specifically otherwise provided in this Agreement, arbitration
conducted in accordance with this Agreement shall be the sole and exclusive
remedy of the parties for any Contested Claim made pursuant to this Article VIII;
provided that this sentence shall not be deemed a waiver by any party of
its right to seek specific performance or injunctive relief in the case of
another party’s failure to comply with the covenants made by such other party.

 

SECTION 8.6.                                          Survival
of Covenants, Representations and Warranties.

 

All representations and warranties of Sellers
contained in this Agreement, as qualified by the Schedules hereto as updated
from time to time in accordance with the terms of this Agreement, shall remain
operative and in full force and effect until that date that is the earlier of (i) the
termination of this Agreement in accordance with Article IX, and (ii) the
Survival Date; provided, however, that if the Closing occurs and
a claim or proceeding with respect to breach of any such representation or
warranty has been instituted prior to the Survival Date, such representation or
warranty shall survive for purposes of such claim until there has been a final
determination with respect to such claim or proceeding.  All representations and warranties of
Purchaser set forth in this Agreement shall remain operative and in full force
and effect until that date that is the earlier of (i) the termination of
this Agreement in accordance with Article IX and (ii) the
Survival Date; provided, however, that if the Closing occurs and
a claim or proceeding with respect to breach of any such representation or
warranty has been instituted prior to the Survival Date, such representation or
warranty shall survive for purposes of such claim until there has been a final
determination with respect to such claim or proceeding.  All covenants of the parties shall survive
according to their respective terms.

 

SECTION 8.7.                                          Exclusive Remedy; Non-Recourse.

 

(a)    After
the Closing, the indemnification rights set forth in this Article VIII
are and shall be the sole and exclusive remedies of Purchaser, the other
Seller-Indemnified Persons, Sellers and the other Purchaser-Indemnified Persons
with respect to this Agreement and the Transactions contemplated hereby.

 

(b)   Purchaser,
for itself, its successors and assigns including the other Seller-Indemnified
Persons, acknowledges and agrees that this Agreement and the transactions
contemplated hereby are non-recourse as to any Seller or any other
Purchaser-Indemnified Person and that they shall have no recourse against any
Seller or any other 

 

48

 

Purchaser-Indemnified
Person for or on account of any matter, cause, claim or thing of or relating to
this Agreement or the Transactions, other than as expressly provided in this Article VIII.

 

(c)    In
furtherance of the foregoing, Purchaser for itself, its successors and assigns,
and the other Seller-Indemnified Persons, covenant and agree that neither
Purchaser nor any other Seller-Indemnified Person shall sue or initiate or
maintain any action, suit or cause of action against any Seller or any other
Purchaser-Indemnified Person as a result of this Agreement or the Transactions,
except as expressly provided hereunder.

 

(d)   Notwithstanding
the foregoing, this Section 8.7 shall not be deemed a waiver by any
party of its right to seek specific performance or injunctive relief in the
case of another party’s failure to comply with the covenants made by such other
party to be performed after the Closing, or any remedy of any party in respect
of any fraud committed by any other party. 
In addition, the parties agree that the limitations set forth in this Article VIII
shall not apply to any fraud or willful breach of any covenant committed by any
party.

 

(e)    The
provisions of Article VIII were specifically bargained for and
reflected in the amounts payable to Sellers in connection with the Transactions
pursuant to Section 1.3.

 

ARTICLE
IX

TERMINATION, AMENDMENT AND WAIVER

 

SECTION 9.1.                                          Termination.

 

This Agreement may be terminated at any time prior to
the Closing:

 

(a)          by
written consent of each of Purchaser and Parent;

 

(b)         by
Purchaser if (i) any Seller shall have breached, or failed to comply with,
in any material respect any of its obligations under this Agreement or (ii) any
representation or warranty made by any Seller shall have been incorrect in any
material respect when made or shall have since ceased to be true and correct in
any material respect, and such breach, failure or misrepresentation is not
cured within twenty (20) days after written notice thereof is delivered to the
breaching party and either (x) such breaches, failures or
misrepresentations render the closing conditions of the non-breaching party
incapable of being satisfied or (y) such breach or failure is a failure or
refusal to consummate the Transactions as required pursuant to Section 1.2
(provided that, in the case of any action or inaction described in this
clause (y), the 20-day period described in clause (ii) above shall instead
be a two (2) Business Day period);

 

(c)          by
Sellers if (i) Purchaser shall have breached, or failed to comply with, in
any material respect any of its obligations under this Agreement or (ii) any
representation or warranty made by Purchaser shall have been incorrect in any
material respect when made or shall have since ceased to be true and correct in
any material respect, and such breach, failure or misrepresentation is not
cured within twenty (20) days after written notice thereof is delivered to the
breaching party and either (x) such breaches, failures or
misrepresentations render the closing conditions of the non-breaching party
incapable of being satisfied or (y) such breach or failure is a failure or
refusal to consummate the Transactions as required pursuant to Section 1.2

 

49

 

(provided that, in
the case of any action or inaction described in this clause (y), the 20-day
period described in clause (ii) above shall instead be a two (2) Business
Day period);

 

(d)         by
Sellers or Purchaser if any decree, permanent injunction, judgment, order or
other action by any court of competent jurisdiction or any Governmental Entity
preventing or prohibiting consummation of the Transactions shall have become
final and nonappealable; provided that no party may terminate this
Agreement pursuant to this Section 9.1(d) unless such party
has used commercially reasonable efforts to oppose any such decree, permanent
injunction, judgment, order or other action or to have any of the foregoing
vacated or made inapplicable to the transactions contemplated by this
Agreement, and has complied with its obligations under Section 6.3;

 

(e)          by
Sellers or Purchaser if the Transactions shall not have been consummated on or
before July 14, 2008 (the “Termination Date”); provided that
the right to terminate this Agreement under this Section 9.1(e) shall
not be available to any party if such party’s failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before the Termination Date; or

 

(f)            by
Sellers or Purchaser, as provided in Section 6.8.

 

A party seeking to terminate this Agreement in
accordance with this Section 9.1 shall deliver written notice
thereof as provided under Section 10.1.  Notwithstanding the provisions of Section 9.1(c),
Section 9.1(d) or Section 9.1(e), Sellers may not
terminate this Agreement (other than pursuant the Section 9.1(f))
if any Seller is in material violation or breach of a representation, warranty,
covenant or agreement set forth in this Agreement. Notwithstanding the
provisions of Section 9.1(b), Section 9.1(d) or Section 9.1(e),
Purchaser may not terminate this Agreement (other than pursuant the Section 9.1(f))
if Purchaser is in material violation or breach of a representation, warranty,
covenant or agreement set forth in this Agreement.

 

SECTION 9.2.                                          Effect
of Termination.

 

(a)          If
this Agreement is terminated under Section 9.1(a), Section 9.1(d) or
Section 9.1(e) at a time when no party is in material
violation or breach of a representation, warranty, covenant or agreement then
all further liabilities and obligations of Sellers to Purchaser and Purchaser
and of Purchaser to Sellers will terminate without further liability of any
party hereto.

 

(b)         If
this Agreement is terminated under Section 9.1 (other than under Section 9.1(a))
at a time when a party is in material violation or breach of a representation,
warranty, covenant or agreement, then the liabilities and obligations of the
party not in such violation or breach shall terminate and the party or parties
that are in violation or breach of this Agreement shall remain liable therefor
and nothing in this Agreement shall be deemed to limit the remedies available
against such party.  Notwithstanding the
foregoing, Sellers will only be liable for its willful breach of any covenant
or fraud.

 

(c)          If
the Agreement is terminated as provided in Section 9.1, the parties
shall use commercially reasonable efforts to cause, to the extent practicable,
all filings, applications and other submissions made pursuant to this Agreement
to be withdrawn from the agency or other Person to which they were made.

 

50

 

ARTICLE
X

GENERAL PROVISIONS

 

SECTION 10.1.                                   Notices.

 

All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally or Federal Express (or other reputable overnight
courier), mailed by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like changes of address) or sent
by electronic transmission to the telecopier number specified below:

 

	
  (a) If to any Seller:

  
	
   

  
	
   

  	
  c/o ABRY Partners, LLC

  
	
   

  	
  111 Huntington Avenue, 30th Floor

  
	
   

  	
  Boston, MA 02199

  
	
   

  	
  Fax No.: (617) 859-7205

  
	
   

  	
  Attention: Jay Grossman

  
	
   

  	
   

  
	
   

  	
  With a copy (which shall not constitute notice) to:

  
	
   

  	
   

  
	
   

  	
  Kirkland & Ellis LLP

  
	
   

  	
  Citigroup Center

  
	
   

  	
  153 E. 53rd Street

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Fax No.: (212) 446-4900

  
	
   

  	
  Attention: John L. Kuehn, Esq.

  
	
   

  	
   

  
	
  (b) If to Purchaser:

  
	
   

  
	
   

  	
  Regal Cinemas, Inc.

  
	
   

  	
  7132 Regal Lane

  
	
   

  	
  Knoxville, TN 37918

  
	
   

  	
  Fax No.: (865) 922-6085

  
	
   

  	
  Attention: Chief Executive Officer and General
  Counsel

  
	
   

  	
   

  
	
   

  	
  With a copy (which shall not constitute notice) to:

  
	
   

  	
   

  
	
   

  	
  Hogan & Hartson L.L.P.

  
	
   

  	
  1200 17th Street, Suite 1500

  
	
   

  	
  Denver, CO 80202

  
	
   

  	
  Fax No.: (303) 899-7333

  
	
   

  	
  Attention: Richard J. Mattera

  

 

51

 

SECTION 10.2.                                   Certain
Definitions.

 

For purposes of this Agreement, the term:

 

(a)          “Acquisition
Proposal” means any offer, proposal or indication of interest relating to (i) the
acquisition of any or all of the Companies by, (ii) a merger,
consolidation or other business combination involving any or all of the
Companies with, or (iii) any sale of securities or substantial assets of
the Companies, or any or all of the Options, to, any Person other than
Purchaser or an Affiliate or assignee thereof.

 

(b)         “Affiliate”
means a Person that directly or indirectly, through one or more intermediaries,
Controls, is controlled by, or is under common control with, the first
mentioned Person.

 

(c)          “Antitrust
Laws” means any applicable U.S. or foreign competition, antitrust, merger
control or investment Laws, including the HSR Act.

 

(d)         “Bank
Facility” means that certain Amended and Restated Loan Agreement among the
Partnership, the financial institutions whose names appear as Lenders on the
signature pages thereof and CIT Lending Services Corporation (Illinois),
as Agent for the Lenders, dated as of June 5, 2006, as the same may be
amended from time to time.

 

(e)          “Business
Day” shall mean any day other than a day on which banks in the Commonwealth
of Massachusetts or the State of New York are authorized or obligated to be
closed.

 

(f)            “Closing
Cash” means the amount of cash and cash equivalents of the Companies,
determined on a consolidated basis as of the Adjustment Time (but without
giving effect to any action by Purchaser or any of its Affiliates, including
the Companies, after the Closing) in accordance with Section 1.5(e).

 

(g)         “Closing
Indebtedness” means, without duplication, and subject to Section 1.5(e):  (i) all liabilities of the Companies for
Taxes arising prior to the Closing Date, (ii) all indebtedness of the
Companies for borrowed money (including all principal, interest, premiums,
penalties, and breakage fees), excluding amounts payable in respect of the Bank
Facility, which shall be paid in full at Closing pursuant to Section 7.2(g),
(iii) all obligations of the Companies evidenced by notes, bonds,
debentures or similar instruments or pursuant to any guaranty, and (iv) all
monetary obligations of the Companies under capital leases or for deferred
purchase price of property or services (it being agreed by the parties that,
for purposes of this Agreement, no Lease will be deemed to be a capital lease),
in each case exclusive of deferred revenue, deferred rent obligations and the
portion(s) of any of the foregoing included in determining the current
liabilities that are reflected in the Closing Working Capital, determined as of
the Adjustment Time in accordance with Section 1.5(e).  Notwithstanding the foregoing Closing
Indebtedness shall not include any liability in respect of any amount alleged
in the High Point Litigation to be payable by any Company, whether or not a
Final Judgment (as defined in Section 10.2(h) below) exists in
respect thereof.

 

52

 

(h)   “Closing
Working Capital” means the aggregate amount of the current assets of
Companies (excluding Closing Cash and excluding deferred tax benefits) less the
aggregate amount of the current liabilities of the Companies (exclusive of
deferred rent obligations, deferred tax liabilities and all amounts payable in
respect of the Bank Facility), in each case determined as of the Adjustment
Time after giving effect to the
Transactions (but without giving effect to any action by Purchaser or any of
its Affiliates, including the Companies, after the Closing) and in accordance
with Section 1.5(e) ; provided that, if Purchaser has the
right to terminate this Agreement pursuant to Section 6.8 prior to
the Closing and does not do so, then the aggregate amount of Limited 6.8
Liabilities that will be included as current liabilities for purposes of
computing of the Closing Working Capital shall not be greater than the sum of (x) the amount (if any) by
which the Closing Working Capital (determined without taking into account any
Limited 6.8 Liabilities) exceeds negative $8,500,000 plus (y) the amount (if any) by which $12,000,000
exceeds the aggregate amount (if any) of Damages with respect to
Limited-Indemnity Items for which the Seller-Indemnified Persons have been indemnified
pursuant to Section 8.1 prior to the date upon which the Final
Purchase Price is determined.  For example, if the amount of the Closing
Working Capital (determined without taking into account any Limited 6.8
Liabilities) were negative $5,500,000 and the aggregate amount of Damages with
respect to Limited-Indemnity Items for which the Seller-Indemnified Persons are
indemnified pursuant to Section 8.1 prior to the date upon which
the Final Purchase Price is determined were $1,000,000, then the amounts
described in clauses (x) and (y) above would be $3,000,000 and
$11,000,000, respectively, and the maximum aggregate amount of Limited 6.8
Liabilities that could be included as current liabilities for purposes of
computing of the Closing Working Capital would be $14,000,000.  The amount of the Closing Working Capital
will be determined in light of the facts and circumstances existing as of the
Closing Date and (except as provided in the preceding proviso with respect to
indemnified liabilities) without reference to events or circumstances occurring
or arising after the Closing Date. 
Notwithstanding the foregoing Closing Working Capital shall not include (i) any
liability in respect of any amount alleged in the High Point Litigation to be
payable by the Companies, except to the extent of any amount payable by the
Companies as of the Adjustment Time pursuant to the terms of any judgment that
as of the Adjustment Time has become final and is not then subject to any
appeal that is pending or that may be made, or any written settlement agreement
entered into by any of the Companies (in either case, a “Final Judgment”);
or (ii) any amount alleged in the Kingstowne Litigation to be payable to
any Company, except to the extent of any amount payable to any Company as of
the Adjustment Time pursuant to the terms of any Final Judgment.

 

(i)    “Closing
Working Capital Adjustment” means the amount (if any) by which Closing
Working Capital is less than negative $8,500,000.

 

(j)    “Code”
means the Internal Revenue Code of 1986, as amended.

 

(k)   “Commonwealth
20 Landlord” means Movie (VA) QRS 14-24, Inc, a Delaware corporation.

 

(l)    “Commonwealth
20 Landlord Agreement” means the Agreement Regarding Lease dated as of January 14,
2008 among the Commonwealth 20 Landlord, Richmond I Cinema, 

 

53

 

L.L.C., a Delaware limited liability company, Purchaser, Parent and
Corporate Property Associates 14 Incorporated, as in effect from time to time.

 

(m)  “Company
Material Adverse Effect” means any effect or change that would be
materially adverse to the business, properties, assets, liabilities, financial
condition or results of operations of the Companies, taken as a whole, or on
the ability of Sellers to consummate timely the Transactions or perform any of
its other obligations under this Agreement or any Related Agreement; provided
that none of the following shall be deemed to constitute, or shall be taken
into account in determining whether there has been or may be, a Company
Material Adverse Effect: (i) any adverse change, event, development or
effect arising from or relating to (A) general business or economic
conditions (including those in one or more of the geographic markets in which
the Companies conduct business), including such conditions related to the
business of the Companies, (B) national or international political or
social conditions, including the engagement by the United States 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, (C) financial, banking, or securities markets (including any
disruption thereof and any decline in the price of any security or any market
index), (D) changes in GAAP, (E) changes in Law, rules, regulations,
orders, or other binding directives issued by any Governmental Entity, or (F) the
execution or announcement of this Agreement or the taking of any action
contemplated by this Agreement, unless in the case of clauses (A), (B), (C), (D) and
(E), such change, event, development or effect has had a disproportionate
effect on the Companies as compared to other Persons in the industry in which
the Companies operate, and (ii) any adverse change in or effect on the
business of the Companies that is cured before the earlier of (A) the
Closing Date and (B) the date on which this Agreement is terminated
pursuant to Article IX.

 

(n)   “Control”
(including the terms “controlled by” and “under common control with”)
means the possession, directly or indirectly or as trustee or executor, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock or as trustee or executor, by
contract or credit arrangement or otherwise.

 

(o)   “Divestiture”
means (i) any sale, transfer, separate holding, divestiture or other
disposition, or any prohibition of, or any limitation on, the acquisition,
ownership, operation, effective control or exercise of full rights of
ownership, of any asset(s) or business(es) of any Company, Purchaser or
any of Purchaser’s Affiliates or (ii) the termination or amendment of any
existing or contemplated governance structure or contractual or governance
rights of any Company, Purchaser or any of Purchaser’s Affiliates.

 

(p)   “Encumbrances”
means liens, security interests, charges, mortgages, claims, restrictions,
pledges and encumbrances of any nature whatsoever.  For the avoidance of doubt, “Encumbrance”
shall not be deemed to include any license of Intellectual Property entered
into in the ordinary course of business.

 

(q)   “Enterprise
Value” means $210,000,000, increased by the amount of the Closing Cash, and
decreased by the amount (if any) of the Closing Working Capital Adjustment.

 

54

 

(r)    “Environmental
Law” means any Law or Order of any Governmental Entity relating to the
protection of human health or the environment (including air, water, soil, and
natural resources) or the generation, use, storage, transport, handling, Release,
exposure to or disposal of any Hazardous Substance, noise, odor, or radiation
as in effect on or prior to the date hereof.

 

(s)   “Equity
Securities” of any Person means capital stock or partnership, membership or
other ownership interest in or of such Person, or any other securities or
similar rights with respect to such Person (including securities directly or
indirectly convertible into or exchangeable or exercisable for any such stock
or interest, any phantom stock or stock appreciation right, or options,
warrants, calls, commitments or rights of any kind to acquire any such stock or
interest).

 

(t)    “Escrow
Account” means the account established by the Escrow Agent pursuant to the
Escrow Agreement.

 

(u)   “Escrow
Agent” means a financial institution reasonably acceptable to and mutually
agreed upon by Parent and Purchaser.

 

(v)   “Escrow
Amount” means the amount deposited at the Closing in the Escrow Account
with the Escrow Agent pursuant to the terms and conditions of the Escrow
Agreement, which shall be $12,000,000.00.

 

(w)  “Estimated
Purchase Price” means an amount equal to the Option Exercise Price plus
the Estimated Option Purchase Price.

 

(x)    “Escrow
Agreement” means the Escrow Agreement to be dated as of the Closing Date by
and among Sellers, Purchaser and the Escrow Agent, in substantially the form as
set forth in Exhibit F attached hereto, as the same may be amended,
modified or waived from time to time.

 

(y)   “Governmental
Entity” means any national, federal, state, provincial, county, municipal
or local government, foreign or domestic, or any political subdivision thereof
or any court, administrative or regulatory agency, department, instrumentality,
body or commission or other governmental authority or agency, domestic or
foreign.

 

(z)    “Hazardous
Substance” means any substance, material or waste that is hazardous, toxic
or radioactive, and also includes petroleum and any derivative or by products
thereof, and any other environmental contaminant, pollutant, waste, or
pesticide and any material listed, regulated or defined under any Environmental
Law.

 

(aa) “Intellectual
Property” means all intellectual property and proprietary rights including
all (i) patents, patent applications, patent disclosures and inventions,
whether foreign or domestic, including all reissues, continuations, divisions,
continuations in part and extensions thereof, (ii) internet domain names,
trademarks, service marks, trade dress, trade names, slogans, logos and
corporate names and registrations and applications for registration thereof
together with all goodwill symbolized by the foregoing, (iii) copyrightable
works and registrations and applications for registration thereof, (iv) computer
software (including both 

 

55

 

source and object code), and (v) trade secret rights, product
plans, technology, drawings, process engineering, know-how, and confidential
information.

 

(bb) “High
Point Litigation” means the action presently captioned “Majestic Cinema Holdings, LLC vs. High Point Cinema,
LLC d/b/a Consolidated Theatres” (File No. 06 CVS 1014),
pending in the Superior Court Division in the county of Guilford, North
Carolina, and any direct or indirect appeal relating thereto.

 

(cc) “IRS”
means the Internal Revenue Service.

 

(dd) “Kingstowne
Litigation” means the actions presently captioned “Kingstowne Movie Theater LP v. Kingstowne Cinema, LLC”
(Case No. 2007 1778) and “Kingstowne
Cinema, L.L.C. v. Kingstowne Movie Theater, LP” (Case No. 2007-2258),
pending in the Circuit Court of Fairfax County, Virginia, and any direct or
indirect appeal relating thereto.

 

(ee) “Knowledge”
(a) of Sellers means the actual knowledge or conscious awareness of Casey
Brock, Chuck Latham, Herman Stone or Dale Coleman after reasonable inquiry of
the headquarters employees of Sellers or the Companies, and (b) of
Purchaser means the actual knowledge or conscious awareness of Michael
Campbell, Gregory Dunn or Amy Miles after reasonable inquiry of the officers,
directors and employees of Purchaser.

 

(ff)   “Landlord
Approval” means any consent, approval or waiver required by the express
terms of any Lease identified on Schedule 2.3 to be obtained from the
landlord thereunder with respect to the transfer or change in control of any
Company to Purchaser that will result from the consummation of the
Transactions.

 

(gg) “Laws”
means all foreign, federal, state and local statutes, laws, ordinances,
regulations, rules, resolutions, orders, determinations, writs, injunctions,
common law rulings, awards (including awards of any arbitrator), judgments,
decrees, and any requirements imposed pursuant to any permit, license or
authorization issued by a Governmental Entity.

 

(hh) “Limited
6.8 Liability” means any actual or anticipated Damages of the Companies
(including for the purposes of definition, consequential damages, lost profits,
indirect damages, punitive damages and exemplary damages) arising out of or
anticipated to arise out of matters disclosed in notifications or supplements
delivered by Sellers pursuant to Section 6.8(a), but only (a) to
the extent such Damages relate to or arise from Limited-Indemnity Items, and (b) if
Purchaser had the right to, but did not, terminate this Agreement pursuant to Section 6.8.

 

(ii)   “Order”
means any injunction, judgment, ruling, assessment, order or decree of any
Governmental Entity or arbitrator having competent jurisdiction.

 

(jj)   “Permitted
Encumbrances” means (i) Encumbrances related to statutory liens
securing real property Tax or assessment payments not yet due and payable, (ii) Encumbrances
arising pursuant to or securing Closing Indebtedness, (iii) Encumbrances
not related to indebtedness for borrowed money that do not, individually or in
the aggregate, materially interfere with the use, occupancy or operation of the
real property leased by the Companies, (iv) statutory Encumbrances
incurred or deposits made in the ordinary course of business in 

 

56

 

connection with workers’ compensation, employment insurance and other
social security legislation, and (v) any Encumbrance arising as a result
of this Agreement.

 

(kk)   “Person”
means an individual, corporation, partnership, association, trust,
unincorporated organization, other entity or group.

 

(ll)     “Related
Agreement” means the Escrow Agreement and any other document or instrument
executed in connection with this Agreement or the Transactions.

 

(mm) “Release” means any presence, emission,
spill, seepage, leak, escape, leaching, discharge, injection, pumping, pouring,
emptying, dumping, disposal, migration, or release of Hazardous Substances from
any source into or upon the environment.

 

(nn)   “Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any Subsidiary) (i) owns, directly or
indirectly, fifty percent (50%) or more of the stock, limited liability company
interests, partnership interests or other equity interests the holders of which
are generally entitled to vote for the election of the board of directors or
other governing body of such corporation, limited liability company,
partnership, joint venture or other legal entity; or (ii) possesses,
directly or indirectly, Control over the direction of management or policies of
such corporation, limited liability company, partnership, joint venture or
other legal entity (whether through ownership of voting securities, by
agreement or otherwise).

 

(oo)   “Survival
Date” means March 31, 2009.

 

(pp)   “Tax”
means (i) any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code §59A), customs
duty, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
escheat or abandoned property, use, transfer, transaction, registration, value
added, alternative or add-on minimum, estimated or other tax, duties, charges
or levies of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not, (ii) any liability for an amount
described in (i) by reason of being a member of any combined,
consolidated, affiliated, unitary or other group and (iii) any liability
for an amount described in (i) or (ii) by contract, as a successor in
interest or otherwise.

 

(qq)   “Tax
Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

 

(rr)     “Theatre
Level Cash Flow” for any theatre for any period means the net income of
such theatre for such period plus, to the extent deducted in determining such
net income, and without duplication, net interest expense, Taxes relating to
income, depreciation, amortization, provision for straight-line rent and
allocations of corporate overhead, all determined in accordance with GAAP and
in good faith from (i) the accounting records of the Companies and in a
manner consistent with their past practices, if such theatre is operated by one
or more of the Companies, or (ii) the accounting records of Purchaser and
its Affiliates and in a manner 

 

57

 

consistent with their past practices, if such theatre is operated by
one or more of Purchaser and its Affiliates.

 

SECTION 10.3.            Headings; Interpretation.

 

The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  As all
parties to this Agreement have participated in the drafting of this Agreement,
no ambiguity shall be construed against any party as the drafter.  In this Agreement, unless a clear contrary
intention appears (i) the singular number includes the plural number and
vice versa; (ii) reference to any Person includes such Person’s successors
and assigns but, if applicable, only if such successors and assigns are not
prohibited by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually; (iii) reference
to any agreement, document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in accordance
with the terms thereof; (iv) reference to any Law means such Law as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated
thereunder, and reference to any section or other provision of any Law means
that provision of such Legal Requirement from time to time in effect and
constituting the substantive amendment, modification, codification, replacement
or reenactment of such section or other provision; (v) “hereunder,” “hereof,”
“hereto,” and words of similar import shall be deemed references to this
Agreement as a whole and not to any particular Article, Section or other
provision hereof; (vi) “including” (and with correlative meaning “include”)
means including without limiting the generality of any description preceding
such term; (vii) references to “$” shall be references to United States
dollars; and (viii) references to documents, instruments or agreements
shall be deemed to refer as well to all addenda, exhibits, schedules or
amendments thereto.

 

SECTION 10.4.            Severability.

 

If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.

 

SECTION 10.5.            Entire Agreement.

 

This Agreement (together with the Exhibits, Schedules
and the other documents delivered pursuant hereto or contemporaneously
herewith) and the Confidentiality Agreement constitute the entire agreement of
the parties and supersede all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof and, except as otherwise expressly provided herein, are not
intended to confer upon any other Person any rights or remedies hereunder.

 

58

 

SECTION 10.6.    Assignment.

 

Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto
(whether by operation of law or otherwise) without the prior written consent of
the other party.  Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.

 

SECTION 10.7.    Third
Party Beneficiaries.

 

This Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement
except for the Indemnified Parties under Article VIII.

 

SECTION 10.8.    Expenses.

 

Except as otherwise expressly provided herein, all
expenses incurred by the parties hereto shall be borne solely by the party that
has incurred such expenses.  For the
avoidance of doubt, all fees and expenses payable to UBS Securities, LLC as a
result of the Transactions will be payable by Sellers.

 

SECTION 10.9.    Specific
Performance.

 

Each party agrees that irreparable damage would occur
and that the parties would not have any adequate remedy at law in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed that each of the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any Federal court located in the State of Delaware or in
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity.

 

SECTION 10.10. Amendments; Waiver.

 

No amendment of any provision of this Agreement shall
be effective, unless the same shall be in writing and signed by Purchaser and
Parent.  Except as otherwise expressly
set forth herein, any failure of a party to comply with any provision hereof
may only be waived in a writing executed by the other party.  No such waiver shall operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.  No failure by any party to take any action
against any breach of this Agreement or default by any other party shall
constitute a waiver of such party’s right to enforce any provision hereof or to
take any such action.

 

SECTION 10.11. Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.

 

(a)   Governing
Law; Consent to Jurisdiction.  THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE 

 

59

 

GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.  SUBJECT TO SECTION 8.5, EACH
PARTY HERETO, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, IRREVOCABLY AGREES
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE INSTITUTED IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF DELAWARE, UNITED STATES OF AMERICA OR IN THE ABSENCE OF
JURISDICTION, THE STATE COURTS LOCATED IN WILMINGTON, DELAWARE, AND GENERALLY
AND UNCONDITIONALLY ACCEPTS AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE IN CONNECTION WITH THIS AGREEMENT. 
EACH PARTY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, IRREVOCABLY
WAIVES ANY OBJECTION IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION BASED ON THE GROUNDS OF FORUM NON CONVENIENS, IN THE AFORESAID
COURTS.  EACH OF THE PARTIES, FOR ITSELF
AND ITS SUCCESSORS AND ASSIGNS, IRREVOCABLY AGREES THAT ALL PROCESS IN ANY SUCH
PROCEEDINGS IN ANY SUCH COURT MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SECTION 10.1 OR
AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY SHALL HAVE BEEN NOTIFIED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 10.1, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY THE PARTIES TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT.  NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

(b)   WAIVER
OF JURY TRIAL.  TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO HEREBY
WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE
OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE)
INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT
OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING.  EACH
PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTY HERETO
THAT THIS 10.11(b) CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE
RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT.  ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS 10.11(b) WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.

 

60

 

SECTION 10.12.         No Recourse.

 

Notwithstanding anything that may be expressed or
implied in this Agreement, Purchaser agrees and acknowledges that no recourse
under this Agreement or any documents or instruments delivered in connection
with this Agreement shall be had against any current or future direct or
indirect director, officer, employee, general or limited partner or member of
any Seller or of any Affiliate or assignee thereof, as such, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any statute, regulation or other applicable Law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any current or future officer, agent
or employee of Seller or any current or future member of Seller or any current
or future director, officer, employee, partner or member of any Seller or of
any Affiliate or assignee thereof, as such, for any obligation of any Seller
under this Agreement or any documents or instruments delivered in connection
with this Agreement for any claim based on, in respect of or by reason of such
obligations or their creation.

 

SECTION 10.13.         Counterparts.

 

This Agreement may be executed and delivered in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement.  This Agreement and all other
agreements, certificates, instruments and other documents contemplated by this
Agreement may be executed and delivered in counterpart signature pages executed
and delivered via facsimile, pdf or other electronic transmission, and any such
counterpart executed and delivered via facsimile, pdf or other electronic
transmission shall be deemed an original for all intents and purposes.  After the Closing the parties shall
reasonably promptly exchange original versions of this Agreement and all other
agreements, certificates, instruments and other documents contemplated by this
Agreement that were so executed and exchanged by electronic transmission.

 

SECTION 10.14.         Time of Essence.

 

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

 

SECTION 10.15.         Privilege and Related Matters.

 

Purchaser acknowledges that Sellers and the Companies
have been represented by the law firms of Kirkland & Ellis LLP and
Kennedy Covington Lobdell & Hickman, L.L.P. (the “Firms”) in
connection with the transactions contemplated by this Agreement.  The parties agree that, while the
representation by the Firms in such transactions has, in part, nominally been
of the Companies, the true clients have been Parent, certain of its members and
the other Sellers.  As a consequence, the
parties agree that: (i) the holder of the privilege with respect to any
discussions with any client of either Firm relative to such transactions on or
prior the Closing Date will be Sellers and such members and no Company shall
have no rights thereto; and (ii) that none of the parties hereto shall
take any action to attempt to disqualify either Firm from representing any
Seller in connection with any dispute relating to this Agreement, any related
agreement or any 

 

61

 

such transactions based on the representation by such Firm of any
Company in connection therewith on or prior to the Closing Date.

 

*  * 
*  *  *

 

 

[The remainder of this page is intentionally left
blank.]

 

62

 

IN WITNESS WHEREOF, the parties hereto have caused
this Purchase and Sale Agreement to be executed and delivered as of the date
first written above.

 

 

	
   

  	
  CONSOLIDATED
  THEATRES, LLC

  
	
   

  	
  CONSOLIDATED
  THEATRES HOLDINGS, GP

  
	
   

  	
  APEX
  CINEMA HOLDINGS, INC.

  
	
   

  	
  ARBORETUM
  CINEMA HOLDINGS, INC.

  
	
   

  	
  CARY
  CINEMA HOLDINGS, INC.

  
	
   

  	
  CHERRYDALE
  CINEMA HOLDINGS, INC.

  
	
   

  	
  CINEMA
  6 HOLDINGS, INC.

  
	
   

  	
  COLUMBIA
  CINEMA HOLDINGS, INC.

  
	
   

  	
  CONSOLIDATED
  THEATRES MANAGEMENT HOLDINGS, INC.

  
	
   

  	
  GARNER
  CINEMA HOLDINGS, INC.

  
	
   

  	
  GREENSBORO
  I THEATRE HOLDINGS, INC.

  
	
   

  	
  GREENVILLE
  CINEMA HOLDINGS, INC.

  
	
   

  	
  HIGH
  POINT CINEMA HOLDINGS, INC.

  
	
   

  	
  HYATTSVILLE
  CINEMA HOLDINGS, INC.

  
	
   

  	
  KINGSTOWNE
  CINEMA HOLDINGS, INC.

  
	
   

  	
  LOUDOUN
  COUNTY CINEMA HOLDINGS, INC.

  
	
   

  	
  MOUNT
  PLEASANT CINEMA HOLDINGS, INC.

  
	
   

  	
  MT.
  JULIET CINEMA HOLDINGS, INC.

  
	
   

  	
  NEWNAN
  CINEMA HOLDINGS, INC.

  
	
   

  	
  PARK
  CINEMA HOLDINGS, INC.

  
	
   

  	
  PHILLIPS
  PLACE HOLDINGS, INC.

  
	
   

  	
  RALEIGH
  16 HOLDINGS, INC.

  
	
   

  	
  RICHMOND
  I CINEMA HOLDINGS, INC.

  
	
   

  	
  ROANOKE
  CINEMA HOLDINGS, INC.

  
	
   

  	
  ROCK
  HILL CINEMA HOLDINGS, INC.

  
	
   

  	
  SILVER
  SPRING CINEMA HOLDINGS, INC.

  
	
   

  	
  SPARTANBURG
  CINEMA HOLDINGS, INC.

  
	
   

  	
  SUFFOLK
  CINEMA HOLDINGS, INC.

  
	
   

  	
  US 8
  HOLDINGS, INC.

  
	
   

  	
  WILLIAMSBURG
  CINEMA HOLDINGS, INC.

  
	
   

  	
  WILMINGTON
  CINEMA HOLDINGS, INC.

  

 

	
   

  	
    /s/    C.J.
  BRUCATO

  
	
   

  	
  By:

  	
     C.J.
  Brucato

  
	
   

  	
  Title:

  	
   Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REGAL
  CINEMAS, INC.

  
	
   

  	
   

  
	
   

  	
    /s/  MICHAEL
  L. CAMPBELL

  
	
   

  	
  By:

  	
   Michael L.
  Campbell

  
	
   

  	
  Title:

  	
  Chairman and
  Chief Executive Officer

  
					

 

 

Exhibit A

 

Subsidiaries of
the Partnership

 

Apex Cinema, L.L.C.

Arboretum Cinema, L.L.C.

Asheville Cinema, L.L.C.

Cary Cinema, L.L.C.(f/k/a Cary Cinemas, L.L.C.)

Cherrydale Cinema, L.L.C.

Cinema 6, L.L.C.

Columbia Cinema, L.L.C.

Consolidated Theatres Management, L.L.C.

Garner Cinema, L.L.C.

Greenville Cinema, L.L.C.

Greensboro I Theatre, L.L.C.(f/k/a Greensboro I Cinema, L.L.C.)

High Point Cinema, L.L.C.

Hyattsville Cinema, L.L.C.

Kingstowne Cinema, L.L.C.

Laurel Cinema, L.L.C.

Lynchburg Cinema, L.L.C.

Loudoun County Cinema, L.L.C.

Mount Pleasant Cinema, L.L.C.

Mt. Juliet Cinema, L.L.C.

Newnan Cinema, L.L.C.

Park Cinema, L.L.C.

Phillips Place, L.L.C.

Raleigh 16, LLC

Raleigh 16 Holdings, L.L.C.(f/k/a Raleigh 16, L.L.C.)

Richmond I Cinema, L.L.C.

Roanoke Cinema, L.L.C.

Rock Hill Cinema, L.L.C.

Silver Spring Cinema, L.L.C.

Spartanburg Cinema, L.L.C.

Suffolk Cinema, L.L.C.

US 8, L.L.C.

Williamsburg Cinema, L.L.C.

Wilmington Cinema, L.L.C.

 

64

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