Document:

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                                                                 Exhibit 10.16

                                CREDIT AGREEMENT

                            DATED AS OF JUNE 9, 1999

                                      AMONG

                              LOEKS-STAR PARTNERS,

                             MICHIGAN NATIONAL BANK,
                      BANK ONE, MICHIGAN AND OLD KENT BANK

                                       AND

                             MICHIGAN NATIONAL BANK,
                                    AS AGENT
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                                TABLE OF CONTENTS

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SECTION 1   DEFINITIONS.....................................................        1
      1.1   Definitions.....................................................        1
      1.2   Other Interpretive Provisions...................................       10

SECTION 2   COMMITMENTS OF THE BANKS; BORROWING, CONVERSION
            AND LETTER OF CREDIT PROCEDURES.................................       11
      2.1   Commitments.....................................................       11
            2.1.1 Revolving Loan Commitment.................................       11
            2.1.2 Swingline Loan Commitment.................................       11
            2.1.3 L/C Commitment............................................       12
      2.2   Loan Procedures.................................................       12
            2.2.1 Various Types of Loans....................................       12
            2.2.2 Borrowing Procedures......................................       12
            2.2.3 Conversion and Continuation Procedures for Revolving Loans       13
      2.3   Letter of Credit Procedures.....................................       14
            2.3.1 L/C Applications..........................................       14
            2.3.2 Participations in Letters of Credit.......................       14
            2.3.3 Reimbursement Obligations.................................       14
            2.3.4 Limitation on Obligations of Issuing Bank.................       15
            2.3.5 Funding by Banks to Issuing Bank..........................       15
      2.4   Commitments Several.............................................       16
      2.5   Certain Conditions..............................................       16

SECTION 3   NOTES EVIDENCING LOANS..........................................       16
      3.1   Notes...........................................................       16
      3.2   Recordkeeping...................................................       16

SECTION 4   INTEREST........................................................       16
      4.1   Interest Rates..................................................       16
      4.2   Interest Payment Dates..........................................       17
      4.3   Setting and Notice of Eurodollar Rates..........................       17
      4.4   Computation of Interest.........................................       17

SECTION 5   FEES............................................................       17
      5.1   Up Front Fee....................................................       17
      5.2   Non-Use Fee.....................................................       17
      5.3   Letter of Credit Fees...........................................       18
      5.4   Agent's Fees....................................................       18
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SECTION 6   REDUCTION OR TERMINATION OF THE REVOLVING
            COMMITMENT AMOUNT; PREPAYMENTS..................................       18
      6.1   Reduction or Termination of the Revolving Commitment Amount.....       18
            6.1.1 Voluntary Reduction or Termination of the Revolving
                  Commitment Amount.........................................       18
            6.1.2 All Reductions of the Revolving Commitment Amount.........       19
      6.2   Prepayments.....................................................       19
            6.2.1 Voluntary Prepayments.....................................       19
            6.2.2 Mandatory Prepayments.....................................       19
      6.3   All Prepayments.................................................       19

SECTION 7   MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.................       19
      7.1   Making of Payments..............................................       19
      7.2   Application of Certain Payments.................................       19
      7.3   Due Date Extension..............................................       20
      7.4   Setoff..........................................................       20
      7.5   Proration of Payments...........................................       20
      7.6   Taxes...........................................................       20

SECTION 8   INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
            LOANS ..........................................................       21
      8.1   Increased Costs.................................................       21
      8.2   Basis for Determining Interest Rate Inadequate or Unfair........       22
      8.3   Changes in Law Rendering Eurodollar Loans Unlawful..............       23
      8.4   Funding Losses..................................................       23
      8.5   Right of Banks to Fund through Other Offices....................       24
      8.6   Discretion of Banks as to Manner of Funding.....................       24
      8.7   Mitigation of Circumstances; Replacement of Banks...............       24
      8.8   Conclusiveness of Statements; Survival of Provisions............       25

SECTION 9   WARRANTIES......................................................       25
      9.1   Organization....................................................       25
      9.2   Authorization; No Conflict......................................       25
      9.3   Validity and Binding Nature.....................................       25
      9.4   Financial Condition.............................................       26
      9.5   No Material Adverse Change......................................       26
      9.6   Litigation and Contingent Liabilities...........................       26
      9.7   Ownership of Properties; Liens..................................       26
      9.8   Subsidiaries....................................................       26
      9.9   Pension Plans...................................................       26
      9.10  Investment Company Act..........................................       27
      9.11  Public Utility Holding Company Act..............................       27
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      9.12  Regulation U....................................................       27
      9.13  Taxes...........................................................       27
      9.14  Solvency, etc...................................................       27
      9.15  Environmental Matters...........................................       27
            (a)   No Violations.............................................       27
            (b)   Notices...................................................       28
            (c)   Handling of Hazardous Substances..........................       28
      9.16  Year 2000 Problem...............................................       28
      9.17  Insurance.......................................................       29
      9.18  Real Property...................................................       29
      9.19  Information.....................................................       29
      9.20  Intellectual Property...........................................       29
      9.21  Burdensome Obligations..........................................       29
      9.22  Labor Matters...................................................       29
      9.23  No Default......................................................       30

SECTION 10  COVENANTS.......................................................       30
      10.1  Reports, Certificates and Other Information.....................       30
            10.1.1  Annual Report...........................................       30
            10.1.2  Interim Reports.........................................       30
            10.1.3  Compliance Certificates.................................       30
            10.1.4  Notice of Default, Litigation and ERISA Matters.........       31
            10.1.5  Maximum Available Amount Certificates...................       31
            10.1.6  Management Reports......................................       32
            10.1.7  Construction Reports....................................       32
            10.1.8  Subordinated Debt Notices...............................       32
            10.1.9  Year 2000 Problem.......................................       32
            10.1.10 Other Information.......................................       32
      10.2  Books, Records and Inspections..................................       32
      10.3  Maintenance of Property; Insurance..............................       32
      10.4  Compliance with Laws; Payment of Taxes and Liabilities..........       33
      10.5  Maintenance of Existence, etc...................................       33
      10.6  Financial Covenants.............................................       33
            10.6.1  Fixed Charge Coverage Ratio.............................       33
            10.6.2  Debt to EBITDA Ratio....................................       33
            10.6.3  Tangible Net Worth......................................       34
      10.7  Limitations on Debt, Guaranties and Sales.......................       34
      10.8  Investments.....................................................       34
      10.9  Liens...........................................................       34
      10.10 Restricted Payments.............................................       35
      10.11 Mergers, Consolidations, Sales..................................       35
      10.12 Partnership and Management Continuation.........................       35
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      10.13 Project Agreements..............................................       36
      10.14 Leases..........................................................       36
      10.15 Negative Pledge Agreements......................................       36
      10.16 Use of Proceeds.................................................       36
      10.17 Modification of Organizational Documents........................       36
      10.18 Transactions with Affiliates....................................       37
      10.19 Employee Benefit Plans..........................................       37
      10.20 Environmental Matters...........................................       37
      10.21 Inconsistent Agreements.........................................       37
      10.22 Business Activities.............................................       37
      10.23 Restriction of Amendments to Certain Documents..................       37
      10.24 Fiscal Year.....................................................       37
      10.25 Interest Rate Hedging Transactions..............................       37

SECTION 11  EFFECTIVENESS; CONDITIONS OF LENDING, ETC.......................       38
      11.1  Initial Credit Extension........................................       38
            11.1.1  Notes.....................................................     38
            11.1.2  Resolutions...............................................     38
            11.1.3  Consents, etc.............................................     38
            11.1.4  Incumbency and Signature Certificates.....................     38
            11.1.5  Opinions of Counsel.......................................     38
            11.1.6  Insurance...............................................       38
            11.1.7  Payment of Fees.........................................       39
            11.1.8  Maximum Available Amount Certificate....................       39
            11.1.9  Other...................................................       39
      11.2  Conditions......................................................       39
            11.2.1  Compliance with Warranties, No Default, etc.............       39
            11.2.2  Confirmatory Certificate................................       39

SECTION 12  EVENTS OF DEFAULT AND THEIR EFFECT..............................       39
      12.1  Events of Default...............................................       40
            12.1.1   Non-Payment of the Loans, etc..........................       40
            12.1.2   Non-Payment of Other Indebtedness......................       40
            12.1.3   Other Defaults.........................................       40
            12.1.4.  Lease Defaults.........................................       40
            12.1.5   Misrepresentations.....................................       40
            12.1.6   Company's Existence....................................       40
            12.1.7   Bankruptcy, Etc........................................       40
            12.1.8   Judgements.............................................       41
            12.1.9   Invalidity, Etc........................................       41
            12.1.10  Reportable Events......................................       41
      12.2  Effect of Event of Default......................................       41
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SECTION 13  THE AGENT.......................................................       42
      13.1  Appointment and Authorization...................................       42
      13.2  Delegation of Duties............................................       42
      13.3  Liability of Agent..............................................       42
      13.4  Reliance by Agent...............................................       43
      13.5  Notice of Default...............................................       43
      13.6  Credit Decision.................................................       43
      13.7  Indemnification.................................................       44
      13.8  Agent in Individual Capacity....................................       44
      13.9  Successor Agent.................................................       45
      13.10 Collateral Matters..............................................       45

SECTION 14  GENERAL.........................................................       45
      14.1  Waiver; Amendments..............................................       45
      14.2  Confirmations...................................................       46
      14.3  Notices.........................................................       46
      14.4  Computations....................................................       46
      14.5  Regulation U....................................................       47
      14.6  Costs, Expenses and Taxes.......................................       47
      14.7  Captions........................................................       47
      14.8  Assignments; Participations.....................................       47
            14.8.1  Assignments.............................................       47
            14.8.2  Participations..........................................       49
      14.9  Governing Law...................................................       49
      14.10 Counterparts....................................................       49
      14.11 Successors and Assigns..........................................       50
      14.12 Indemnification by the Company..................................       50
      14.13 Nonliability of Lenders.........................................       50
      14.14 Existing Credit Agreement.......................................       51
      14.15 FORUM SELECTION AND CONSENT TO JURISDICTION.....................       51
      14.16 Waiver of Jury Trial............................................       53

SCHEDULE 2.1  BANKS AND PRO RATA SHARES.....................................    2.1-1

SCHEDULE 9.6  LITIGATION AND CONTINGENT LIABILITIES.........................    9.6-1

SCHEDULE 9.15 ENVIRONMENTAL MATTERS.........................................   9.15-1

SCHEDULE 9.17 INSURANCE.....................................................   9.17-1

SCHEDULE 9.18 REAL PROPERTY.................................................   9.18-1
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SCHEDULE 9.22  LABOR MATTERS................................................   9.22-1

SCHEDULE 10.9  EXISTING LIENS...............................................   10.9-1

SCHEDULE 14.3  ADDRESSES FOR NOTICES........................................   14.3-1

EXHIBIT A  FORM OF REVOLVING LOAN NOTE......................................      A-1

EXHIBIT B  FORM OF SWINGLINE NOTE...........................................      B-1

EXHIBIT C  LIST OF LEASES...................................................      C-1

EXHIBIT E  FORM OF COMPLIANCE CERTIFICATE...................................      E-1

EXHIBIT F  FORM OF MONTHLY MAXIMUM AVAILABLE AMOUNT
               CERTIFICATE..................................................      F-1
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                                CREDIT AGREEMENT

      THIS CREDIT AGREEMENT dated as of June 9, 1999 (this "Agreement") is
entered into among LOEKS-STAR PARTNERS (the "Company"), MICHIGAN NATIONAL BANK,
BANK ONE, MICHIGAN, OLD KENT BANK and the financial institutions that may from
time to time become parties hereto (together with their respective successors
and assigns, the "Banks") and MICHIGAN NATIONAL BANK (in its individual
capacity, "MNB"), as agent for the Banks.

      WHEREAS, the Banks have agreed to make available to the Company a
revolving credit facility (which includes letters of credit) upon the terms and
conditions set forth herein;

      NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:

      SECTION 1   DEFINITIONS.

      1.1 Definitions. When used herein the following terms shall have the
following meanings:

      Affected Loan - see Section 8.3.

      Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person. A Person shall be deemed
to be "controlled by" any other Person if such Person possesses, directly or
indirectly, power to vote 5% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.

      Agent means MNB in its capacity as agent for the Banks hereunder and any
successor thereto in such capacity.

      Agreement - see the Preamble.

      Assignment Agreement - see Section 14.9.1.

      Attorney Costs means, with respect to any Person, all reasonable fees and
charges of any counsel to such Person, the reasonable allocable cost of internal
legal services of such Person, all reasonable disbursements of such internal
counsel and all court costs and similar legal expenses.

      Bank - see the Preamble. References to the "Banks" shall include the
Issuing Bank; for purposes of clarification only, to the extent that MNB (or any
successor Issuing Bank) may have
<PAGE>
any rights or obligations in addition to those of the other Banks due to its
status as Issuing Bank, its status as such will be specifically referenced.

      Business Day means any day on which MNB is open for commercial banking
business in Farmington Hills, Michigan and, in the case of a Business Day which
relates to a Eurodollar Loan, on which dealings are carried on in the London
interbank eurodollar market.

      Cash Collateralize means to deliver cash collateral to the Agent, to be
held as cash collateral for outstanding Letters of Credit, pursuant to
documentation satisfactory to the Agent. Derivatives of such term have
corresponding meanings.

      CERCLA - see Section 9.15.

      Closing Date - see Section 11.1.

      Code means the Internal Revenue Code of 1986.

      Commitment means, as to any Bank, such Bank's commitment to make Revolving
Loans, and to issue or participate in Letters of Credit, under this Agreement.
The initial amount of each Bank's Pro Rata Share of the Revolving Commitment
Amount is set forth on Schedule 2.1.

      Company - see the Preamble.

      Compliance Certificate means a certificate substantially in the form of
Exhibit E.

      Computation Period means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter or, in the case of monthly Maximum
Available Amount Certificates, a period of twelve consecutive calendar months,
as the case may be.

      Controlled Group means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.

      Debt means all interest bearing indebtedness of Company for borrowed money
from time to time outstanding, but excluding, without limitation, film
settlements and other non-interest bearing trade payables owing to Company's
affiliates in the ordinary course of Company's business, and excluding Company's
existing guaranty of the indebtedness of Star Southfield Center, L.L.C. ("Star
Southfield") to Michigan National Bank.

      Disposal - see the definition of "Release".

      Dollar and the sign "$" mean lawful money of the United States of America.

                                       2
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      EBITDA means, for any computation period, the Company's Net Income,
increased, to the extent deducted in calculating Net Income, by the sum of (i)
all interest paid or accrued on Debt during such period, (ii) all single
business taxes and other taxes payable by the Company based in whole or in part
on the Company's income ("Income Taxes") paid or accrued during such period, and
(iii) all depreciation and amortization expenses for such period, all as
determined in accordance with GAAP, less only extraordinary and nonrecurring
gains all as determined in accordance with GAAP, and further increased
(excluding any double accounting of revenue) by an amount calculated as follows:
for any of the Company's theater complexes that first opened for business within
12 months prior to the date as of which EBITDA is being measured, and has been
opened for at least one full calendar month prior to such measurement date, an
amount equal to (a) (I) the actual year to date EBITDA of such theater complex
for the Fiscal Year of the Company during which the calculation of EBITDA is
being made, (II) or if such theater complex has not been opened for at least one
full calendar month, the estimated EBITDA of such theater complex as if it had
been open for a full month, as reasonably agreed to by the Company and the
Agent, divided by (b) the cumulative percentage determined as of the respective
month that such theater complex opened for business (prorated on a daily basis
for any partial calendar month of operation) and using the following table:

<TABLE>
<CAPTION>
      Month Opened                  % of Projected EBITDA
      ------------                  ---------------------
<S>                                 <C>
      March                                6%
      April                                6%
      May                                  6%
      June                                 5%
      July                                13%
      August                              15%
      September                            2%
      October                              4%
      November                             9%
      December                            14%
      January                             10%
      February                            10%
</TABLE>

      For example, since Company's fiscal year ends on the last day of February,
(a) if a theater complex opens for business on May 15 and has actual EBITDA of
$1,000,000 through August 31 of the same year, the calculation of EBITDA made as
of such August 31 would be increased by $2,777,777.78 [i.e. $1,000,000 divided
by 0.36 (i.e. 0.03 + 0.05 +0.13 + 0.15)], and (b) if a theater complex opens for
business on May 1 and has actual EBITDA of $2,000,000 through February 28 of the
following year, the calculation of EBITDA made as of such February 28 would be
increased by $2,272,727.27 [i.e. $2,000,000 divided by 0.88 (i.e. 0.06 + 0.05
+0.13 + 0.15 + 0.02 + 0.04 + 0.09 + 0.14 + 0.10 + 0.10)]).

      EBITDA shall be calculated on a rolling 12 month basis or a rolling 4
Fiscal Quarter basis, as the case may be.

                                       3
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      Event(s) of Default means any one or more of the events specified in
Section 12.1 hereof.

      Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.

      Environmental Laws means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all legally enforceable administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any
governmental authority, in each case relating to Environmental Matters.

      Environmental Matters means any matter arising out of or relating to
health and safety, or pollution or protection of the environment or workplace,
including any of the foregoing relating to the presence, use, production,
generation, handling, transport, treatment, storage, disposal, distribution,
discharge, release, control or cleanup of any Hazardous Substance.

      ERISA means the Employee Retirement Income Security Act of 1974.

      Eurocurrency Reserve Percentage means, with respect to any Eurodollar Loan
for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the FRB, for determining the
aggregate maximum reserve requirements applicable to "Eurocurrency Liabilities"
pursuant to Regulation D or any other then applicable regulation of the FRB
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D.

      Eurodollar Loan means any Revolving Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).

      Eurodollar Margin - see the Pricing Schedule.

      Eurodollar Office means with respect to any Bank the office or offices of
such Bank which shall be making or maintaining the Eurodollar Loans of such Bank
hereunder. A Eurodollar Office of any Bank may be, at the option of such Bank,
either a domestic or foreign office.

      Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, a rate per annum equal to the offered rate for deposits in
Dollars for a period equal or comparable to such Interest Period which appears
on Telerate page 3750 as of 11:00 A.M. (London time) two Business Days prior to
the first day of such Interest Period. "Telerate Page 3750 " means the display
designated as "Page 3750" on the Telerate Service (or such other page as may
replace page 3750 on that service or such other service as may be nominated by
the British Bankers'

                                       4
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Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for Dollar deposits).

      Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar
Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/16th of 1%) determined pursuant to the following formula:

            Eurodollar Rate   =     Eurodollar Rate
                                    ---------------
            (Reserve Adjusted)      1-Eurocurrency
                                    Reserve Percentage.

      Event of Default means any of the events described in Section 12.1 hereof.

      Fiscal Quarter means a fiscal quarter of a Fiscal Year.

      Fiscal Year means the fiscal year of the Company, which period shall be
the 12-month period ending on the last day of February of each year. References
to a Fiscal Year with a number corresponding to any calendar year (e.g., "Fiscal
Year 2000") refer to the Fiscal Year ending on the last day of February of such
calendar year.

      Fixed Charge Coverage Ratio means, for any Computation Period, the ratio
of (i) the sum of Company's Net Income (less an assumed distribution to partners
of 40% of Net Income to reflect the income tax obligations of Company's
partners), the non-cash portion of deferred taxes during such Computation
Period, interest expense during such Computation Period, depreciation and
amortization expense during such Computation Period and lease expense during
such Computation Period, to (ii) the sum of interest expense during such
Computation Period, lease expense during such Computation Period, and required
principal repayments of indebtedness during such Computation Period, if any, all
as calculated in accordance with GAAP, provided, however, that for purposes of
this definition, "lease expense" shall include base minimum rent payable by
Company under all Leases and common area maintenance expenses reimbursable by
Company under all Leases, but shall exclude all percentage rents, property taxes
and insurance premiums payable under the Leases (whether the same are included
in common area maintenance expenses or not).

      FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.

      GAAP means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

                                       5
<PAGE>
      Group - see Section 2.2.1.

      Hazardous Substances - see Section 9.15.

      Interest Period means, as to any Eurodollar Loan, the period commencing on
the date such Loan is borrowed or continued as, or converted into, a Eurodollar
Loan and ending on the date one, two, three, six or, to the extent available,
twelve months thereafter as selected by the Company pursuant to Section 2.2.2 or
2.2.3, as the case may be; provided that:

      (i) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the following Business
Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the preceding Business Day;

      (ii) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

      (iii) the Company may not select any Interest Period for a Revolving Loan
which would extend beyond the scheduled Termination Date.

      Investment means, relative to any Person, any investment in another
Person, whether by acquisition of any debt or equity security, by making any
loan or advance or by becoming obligated with respect to a Suretyship Liability
in respect of obligations of such other Person (other than travel and similar
advances to employees in the ordinary course of business).

      Issuing Bank means MNB in its capacity as the issuer of Letters of Credit
hereunder and its successors and assigns in such capacity.

      L/C Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
Issuing Bank at the time of such request for the type of letter of credit
requested.

      LC Fee Rate - see the Pricing Schedule.

      Leases means each of the leases listed in Exhibit C attached hereto
("Existing Leases") and all future leases and other occupancy agreements
pursuant to which Company will be a tenant ("Future Leases"), and "Lease" means
any one of the Leases.

      Letter of Credit - see Section 2.1.3.

      Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien,

                                       6
<PAGE>
encumbrance, charge or other security interest of any kind, whether arising by
contract, as a matter of law, by judicial process or otherwise.

      Loan Documents means this Agreement, the Notes and the L/C Applications.

      Loans means Revolving Loans and Swingline Loans.

      Margin Stock means any "margin stock" as defined in Regulation U.

      Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business or properties of the Company, taken as a whole (b) a material
impairment of the ability of the Company to perform any of its material
obligations under any Loan Document or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Company of any
material provision of one or more Loan Documents.

      Maximum Available Amount means the lesser of (a) $80,000,000.00 and (b)
the amount equal to 4 times EBITDA for any Computation Period prior to February
28, 2002 or the amount equal to 3.5 times EBITDA for any Computation Period from
and after February 28, 2002.

      Maximum Available Amount Certificate means a certificate in substantially
the form of Exhibit F.

      MNB - see the Preamble.

      Multi employer Pension Plan means a Multi employer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Company or any member of the
Controlled Group may have any liability.

      Net Income means, for any period, the net income (or loss) of the Company
for such period, excluding any extraordinary gains, any nonrecurring items and
any gains from discontinued operations.

      Non-Use Fee Rate - see the Pricing Schedule.

      Notes means all of the promissory notes evidencing the Revolving Loans and
the Swingline Loans, and Note means any one of the Notes.

      PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

      Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multi
employer Pension Plan), and to which the Company or any member of the Controlled
Group may have any liability, including any

                                       7
<PAGE>
liability by reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under Section 4069 of ERISA.

      Person means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.

      Prime Rate means, for any day, the rate of interest in effect for such day
as publicly announced from time to time by MNB as its prime rate (whether or not
such rate is actually charged by MNB). Any change in the Prime Rate announced by
MNB shall take effect at the opening of business on the day specified in the
public announcement of such change.

      Prime Rate Loan means any Loan which bears interest at or by reference to
the Prime Rate.

      Prime Rate Margin - see the Pricing Schedule.

      Pro Rata Share means, with respect to any Bank, the percentage specified
opposite such Bank's name on Schedule 2.1 hereto, as adjusted from time to time
in accordance with the terms hereof.

      Purposes - see Section 10.16.

      RCRA - see Section 9.15.

      Regulation D means Regulation D of the FRB.

      Regulation U means Regulation U of the FRB.

      Release has the meaning specified in CERCLA and the term "Disposal" (or
"Disposed") has the meaning specified in RCRA; provided that in the event either
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment; and provided, further, that to the extent that the laws of a state
wherein any affected property lies establish a meaning for "Release" or
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
broader meaning shall apply.

      Required Banks means Banks having Pro Rata Shares aggregating 66 and 2/3
percent (66.67%) or more.

      Revolving Commitment Amount means $80,000,000.00, as reduced from time to
time pursuant to Section 6.1.

                                       8
<PAGE>
      Revolving Loan - see Section 2.1.1.

      Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.

      Stated Amount means, with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under any and all circumstances plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.

      Subordinated Debt means Debt which has been subordinated to the Loans and
all of the Company's other obligations under the Loan Documents by a written
agreement in form and substance satisfactory to the Required Banks, which such
agreement with respect to indebtedness owing to related parties shall, unless
otherwise agreed by the Required Banks, prohibit any payments and prepayments of
principal to be made with respect to such Debt.

      Subsidiary means any Person in which the Company, directly or indirectly,
owns more than a 50% voting interest and Subsidiaries means one or more
Subsidiary. Based upon the Company's existing interest in Star Southfield, Star
Southfield is not now a Subsidiary.

      Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in any
other Person, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.

      Swingline Loan - see Section 2.1.2

      Tangible Net Worth means at any time the Company's net worth, as
determined in accordance with GAAP, plus the outstanding principal balance of
Subordinated Debt, less goodwill.

      Termination Date means the earlier to occur of (a) May 1, 2003 or (b) such
other date on which the Commitments terminate pursuant to Section 6 or 12.

      Trailing Rate Average LIBOR means the 30-day trailing average daily London
Interbank Offered Rate for one month U.S. Dollar denominated deposits offered by
major banks in the London, United Kingdom, market at 11:00 a.m. London Time, as
reported by one of the following sources, selected by MNB on an availability
basis, in descending order of priority: (1) the Dow Jones Telerate System "LIBOR
Page" report of such interest rates as determined by

                                       9
<PAGE>
Reuter's News Service; (2) the Dow Jones Telerate System "Page 3750" report of
such interest rates as determined by the British Bankers Association; or (3) The
Wall Street Journal, Midwest Edition, report of such interest rate; or (4) any
other generally accepted authoritative source as Bank may reference. The said
30-day trailing average will be updated by MNB each Business Day by adding the
most recently reported London Interbank Offered Rate on one month U.S. Dollar
deposits and by subtracting the oldest reported rate on said deposits.

      Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Prime Rate Loans or borrowings
and Eurodollar Loans or borrowings.

      Unmatured Event of Default means any event that, if it continues uncured,
will, with lapse of time or notice or both, constitute an Event of Default.

      Year 2000 Problem means the risk that computer applications and embedded
microchips in non-computing devices may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999.

      1.2   Other Interpretive Provisions.

            (a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

            (b) Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.

            (c) The term "including" is not limiting and means "including
without limitation."

            (d) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding", and the word "through" means "to and
including."

            (e) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
shall be construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or regulation.

            (f) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and each
shall be performed in accordance with its terms.

                                       10
<PAGE>
            (g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Banks and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agent or the Banks merely
because of the Agent's or Banks' involvement in their preparation.

            (h) Unless otherwise specified herein, all accounting terms used
herein shall have the meanings determined in accordance with GAAP.

            (i) In the event that the Company has any Subsidiaries at any time,
the term Company shall mean the Company and such Subsidiaries on a consolidated
basis and all of the covenants contained herein shall apply to the Company and
all of such Subsidiaries.

      SECTION 2   COMMITMENTS OF THE BANKS; BORROWING, CONVERSION
                  AND LETTER OF CREDIT PROCEDURES.

      2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in letters of credit for the account of,
the Company as follows:

            2.1.1 Revolving Loan Commitment. Each Bank will make loans
("Revolving Loans") from time to time until the Termination Date in such Bank's
Pro Rata Share of such aggregate amounts as the Company may request from all
Banks; provided that the Revolving Outstandings, plus the outstanding principal
balance of the Swingline Loans, will not at any time exceed the Maximum
Available Amount. Subject to the terms and conditions hereof, on or before the
Termination Date, the Company may borrow, prepay pursuant to Section 6.2 hereof
and reborrow under this Section 2.

            2.1.2 Swingline Loan Commitment. The Agent will make interim
advances (hereinafter sometimes referred to as "Swingline Loans") of its own
funds to the Company in an aggregate amount not to exceed $2,000,000 at any one
time outstanding; provided, however, that no Swingline Loan shall be made unless
all conditions precedent for a Revolving Loan have been met. The aggregate
amount of all Swingline Loans outstanding on the date any Revolving Loan is made
shall be included as a previously disbursed portion of such Revolving Loan in
which each Bank shall participate based upon its Pro Rata Share and the Agent
shall thereupon be immediately reimbursed for the full amount of such Swingline
Loans from the proceeds of such Revolving Loan. If no Revolving Loan is made for
any period of 60 days, whether by reason of the failure to comply with any
condition for a Revolving Loan or otherwise, each Bank shall, upon request of
the Agent, on the Business Day after receiving such request, remit to the Agent
such Bank's Pro Rata Share of all outstanding Swingline Loans, whereupon, such
Swingline Loans shall be automatically converted to a Revolving Loan of the type
designated by the Company (or if no such designation is made, then a Revolving
Prime Rate Loan) effective on such next Business Day. In no event will any
Swingline Loan be made if, after giving effect to such Swingline Loan, the
aggregate principal amount of all Swingline Loans and all Revolving

                                       11
<PAGE>
Outstandings would exceed the Maximum Available Amount. All Swingline Loans
shall be made in minimum amounts of $250,000.00 and shall bear interest, at the
Company's option, at the Prime Rate plus the applicable Prime Rate Margin or the
Trailing Rate Average LIBOR plus the applicable Eurodollar Margin. If the
Company fails to designate the interest rate, interest shall accrue at the Prime
Rate plus the applicable Prime Rate Margin.

            2.1.3 L/C Commitment. (a) The Issuing Bank will issue standby
letters of credit, in each case containing such terms and conditions as are
permitted by this Agreement and are reasonably satisfactory to the Issuing Bank
(each a "Letter of Credit"), at the request of and for the account of the
Company from time to time before the date which is 30 days prior to the
Termination Date and (b) as more fully set forth in Section 2.3.2, each Bank
agrees to purchase a participation in each such Letter of Credit; provided that
(i) the aggregate Stated Amount of all Letters of Credit shall not at any time
exceed $10,000,000.00 and (ii) the Revolving Outstandings, plus the outstanding
principal balance of the Swingline Loans, will not at any time exceed the
Maximum Available Amount.

      2.2   Loan Procedures.

            2.2.1 Various Types of Loans. Each Revolving Loan shall be divided
into tranches which are, either a Prime Rate Loan or a Eurodollar Loan (each a
"type" of Loan), as the Company shall specify in the related notice of borrowing
or conversion pursuant to Section 2.2.2 or 2.2.3. Eurodollar Loans having the
same Interest Period are sometimes called a "Group" or collectively "Groups".
Prime Rate Loans and Eurodollar Loans may be outstanding at the same time,
provided that not more than six (6) different Groups of Eurodollar Loans shall
be outstanding at any one time. All borrowings, conversions and repayments of
Revolving Loans shall be effected so that each Bank will have a pro rata share
(according to its Pro Rata Share) of all types and Groups of Loans.

            2.2.2 Borrowing Procedures. The Company shall give written notice or
telephonic notice (followed immediately by written confirmation thereof) to the
Agent of each proposed Revolving Loan not later than (a) in the case of a Prime
Rate borrowing, 11:00 A.M., Farmington Hills time, on the proposed date of such
borrowing, and (b) in the case of a Eurodollar borrowing, 11:00 A.M., Farmington
Hills time, at least three Business Days prior to the proposed date of such
borrowing. Each such notice shall be effective upon receipt by the Agent, shall
be irrevocable, and shall specify the date, amount and type of borrowing and, in
the case of a Eurodollar borrowing, the initial Interest Period therefor.
Promptly upon receipt of such notice, but not later than 12:00 noon, Farmington
Hills time, the Agent shall advise each Bank thereof. Not later than 1:00 P.M.,
Farmington Hills time, on the date of a proposed Revolving Loan, each Bank shall
provide the Agent at the office specified by the Agent with immediately
available funds covering such Bank's Pro Rata Share of such Revolving Loan and,
so long as the Agent has not received written notice that the conditions
precedent set forth in Section 11 with respect to such borrowing have not been
satisfied, the Agent shall pay over the funds received by the Agent to the
Company on the requested borrowing date. Each borrowing shall be on a Business
Day. Each Eurodollar Loan shall be in an aggregate amount of at least

                                       12
<PAGE>
$500,000.00. Each Prime Rate Revolving Loan shall be in an aggregate amount of
at least $250,000.00. Swingline Loans may not be made more often than once every
week nor may Revolving Loans be made more often than once every week.

            2.2.3 Conversion and Continuation Procedures for Revolving Loans.

            (a) Subject to Section 2.2.1, the Company may, upon irrevocable
written notice to the Agent in accordance with clause (b) below:

                  (i) elect, as of any Business Day, to convert any Prime Rate
Loans or any Eurodollar Loans (or any part thereof in an aggregate amount not
less than $500,000.00 or $250,000.00, respectively) into Loans of the other
type; or

                  (ii) elect, as of the last day of the applicable Interest
Period, to continue any Eurodollar Loans having Interest Periods expiring on
such day (or any part thereof in an aggregate amount not less than $500,000.00
for a new Interest Period;

provided that after giving effect to any prepayment, conversion or continuation,
the aggregate principal amount of each Group of Eurodollar Loans shall be at
least $500,000.00.

                  (b) The Company shall give written or telephonic notice
(followed immediately by written confirmation thereof) to the Agent of each
proposed conversion or continuation of a Revolving Loan not later than (i) in
the case of conversion into Prime Rate Loans, 11:00 A.M., Farmington Hills time,
on the proposed date of such conversion and (ii) in the case of conversion into
or continuation of Eurodollar Loans, 11:00 A.M., Farmington Hills time, at least
three Business Days prior to the proposed date of such conversion or
continuation, specifying in each case:

                  (i) the proposed date of conversion or continuation;

                  (ii) the aggregate amount of Loans to be converted or
            continued;

                  (iii) the type of Loans resulting from the proposed conversion
            or continuation; and

                  (iv) in the case of conversion into, or continuation of,
            Eurodollar Loans, the duration of the requested Interest Period
            therefor.

                  (c) If upon the expiration of any Interest Period applicable
to Eurodollar Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Eurodollar Loans, the Company shall be deemed to
have elected to convert such Eurodollar Loans into Prime Rate Loans effective on
the last day of such Interest Period.

                                       13
<PAGE>
                  (d) The Agent will promptly notify each Bank of its receipt of
a notice of conversion or continuation pursuant to this Section 2.2.3 or, if no
timely notice is provided by the Company, of the details of any automatic
conversion.

                  (e) Any conversion of a Eurodollar Loan on a day other than
the last day of an Interest Period therefor shall be subject to Section 8.4.

      2.3   Letter of Credit Procedures.

            2.3.1 L/C Applications. The Company shall give notice to the Agent
and the Issuing Bank of the proposed issuance of each Letter of Credit on a
Business Day which is at least three Business Days (or such lesser number of
days as the Agent and the Issuing Bank shall agree in any particular instance in
their sole discretion) prior to the proposed date of issuance of such Letter of
Credit. Each such notice shall be accompanied by an L/C Application, duly
executed by the Company and in all respects satisfactory to the Agent and the
Issuing Bank, together with such other documentation as the Agent or the Issuing
Bank may request in support thereof, it being understood that each L/C
Application shall specify, among other things, the date on which the proposed
Letter of Credit is to be issued, the expiration date of such Letter of Credit
(which shall not be later than the earlier to occur of (x) one year after the
date of issuance thereof and (y) thirty days prior to the scheduled Termination
Date) and whether such Letter of Credit is to be transferable in whole or in
part. So long as the Issuing Bank has not received written notice that the
conditions precedent set forth in Section 11 with respect to the issuance of
such Letter of Credit have not been satisfied, the Issuing Bank shall issue such
Letter of Credit on the requested issuance date. The Issuing Bank shall promptly
advise the Agent of the issuance of each Letter of Credit and of any amendment
thereto, extension thereof or event or circumstance changing the amount
available for drawing thereunder. In the event of any inconsistency between the
terms of any L/C Application and the terms of this Agreement, the terms of this
Agreement shall control.

            2.3.2 Participations in Letters of Credit. Concurrently with the
issuance of each Letter of Credit, the Issuing Bank shall be deemed to have sold
and transferred to each other Bank, and each other Bank shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such other Bank's Pro Rata Share, in such Letter of Credit and the
Company's reimbursement obligations with respect thereto. For the purposes of
this Agreement, the unparticipated portion of each Letter of Credit shall be
deemed to be the Issuing Bank's "participation" therein. The Issuing Bank hereby
agrees, upon request of the Agent or any Bank, to deliver to the Agent or such
Bank a list of all outstanding Letters of Credit issued by the Issuing Bank,
together with such information related thereto as the Agent or such Bank may
reasonably request.

            2.3.3 Reimbursement Obligations. The Company hereby unconditionally
and irrevocably agrees to reimburse the Issuing Bank for each payment or
disbursement made by the Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made,

                                       14
<PAGE>
which reimbursement may be made from the proceeds of a Loan made pursuant to the
terms of this Agreement. Any amount not reimbursed on the date of such payment
or disbursement shall bear interest from the date of such payment or
disbursement to the date that the Issuing Bank is reimbursed by the Company
therefor, payable on demand, at a rate per annum equal to the Prime Rate from
time to time in effect plus the Prime Rate Margin from time to time in effect
plus, beginning on the third Business Day after receipt of notice from the
Issuing Bank of such payment or disbursement, 2%. The Issuing Bank shall notify
the Company and the Agent whenever any demand for payment is made under any
Letter of Credit by the beneficiary thereunder; provided that the failure of the
Issuing Bank to so notify the Company shall not affect the rights of the Issuing
Bank or the Banks in any manner whatsoever.

            2.3.4 Limitation on Obligations of Issuing Bank. In determining
whether to pay under any Letter of Credit, the Issuing Bank shall not have any
obligation to the Company or any Bank other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not impose upon the
Issuing Bank any liability to the Company or any Bank and shall not reduce or
impair the Company's reimbursement obligations set forth in Section 2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.

            2.3.5 Funding by Banks to Issuing Bank. If the Issuing Bank makes
any payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Bank in full for such payment or disbursement by 11:00
A.M., Farmington Hills time, on the date of such payment or disbursement, or if
any reimbursement received by the Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the Agent for
the account of the Issuing Bank, in full or partial payment of the purchase
price of its participation in such Letter of Credit, its Pro Rata Share of such
payment or disbursement (but no such payment shall diminish the obligations of
the Company under Section 2.3.3), and, upon notice from the Issuing Bank, the
Agent shall promptly notify each other Bank thereof. Each other Bank irrevocably
and unconditionally agrees to so pay to the Agent in immediately available funds
for the Issuing Bank's account the amount of such other Bank's Percentage of
such payment or disbursement. If and to the extent any Bank shall not have made
such amount available to the Agent by 2:00 P.M., Farmington Hills time, on the
Business Day on which such Bank receives notice from the Agent of such payment
or disbursement (it being understood that any such notice received after noon,
Farmington Hills time, on any Business Day shall be deemed to have been received
on the next following Business Day), such Bank agrees to pay interest on such
amount to the Agent for the Issuing Bank's account forthwith on demand, for each
day from the date such amount was to have been delivered to the Agent to the
date such amount is paid, at a rate per annum equal to (a) for the first three
days after demand, the Federal Funds Rate from time to time in effect and (b)
thereafter, the Prime Rate from time to time in effect. Any Bank's failure to
make available to the Agent its Pro Rata Share of any such payment or
disbursement shall not relieve any other Bank of its obligation hereunder to
make

                                       15
<PAGE>
available to the Agent such other Bank's Pro Rata Share of such payment, but no
Bank shall be responsible for the failure of any other Bank to make available to
the Agent such other Bank's Pro Rata Share of any such payment or disbursement.

      2.4 Commitments Several. The failure of any Bank to make a requested
Revolving Loan on any date shall not relieve any other Bank of its obligation
(if any) to make a Revolving Loan on such date, but no Bank shall be responsible
for the failure of any other Bank to make any Revolving Loan to be made by such
other Bank.

      2.5 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Revolving Loan, or to
permit the continuation of or any conversion into any Eurodollar Loan, and the
Issuing Bank shall not have any obligation to issue any Letter of Credit, if an
Event of Default or Unmatured Event of Default exists.

      SECTION 3   NOTES EVIDENCING LOANS.

      3.1 Notes. The Revolving Loans of each Bank shall be evidenced by a
promissory note substantially in the form set forth in Exhibit A, with
appropriate insertions, payable to the order of such Bank in a face principal
amount equal to the sum of such Bank's Pro Rata Share of the Revolving
Commitment Amount on the Termination Date. The Swingline Loans shall be
evidenced by a promissory note in the form set forth in Exhibit B, payable to
the order of the Agent on the Termination Date.

      3.2 Recordkeeping. Each Bank shall record in its records, or at its option
on the schedule attached to its Note(s), the date and amount of each Loan made
by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.

      SECTION 4 INTEREST.

      4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:

            (a) at all times while such Loan is a Prime Rate Loan, at a rate per
annum equal to the sum of the Prime Rate from time to time in effect plus the
Prime Rate Margin from time to time in effect;

                                       16
<PAGE>
            (b) at all times while such Revolving Loan is a Eurodollar Loan, at
a rate per annum equal to the sum of the Eurodollar Rate (Reserve Adjusted)
applicable to each Interest Period for such Loan plus the Eurodollar Margin from
time to time in effect; and

            (c) at all times that interest on the Swingline Loans is based upon
the Trailing Rate Average LIBOR, at a rate per annum equal to the sum of the
Trailing Rate Average LIBOR plus the Eurodollar Margin from time to time in
effect;

provided that at any time an Event of Default exists, the interest rate
applicable to each Loan shall be increased by 2% (the "Default Rate").

      4.2 Interest Payment Dates. Accrued interest on each Prime Rate Loan and
each Swingline Loan shall be payable in arrears on the last day of each calendar
month and at maturity. Accrued interest on each Eurodollar Loan shall be payable
on the last day of each Interest Period relating to such Loan (and, in the case
of a Eurodollar Loan with a six-month Interest Period or a twelve month Interest
period, on the three-month anniversary of the first day of such Interest Period
or on the three-month, six-month and nine-month anniversary of the first day of
such Interest Period, as the case may be) and at maturity. After maturity,
accrued interest on all Loans shall be payable on demand.

      4.3 Setting and Notice of Eurodollar Rates. The applicable Eurodollar Rate
for each Interest Period shall be determined by the Agent, and notice thereof
shall be given by the Agent promptly to the Company and each Bank. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Bank, deliver to the
Company or such Bank a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate hereunder.

      4.4 Computation of Interest. Interest shall be computed for the actual
number of days elapsed on the basis of a year of 360 days. The applicable
interest rate for each Prime Rate Loan shall change simultaneously with each
change in the Prime Rate. The applicable interest rate for each Swingline Loan
whose interest is based upon the Trailing Rate Average LIBOR shall change
simultaneously with each change in the Trailing Rate Average LIBOR.

      SECTION 5   FEES.

      5.1 Up Front Fee. The Company agrees to pay to the Agent for the pro rata
benefit of each Bank an up front fee in the aggregate amount of $112,500.00.

      5.2 Non-Use Fee. The Company agrees to pay to the Agent for the account of
each Bank a non-use fee, for the period from the Closing Date to the Termination
Date, at the Non-Use Fee Rate in effect from time to time on such Bank's Pro
Rata Share (as adjusted from time to time) of the daily average unused amount of
the Revolving Commitment Amount. For purposes of calculating usage under this
Section, the Revolving Commitment Amount shall be

                                       17
<PAGE>
deemed used to the extent of the aggregate principal amount of all outstanding
Revolving Loans plus the Stated Amount of all Letters of Credit, but expressly
excluding the outstanding principal balance of any Swingline Loans. Such non-use
fee shall be payable in arrears on the last day of each calendar quarter and on
the Termination Date for any period then ending for which such non-use fee shall
not have previously been paid. The non-use fee shall be computed for the actual
number of days elapsed on the basis of a year of 360 days.

      5.3   Letter of Credit Fees.

            (a) The Company agrees to pay to the Agent for the account of each
Bank a letter of credit fee for each Letter of Credit equal to the LC Fee Rate
in effect from time to time of such Bank's Pro Rata Share (as adjusted from time
to time) on the undrawn amount of such Letter of Credit (computed for the actual
number of days elapsed on the basis of a year of 360 days); provided that the
rate applicable to each Letter of Credit shall be increased by 2% at any time
that an Event of Default exists. Such letter of credit fee shall be payable in
arrears on the last day of each calendar quarter and on the Termination Date (or
such other date on which such Letter of Credit expires or is terminated) for the
period from the date of the issuance of each Letter of Credit (or the last day
on which the letter of credit fee was paid with respect thereto) to the date
such payment is due or, if earlier, the date on which such Letter of Credit
expired or was terminated.

            (b) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the Issuing Bank, for its own account, prior to or
simultaneously with the issuance of each Letter of Credit (i) such fees and
expenses as the Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fronting fee in the amount equal
to one-quarter of one percent (1/4%) of the Stated Amount of such Letter of
Credit.

      5.4 Agent's Fees. The Company agrees to pay to the Agent such agent's fees
as are mutually agreed to from time to time by the Company and the Agent,
including a syndication fee and annual administration fees.

      SECTION 6   REDUCTION OR TERMINATION OF THE REVOLVING
                  COMMITMENT AMOUNT; PREPAYMENTS.

      6.1 Reduction or Termination of the Revolving Commitment Amount.

            6.1.1 Voluntary Reduction or Termination of the Revolving Commitment
Amount. The Company may from time to time on at least five Business Days' prior
written notice received by the Agent (which shall promptly advise each Bank
thereof) permanently reduce the Revolving Commitment Amount to an amount not
less than the Revolving Outstandings and the outstanding balance of the
Swingline Loans. Any such reduction shall be in an amount not less than
$250,000.00. Concurrently with any reduction of the Revolving Commitment Amount
to zero, the Company shall pay in full all principal and all interest on the

                                       18
<PAGE>
Loans, all non-use fees and all letter of credit fees and shall Cash
Collateralize in full all obligations arising with respect to the Letters of
Credit.

            6.1.2 All Reductions of the Revolving Commitment Amount. All
reductions of the Revolving Commitment Amount shall reduce the Commitments pro
rata among the Banks according to their respective Pro Rata Shares.

      6.2   Prepayments.

            6.2.1 Voluntary Prepayments. The Company may from time to time
prepay the Loans in whole or in part; provided that the Company shall give the
Agent (which shall promptly advise each Bank) notice thereof not later than
11:00 A.M., Farmington Hills time, on the day of such prepayment (which shall be
a Business Day), specifying the Loans to be prepaid and the date and amount of
prepayment. Any such partial prepayment shall be in an amount not less than
$250,000.00. All voluntary prepayments may be reborrowed in accordance with the
terms of this Agreement.

            6.2.2 Mandatory Prepayments. If on the last day of any Fiscal
Quarter of the Company, the Revolving Outstandings and the outstanding balance
of the Swingline Loans exceed the Maximum Available Amount, the Company shall
immediately prepay Revolving Loans and/or Swingline Loans and/or Cash
Collateralize the outstanding Letters of Credit, or do a combination of the
foregoing, in an amount sufficient to eliminate such excess.

      6.3 All Prepayments. Each voluntary partial prepayment shall be in a
principal amount of at least $250,000.00. Any partial prepayment of a Group of
Eurodollar Loans shall be subject to the proviso to Section 2.2.3(a). Any
prepayment of a Eurodollar Loan on a day other than the last day of an Interest
Period therefor shall include interest on the principal amount being repaid and
shall be subject to Section 8.4.

      SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

      7.1 Making of Payments. All payments of principal of or interest on the
Notes, and of all fees, shall be made by the Company to the Agent in immediately
available funds at the office specified by the Agent not later than noon,
Farmington Hills time, on the date due; and funds received after that hour shall
be deemed to have been received by the Agent on the following Business Day. The
Agent shall promptly remit to each Bank its share of all such payments received
in collected funds by the Agent for the account of such Bank. All payments under
Section 8.1 shall be made by the Company directly to the Bank entitled thereto.

      7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the Agent shall advise
such Bank as to the application of such payment.

                                       19
<PAGE>
      7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a Eurodollar Loan, such immediately
following Business Day is the first Business Day of a calendar month, in which
case such due date shall be the immediately preceding Business Day) and, in the
case of principal, additional interest shall accrue and be payable for the
period of any such extension.

      7.4 Setoff. Subject to Section 7.5 hereof, the Company agrees that the
Agent and each Bank have all rights of set-off and bankers' lien provided by
applicable law, and in addition thereto, the Company agrees that at any time any
Event of Default exists, the Agent and each Bank may apply to the payment of any
obligations of the Company hereunder, whether or not then due, any and all
balances, credits, deposits, accounts or moneys of the Company then or
thereafter with the Agent or such Bank.

      7.5 Proration of Payments. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to Section 8.7 or 14.9 and payments of
interest on any Affected Loan) on account of principal of or interest on any
Loan (or on account of its participation in any Letter of Credit) in excess of
its pro rata share of payments and other recoveries obtained by all Banks on
account of principal of and interest on the Loans (or such participation) then
held by them, such Bank shall purchase from the other Banks such participations
in the Loans (or sub-participations in Letters of Credit) held by them as shall
be necessary to cause such purchasing Bank to share the excess payment or other
recovery ratably with each of them; provided that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Bank, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery.

      7.6 Taxes. All payments of principal of, and interest on, the Loans and
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding franchise taxes and taxes
imposed on or measured by any Bank's net income or receipts (all non-excluded
items being called "Taxes"). If any withholding or deduction from any payment to
be made by the Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will:

            (a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;

            (b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and

            (c) pay to the Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal

                                       20
<PAGE>
the full amount such Bank would have received had no such withholding or
deduction been required.

Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.

      If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure. For purposes of
this Section 7.6, a distribution hereunder by the Agent or any Bank to or for
the account of any Bank shall be deemed a payment by the Company.

      Each Bank that (a) is organized under the laws of a jurisdiction other
than the United States of America and (b)(i) is a party hereto on the Closing
Date or (ii) becomes an assignee of an interest under this Agreement under
Section 14.9.1 after the Closing Date (unless such Bank was already a Bank
hereunder immediately prior to such assignment) shall execute and deliver to the
Company and the Agent one or more (as the Company or the Agent may reasonably
request) United States Internal Revenue Service Forms 4224 or Forms 1001 or such
other forms or documents, appropriately completed, as may be applicable to
establish that such Bank is exempt from withholding or deduction of Taxes. The
Company shall not be required to pay additional amounts to any Bank pursuant to
this Section 7.6 to the extent that the obligation to pay such additional
amounts would not have arisen but for the failure of such Bank to comply with
this paragraph.

      SECTION 8   INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
                  LOANS.

      8.1   Increased Costs.

            (a) If, after the date hereof, the adoption of, or any change in,
any applicable law, rule or regulation, or any change in the interpretation or
administration of any applicable law, rule or regulation by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any Eurodollar Office of
such Bank) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency

                  (i) shall subject any Bank (or any Eurodollar Office of such
Bank) to any tax, duty or other charge with respect to its Eurodollar Loans, its
Note or its obligation to make Eurodollar Loans, or shall change the basis of
taxation of payments to any Bank of the

                                       21
<PAGE>
principal of or interest on its Eurodollar Loans or any other amounts due under
this Agreement in respect of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall net
income of such Bank or its Eurodollar Office imposed by the jurisdiction in
which such Bank's principal executive office or Eurodollar Office is located);

                  (ii) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the FRB, but excluding any reserve included in
the determination of interest rates pursuant to Section 4), special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by any Bank (or any Eurodollar Office of such Bank); or

                  (iii) shall impose on any Bank (or its Eurodollar Office) any
other condition affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;

and the result of any of the foregoing is to increase the cost to (or to impose
a cost on) such Bank (or any Eurodollar Office of such Bank) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Eurodollar Office) under this Agreement or under
its Note with respect thereto, then upon demand by such Bank (which demand shall
be accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Company shall pay directly to such Bank such
additional amount as will compensate such Bank for such increased cost or such
reduction.

            (b) If any Bank shall reasonably determine that any change in, the
adoption or phase-in of, any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank or any
Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder or under any Letter of Credit to a level below
that which such Bank or such controlling Person could have achieved but for such
change, adoption, phase-in or compliance (taking into consideration such Bank's
or such controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Bank or such controlling Person to be material, then from
time to time, upon demand by such Bank (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail, a copy of which shall be furnished to the
Agent), the Company shall pay to such Bank such additional amount as will
compensate such Bank or such controlling Person for such reduction.

      8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:

                                       22
<PAGE>
            (a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the interbank eurodollar market for such Interest
Period, or the Agent otherwise reasonably determines (which determination,
absent demonstrable error, shall be binding and conclusive on the Company) that
by reason of circumstances affecting the interbank eurodollar market adequate
and reasonable means do not exist for ascertaining the applicable Eurodollar
Rate; or

            (b) Banks having aggregate Pro Rata Shares of 25% or more advise the
Agent that the Eurodollar Rate (Reserve Adjusted) as determined by the Agent
will not adequately and fairly reflect the cost to such Banks of maintaining or
funding Eurodollar Loans for such Interest Period (taking into account any
amount to which such Banks may be entitled under Section 8.1) or that the making
or funding of Eurodollar Loans has become impracticable as a result of an event
occurring after the date of this Agreement which in the opinion of such Banks
materially affects such Loans;

then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Prime Rate Loan.

      8.3 Changes in Law Rendering Eurodollar Loans Unlawful. If any change in,
or the adoption of any new, law or regulation, or any change in the
interpretation of any applicable law or regulation by any governmental or other
regulatory body charged with the administration thereof, should make it (or in
the good faith judgment of any Bank cause a substantial question as to whether
it is) unlawful for any Bank to make, maintain or fund Eurodollar Loans, then
such Bank shall promptly notify each of the other parties hereto and, so long as
such circumstances shall continue, (a) such Bank shall have no obligation to
make or convert into Eurodollar Loans (but shall make Prime Rate Loans
concurrently with the making of or conversion into Eurodollar Loans by the Banks
which are not so affected, in each case in an amount equal to the amount of
Eurodollar Loans which would be made or converted into by such Bank at such time
in the absence of such circumstances) and (b) on the last day of the current
Interest Period for each Eurodollar Loan of such Bank (or, in any event, on such
earlier date as may be required by the relevant law, regulation or
interpretation), such Eurodollar Loan shall, unless then repaid in full,
automatically convert to a Prime Rate Loan. Each Prime Rate Loan made by a Bank
which, but for the circumstances described in the foregoing sentence, would be a
Eurodollar Loan (an "Affected Loan") shall remain outstanding for the same
period as the Group of Eurodollar Loans of which such Affected Loan would be a
part absent such circumstances.

      8.4 Funding Losses. The Company hereby agrees that upon demand by any Bank
(which demand shall be accompanied by a statement setting forth the basis for
the amount being claimed, a copy of which shall be furnished to the Agent), the
Company will indemnify such Bank against any net loss or expense which such Bank
may sustain or incur (including any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain any Eurodollar Loan), as reasonably determined by

                                       23
<PAGE>
such Bank, as a result of (a) any payment, prepayment or conversion of any
Eurodollar Loan of such Bank on a date other than the last day of an Interest
Period for such Loan (including any conversion pursuant to Section 8.3) or (b)
any failure of the Company to borrow, convert or continue any Loan on a date
specified therefor in a notice of borrowing, conversion or continuation pursuant
to this Agreement. For this purpose, all notices to the Agent pursuant to this
Agreement shall be deemed to be irrevocable.

      8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it so
elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or Affiliate of such Bank to make such Loan; provided that in such event
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or Affiliate.

      8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.

      8.7   Mitigation of Circumstances; Replacement of Banks.

            (a) Each Bank shall promptly notify the Company and the Agent of any
event of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Bank's good faith judgment,
otherwise disadvantageous to such Bank) to mitigate or avoid, (i) any obligation
by the Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the
occurrence of any circumstances described in Section 8.2 or 8.3 (and, if any
Bank has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the Company of) any event described in clause (i) or (ii) of the
preceding sentence and such designation will not, in such Bank's good faith
judgment, be otherwise disadvantageous to such Bank.

            (b) If the Company becomes obligated to pay additional amounts to
any Bank pursuant to Section 7.6 or 8.1, or any Bank gives notice of the
occurrence of any circumstances described in Section 8.2 or 8.3, the Company may
designate another bank which is acceptable to the Agent and the Issuing Bank in
their reasonable discretion (such other bank being called a "Replacement Bank")
to purchase the Loans of such Bank and such Bank's rights hereunder, without
recourse to or warranty by, or expense to, such Bank, for a purchase price equal
to the outstanding principal amount of the Loans payable to such Bank plus any
accrued but unpaid interest on such Loans and all accrued but unpaid fees owed
to such Bank and any other amounts

                                       24
<PAGE>
payable to such Bank under this Agreement, and to assume all the obligations of
such Bank hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Bank shall no longer be a party hereto or have any
rights hereunder (other than rights with respect to indemnities and similar
rights applicable to such Bank prior to the date of such purchase and
assumption) and shall be relieved from all obligations to the Company hereunder,
the Company shall be released from all further obligations to such Bank (other
than obligations with respect to indemnities and similar obligations applicable
to such Bank prior to the date of such purchase and assumption) and the
Replacement Bank shall succeed to the rights and obligations of such Bank
hereunder.

      8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, expiration or termination of the Letters of Credit
and termination of this Agreement.

      SECTION 9   WARRANTIES.

      To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue and participate in Letters of Credit
hereunder, the Company warrants to the Agent and the Banks that:

      9.1 Organization. The Company is a co-partnership validly existing and in
good standing under the laws of the State of Michigan and is duly qualified to
do business in each jurisdiction where, because of the nature of its activities
or properties, such qualification is required, except for such jurisdictions
where the failure to so qualify would not have a Material Adverse Effect.

      9.2 Authorization; No Conflict. The Company is duly authorized to execute
and deliver each Loan Document to which it is a party, the Company is duly
authorized to borrow monies hereunder and is duly authorized to perform its
obligations under each Loan Document to which it is a party. The execution,
delivery and performance by the Company of this Agreement and each Loan Document
to which it is a party, and the borrowings by the Company hereunder, do not and
will not (a) require any consent or approval of any governmental agency or
authority (other than any consent or approval which has been obtained and is in
full force and effect), (b) conflict with (i) any provision of law, (ii) the
charter, by-laws or other organizational documents of the Company or (iii) any
agreement, indenture, instrument or other document, or any judgment, order or
decree, which is binding upon the Company or any of its properties or (c)
require, or result in, the creation or imposition of any Lien on any asset of
the Company.

      9.3 Validity and Binding Nature. Each of this Agreement and each other
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy,

                                       25
<PAGE>
insolvency and similar laws affecting the enforceability of creditors' rights
generally and to general principles of equity.

      9.4 Financial Condition. The audited financial statements of the Company
as at February 28, 1999, copies of which have been delivered to each Bank, were
prepared in accordance with GAAP and present fairly the financial condition of
the Company as at such date and the results of its operations for the period
then ended.

      9.5 No Material Adverse Change. Since February 28, 1999 there has been no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company.

      9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding or governmental investigation or
proceeding is pending or, to the Company's knowledge, threatened against the
Company which might reasonably be expected to have a Material Adverse Effect,
except as set forth in Schedule 9.6. Other than any liability incident to such
litigation or proceedings, the Company has no material contingent liabilities
not listed on Schedule 9.6 or permitted by Section 10.7.

      9.7 Ownership of Properties; Liens. The Company owns good and, in the case
of real property, marketable title to all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like) except as permitted
by Section 10.8.

      9.8 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries.

      9.9 Pension Plans.

            (a) During the twelve-consecutive-month period prior to the date of
the execution and delivery of this Agreement or the making of any Loan or the
issuance of any Letter of Credit, (i) no steps have been taken to terminate any
Pension Plan and (ii) no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by the Company of any material
liability, fine or penalty.

            (b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the Company or any other member of
the Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan or
received notice of any claim or demand for withdrawal liability or partial

                                       26
<PAGE>
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.

      9.10 Investment Company Act. The Company is not an "investment company" or
a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940.

      9.11 Public Utility Holding Company Act. The Company is not a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935.

      9.12 Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.

      9.13 Taxes. The Company has filed all tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.

      9.14 Solvency, etc. On the Closing Date, and immediately prior to and
after giving effect to the issuance of each Letter of Credit and each borrowing
hereunder and the use of the proceeds thereof, (a) the Company's assets will
exceed its liabilities and (b) the Company will be solvent, will be able to pay
its debts as they mature, will own property with fair saleable value greater
than the amount required to pay its debts and will have capital sufficient to
carry on its business as then constituted.

      9.15  Environmental Matters.

            (a) No Violations. To the best of the Company's knowledge, except as
set forth on Schedule 9.15, neither the Company, nor any operator of the
Company's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 or any other Environmental Law.

                                       27
<PAGE>
            (b) Notices. Except as set forth on Schedule 9.15 and for matters
arising after the Closing Date, in each case none of which could singly or in
the aggregate be expected to have a Material Adverse Effect, the Company has not
received written notice from any third party, including any Federal, state or
local governmental authority: (a) that any one of them has been identified by
the U.S. Environmental Protection Agency as a potentially responsible party
under CERCLA with respect to a site listed on the National Priorities List, 40
C.F.R. Part 300 Appendix B; (b) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substance as defined by 42 U.S.C.
Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Section 9601(33) or any toxic substance, oil or hazardous material or other
chemical or substance regulated by any Environmental Law (all of the foregoing,
"Hazardous Substances") which any one of them has generated, transported or
disposed of has been found at any site at which a Federal, state or local agency
or other third party has conducted a remedial investigation, removal or other
response action pursuant to any Environmental Law; (c) that the Company must
conduct a remedial investigation, removal, response action or other activity
pursuant to any Environmental Law; or (d) of any Environmental Claim.

            (c) Handling of Hazardous Substances. To the best of the Company's
knowledge, except as set forth on Schedule 9.15, (i) no portion of the real
property or other assets of the Company has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance in
all material respects with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is located
on such properties; (ii) in the course of any activities conducted by the
Company or the operators of any real property of the Company, no Hazardous
Substances have been generated or are being used on such properties except in
accordance in all material respects with applicable Environmental Laws; (iii)
there have been no Releases or threatened Releases of Hazardous Substances on,
upon, into or from any real property or other assets of the Company, which
Releases singly or in the aggregate might reasonably be expected to have a
Material Adverse Effect; (iv) there have been no Releases on, upon, from or into
any real property in the vicinity of the real property or other assets of the
Company which, through soil or groundwater contamination, may have come to be
located on, and which might reasonably be expected to have a Material Adverse
Effect; and (v) any Hazardous Substances generated by the Company have been
transported offsite only by properly licensed carriers and delivered only to
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are operating in compliance in all material respects with such permits and
applicable Environmental Laws.

      9.16 Year 2000 Problem. The Company (a) has reviewed the areas within its
business and operations which could be adversely affected by, and has developed
or is developing a program to address on a timely basis, the Year 2000 Problem
and (b) has made appropriate inquiries as to the effect the Year 2000 Problem
will have on its material suppliers and customers. Based on such review, program
and inquiries, the Company reasonably believes that the "Year 2000 Problem" will
not have a Material Adverse Effect.

                                       28
<PAGE>
      9.17 Insurance. Set forth on Schedule 9.17 is a complete and accurate
summary of the property and casualty insurance program of the Company as of the
Closing Date (including the names of all insurers, policy numbers, expiration
dates, amounts and types of coverage, annual premiums, exclusions, deductibles,
self-insured retention, and a description in reasonable detail of any
self-insurance program, retrospective rating plan, fronting arrangement or other
risk assumption arrangement involving the Company). The Company's insurance
program complies with the requirements of Section 10.3(b) hereof.

      9.18 Real Property. Set forth on Schedule 9.18 is a complete and accurate
list, as of the Closing Date, of the address of all real property owned or
leased by the Company, together with, in the case of leased property, the name
and mailing address of the lessor of such property.

      9.19 Information. All information heretofore or contemporaneously herewith
furnished in writing by the Company to the Agent or any Bank for purposes of or
in connection with this Agreement and the transactions contemplated hereby is,
and all written information hereafter furnished by or on behalf of the Company
to the Agent or any Bank pursuant hereto or in connection herewith will be, true
and accurate in all material respects on the date as of which such information
is dated or certified, and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading in light of the circumstances under which made (it being recognized
by the Agent and the Banks that any projections and forecasts provided by the
Company are based on good faith estimates and assumptions believed by the
Company to be reasonable as of the date of the applicable projections or
assumptions and that actual results during the period or periods covered by any
such projections and forecasts may differ from projected or forecasted results).

      9.20 Intellectual Property. The Company owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights and
copyrights as are necessary for the conduct of the business of the Company,
without any infringement upon rights of others which could reasonably be
expected to have a Material Adverse Effect.

      9.21 Burdensome Obligations. The Company is not a party to any agreement
or contract or subject to any corporate or partnership restriction which might
reasonably be expected to have a Material Adverse Effect.

      9.22 Labor Matters. Except as set forth on Schedule 9.22, the Company is
not subject to any labor or collective bargaining agreement. There are no
existing or, to the best of the Company's knowledge, threatened, strikes,
lockouts or other labor disputes involving the Company that singly or in the
aggregate could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment made to employees of the Company are not in violation of
the Fair Labor Standards Act or any other applicable law, rule or regulation
dealing with such matters.

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<PAGE>
      9.23 No Default. No Event of Default or Unmatured Event of Default exists
or would result from the incurring by the Company of any Debt hereunder or under
any other Loan Document.

      SECTION 10  COVENANTS.

      Until the expiration or termination of the Commitments and thereafter
until all obligations of the Company hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:

      10.1 Reports, Certificates and Other Information. Furnish to the Agent and
each Bank:

            10.1.1 Annual Report. Promptly when available and in any event
within 90 days after the close of each Fiscal Year, a copy of the annual audit
report of the Company for such Fiscal Year, including therein balance sheets and
statements of earnings and cash flows of the Company as at the end of such
Fiscal Year, certified without qualification by independent auditors of
recognized standing selected by the Company and reasonably acceptable to the
Required Banks, together with (i) a written statement from such accountants to
the effect that in making the examination necessary for the signing of such
annual audit report by such accountants, nothing came to their attention that
caused them to believe that the Company was not in compliance with any provision
of Section 10.6 or 10.7 of this Agreement insofar as such provision relates to
accounting matters or, if something has come to their attention that caused them
to believe that the Company was not in compliance with any such provision,
describing such non-compliance in reasonable detail and (ii) a comparison with
the budget for such Fiscal Year and a comparison with the previous Fiscal Year.

            10.1.2 Interim Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter of each Fiscal Year), balance sheets of the Company as of the end of
such Fiscal Quarter, together with statements of earnings and cash flows for
such Fiscal Quarter and for the period beginning with the first day of such
Fiscal Year and ending on the last day of such Fiscal Quarter, together with a
comparison with the corresponding period of the previous Fiscal Year and a
comparison with the budget for such period of the current Fiscal Year, certified
by an authorized officer of the Company.

            10.1.3 Compliance Certificates. Contemporaneously with the
furnishing of a copy of each annual audit report pursuant to Section 10.1.1 and
each set of quarterly statements pursuant to Section 10.1.2, a duly completed
compliance certificate in the form of Exhibit E, with appropriate insertions,
dated the date of such annual report or such quarterly statements and signed by
an authorized officer of the Company, containing (i) a computation of each of
the financial ratios and restrictions set forth in Section 10.6 and to the
effect that such officer has not become aware of any Event of Default or
Unmatured Event of Default that has occurred and is continuing or, if there is
any such event, describing it and the steps, if any, being taken to cure it

                                       30
<PAGE>
and (ii) a written statement of the Company's management setting forth a
discussion of the Company's financial condition, changes in financial condition
and results of operations.

            10.1.4 Notice of Default, Litigation and ERISA Matters. Promptly
upon becoming aware of any of the following, written notice describing the same
and the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:

                  (a) the occurrence of an Event of Default or an Unmatured
Event of Default;

                  (b) any litigation, arbitration or governmental investigation
or proceeding not previously disclosed by the Company to the Banks which has
been instituted or, to the knowledge of the Company, is threatened against the
Company or to which any of its properties is subject which might reasonably be
expected to have a Material Adverse Effect;

                  (c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan, or the
failure of any member of the Controlled Group to make a required contribution to
any Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multi employer Pension Plan, or the taking of
any action with respect to a Pension Plan which could result in the requirement
that the Company furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan or Multi
employer Pension Plan which could result in the incurrence by any member of the
Controlled Group of any material liability, fine or penalty (including any claim
or demand for withdrawal liability or partial withdrawal from any Multi employer
Pension Plan), or any material increase in the contingent liability of the
Company with respect to any post-retirement welfare plan benefit, or any notice
that any Multi employer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of an excise tax, that any such plan is or has been funded at a rate
less than that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent;

                  (d) any cancellation or material change in any insurance
maintained by the Company; or

                  (e) any other event (including (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or (ii) the
enactment or effectiveness of any law, rule or regulation) which might
reasonably be expected to have a Material Adverse Effect.

            10.1.5 Maximum Available Amount Certificates. Within 15 days of the
end of each month, a Maximum Available Amount Certificate dated as of the end of
such month and executed by an authorized officer of the Company on behalf of the
Company, provided that at any time an Event of Default exists, the Agent may
require the Company to deliver Maximum Available Amount Certificates more
frequently.

                                       31
<PAGE>
            10.1.6 Management Reports. Promptly upon the request of the Agent or
any Bank, copies of all detailed financial and management reports submitted to
the Company by independent auditors in connection with each annual or interim
audit made by such auditors of the books of the Company.

            10.1.7 Construction Reports. (a) Monthly, a certificate of the
Company, in form and substance reasonably satisfactory to the Agent, reflecting
the current construction schedules and construction budgets for all of the
Company's projects with costs of more than $5,000,000 then under construction
(such certificates shall be for the Banks' information purposes only and (b)
quarterly, a report, in form and substance reasonably satisfactory to the Agent,
detailing the status of each of the Company's projects then under construction,
including the original construction budget, all revised budgets, the reasons for
all variances, costs paid to date, percentage of completion and the costs to
complete.

            10.1.8 Subordinated Debt Notices. Promptly after receipt thereof,
copies of any notices (including notices of default or acceleration) received
from any holder or trustee of, under or with respect to any Subordinated Debt.

            10.1.9 Year 2000 Problem. Promptly upon the request of the Agent or
any Bank, such updated information or documentation as may be requested from
time to time regarding the efforts of the Company to address the Year 2000
Problem.

            10.1.10 Other Information. Promptly from time to time, such other
information concerning the Company as any Bank or the Agent may reasonably
request.

      10.2 Books, Records and Inspections. Keep its books and records in
accordance with sound business practices sufficient to allow the preparation of
financial statements in accordance with GAAP; permit any Bank or the Agent or
any representative thereof to inspect the properties and operations of the
Company; and at any reasonable time and with reasonable notice (or at any time
without notice if an Event of Default exists), any Bank or the Agent or any
representative thereof to visit any or all of its offices, to discuss its
financial matters with its officers and its independent auditors (and the
Company hereby authorizes such independent auditors to discuss such financial
matters with any Bank or the Agent or any representative thereof), and to
examine (and, at the expense of the Company, photocopy extracts from) any of its
books or other records; and permit the Agent and its representatives to inspect
the tangible assets of the Company and to inspect, audit, check and make copies
of and extracts from the books, records, computer data, computer programs,
journals, orders, receipts, correspondence and other data relating to the assets
of the Company. All such inspections or audits by the Agent shall be at the
Company's expense. The Agent and the Banks shall use reasonable efforts to
coordinate all such inspections and audits so as to minimize any disruption of
the Company's business.

      10.3  Maintenance of Property; Insurance.

                                       32

<PAGE>
            (a) Keep all property useful and necessary in the business of the
Company in good working order and condition, ordinary wear and tear excepted.

            (b) Maintain with responsible insurance companies, such insurance as
may be required by any law or governmental regulation or court decree or order
applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated, but which shall insure against all risks and liabilities of the type
identified on Schedule 9.17 and shall have insured amounts no less than, and
deductibles no higher than, those set forth on such schedule; and, upon request
of the Agent or any Bank, furnish to the Agent or such Bank a certificate
setting forth in reasonable detail the nature and extent of all insurance
maintained by the Company. The Company shall cause each issuer of an insurance
policy to provide the Agent with an endorsement (i) showing loss payable to the
Agent with respect to each policy of property or casualty insurance, as its
interests, if any, may appear, and naming the Agent and each Bank as an
additional insured with respect to each policy of insurance for liability for
personal injury or property damage, (ii) providing that 30 days' notice will be
given to the Agent prior to any cancellation of, material reduction or change in
coverage provided by or other material modification to such policy and (iii)
reasonably acceptable in all other respects to the Agent.

      10.4  Compliance with Laws; Payment of Taxes and Liabilities.

            (a) Comply in all material respects with all applicable laws, rules,
regulations, decrees, orders, judgments, licenses and permits, except where
failure to comply could not reasonably be expected to have a Material Adverse
Effect; and (b) pay prior to delinquency, all taxes and other governmental
charges against it or any of its property, as well as claims of any kind which,
if unpaid, might become a Lien on any of its property; provided that the
foregoing shall not require the Company to pay any such tax or charge so long as
it shall contest the validity thereof in good faith by appropriate proceedings
and shall set aside on its books adequate reserves with respect thereto in
accordance with GAAP.

      10.5 Maintenance of Existence, etc. Maintain and preserve (a) its
existence and good standing in the jurisdiction of its organization and (b) its
qualification to do business and good standing in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect).

      10.6  Financial Covenants.

            10.6.1 Fixed Charge Coverage Ratio. Not permit the Fixed Charge
Coverage Ratio for any Computation Period to be less than 2:00 to 1.

            10.6.2 Debt to EBITDA Ratio. Not permit the Debt to EBITDA Ratio as
of the last day of any Computation Period (a) prior to February 28, 2002 to
exceed 4:00 to 1 or (b) to exceed 3.5 to 1 at any time from and after February
28, 2002.

                                       33
<PAGE>
            10.6.3 Tangible Net Worth. Not permit Tangible Net Worth to be less
than $20,000,000 at any time, provided that such minimum Tangible Net Worth
requirement shall be increased by 15% of the Company's net profit each year,
commencing with the Fiscal Year ending February 28, 2000, provided that the
Company's current investment in Star Southfield may be included in the
calculation of Tangible Net Worth only so long as there is no default with
respect to Star Southfield's indebtedness to MNB.

      10.7 Limitations on Debt, Guaranties and Sales. Not create, incur, assume
or suffer to exist any Debt, except:

            (a) obligations under this Agreement and the other Loan Documents;
or

            (b) Subordinated Debt from Affiliates of the Company;

nor will it make, or permit to remain outstanding, loans or advances to or
become or remain a guarantor or surety or pledge its credit or become liable in
any manner (except by endorsement for deposit in the normal course of business)
on undertakings of others, nor will it sell, lease, transfer or otherwise
dispose of any of its assets to any Person, except (a) to the extent that,
during any Fiscal Year, the sum of the principal amount of any such Debt
incurred, the liability incurred on undertakings of others and the fair market
value of any assets so disposed of during such Fiscal Year does not exceed
$1,000,000.00, (b) for dispositions of property in the ordinary course of its
business, (c) as may be permitted pursuant to Section 10.8, and (d) except for
the Company's existing guaranty of the indebtedness of Star Southfield to MNB.

      10.8 Investments. Not make any future loan to, or investment in, any
Person related to the Company, which in the aggregate exceed $1,000,000.00 at
any time, except loans and investments that are consistent with the Purposes and
have received prior written approval from the Required Banks, provided, however,
that such Bank approval shall not be required with respect to related Persons
who own motion picture theaters which are leased to the Company and/or short
term advances to the Company's Affiliates to cover operating expenses incurred
by such Affiliates on behalf of the Company in the ordinary course of the
Company's business.

      10.9 Liens. Not create or permit to exist any Lien on any of its real or
personal properties, assets or rights of whatsoever nature (whether now owned or
hereafter acquired), except:

            (a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;

            (b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety

                                       34
<PAGE>
bonds, bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving any
deposits or advances or borrowed money or the deferred purchase price of
property or services and, in each case, for which it maintains adequate
reserves; and

            (c)   Liens described on Schedule 10.9, if any.

      10.10 Restricted Payments. Not (a) make any distribution to any of its
partners, or (b) purchase or redeem any of its partnership interests or other
equity interests or any warrants, options or other rights in respect thereof.
Notwithstanding the foregoing, so long as no Event of Default or Unmatured Event
of Default exists and the aggregate outstanding Loans and Letters of Credit doe
not exceed the Maximum Available Amount, the Company may make cash distributions
to its partners to the extent permitted by applicable law.

      10.11 Mergers, Consolidations, Sales. Not be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or any substantial part of its
assets, or sell or assign with or without recourse any receivables, except (a)
where the aggregate cost of any transaction done in the furtherance of the
Company's motion picture theatre business does not exceed $5,000,000 and (b) the
short term investment of excess cash in marketable instruments.

      10.12 Partnership and Management Continuation. Continue either James Loeks
or Barrie Lawson Loeks (the "Loeks"), either individually or through one or more
entities owned and controlled by the Loeks, as 50% partners of the Company, with
their current management duties and rights; or if the Loeks interest in the
Company falls below 50%, then Loews Cineplex Entertainment Corporation or one of
its wholly-owned subsidiaries, must directly or indirectly continue to be a 50%
partner of the Company, with management duties and rights materially similar to
those currently held by the Loeks.

      Notwithstanding anything contained herein to the contrary, if, within ten
(10) days after it receives notice that the Loeks, either individually or
through one or more entities owned and controlled by the Loeks, become less than
a 50% partner of the Company, with their current management duties and rights;
or that the Loeks interest in the Company falls below 50%, Old Kent Bank
notifies the Company, the Agent and the other Banks, in writing, that such
change is not, in good faith, acceptable to it, the Agent shall have 90 days
from the date such notice is received to find one or more other institutional
lenders (the "OKB Substitutes") to assume all of Old Kent Bank's interest
hereunder pursuant to agreements satisfactory to all of the parties. To the
extent that Old Kent Bank's Pro Rata Share does not exceed 18.5%, if any part of
Old Kent Bank's interest has not been assumed within such 90-day period, and no
Event of Default or Unmatured Event of Default then exists, such part shall be
paid in full and the Maximum Available Amount shall be reduced by the percentage
determined by dividing the amount of the unassumed part by the Maximum Available
Amount. Such reduction in the Maximum Available

                                       35
<PAGE>
Amount shall remain in effect until OKB Substitutes shall assume the balance of
Old Kent Bank's interest hereunder.

      In the event that Old Kent Bank's interest is assumed and/or reduced
pursuant to this Section 10.12, then Old Kent Bank shall forthwith remit to the
Agent the pro rata portion of any commitment fee, letter of credit fee or other
fee Old Kent Bank received under this Agreement that is allocable to the period
after such assumption and/or reduction, and the Agent shall pay such sum to the
Company and/or the OKB Substitutes, as the case may be.

      10.13 Project Agreements. Prior to entering into any binding agreement
with respect to any project with a total cost greater than $5,000,000, promptly
provide to the Banks cost estimates and an explanation of the sources of funds
to pay for the project. Required Banks shall have 7 Business Days after
receiving such information to approve or object to any such project, provided
that the Banks shall approve the project if the Banks are reasonably satisfied
that the remaining availability under the Commitments plus cash available in the
Company are sufficient to complete the proposed project, to complete any
existing projects and to maintain the financial covenants set forth in this
Agreement. Nor will the Company enter into any binding contract or similar
document with any general contractor or construction manager with respect to any
project which will cost more than $5,000,000.00 without first obtaining prior
approval of such general contractor or construction manager from the Required
Banks , provided, however, if the Required Banks do not object to such general
contractor or construction manager within 5 Business Days after obtaining all
information about such general contractor or construction manager deemed
relevant by the Agent, acting in good faith, the Required Banks shall be deemed
to have approved such general contractor or construction manager.

      10.14 Leases. Not enter into any Lease requiring aggregate rental to
exceed $1,000,000 during any one year which occurs during the term of this
Agreement, without first obtaining prior approval of the Required Banks as to
the form and substance of such Lease, provided, however, if the Required Banks
do not object to such Lease within 5 Business Days after obtaining a copy of the
proposed Lease, the Required Banks shall be deemed to have approved such Lease.

      10.15 Negative Pledge Agreements. Not enter into any agreement with any
Person that would now or hereafter prohibit the Company from pledging,
mortgaging or otherwise encumbering all or any part of its tangible or
intangible assets to secure the obligations and indebtedness incurred under this
Agreement and the other Loan Documents.

      10.16 Use of Proceeds. Not permit or suffer any proceeds of the Loans to
be used for other than the following purposes (the "Purposes"), namely, to pay
off the Company's existing indebtedness to MNB and to provide financing for the
operation, acquisition, construction and/or refurbishment of motion picture
theatres (and adjoining, related restaurants and/or retail stores) within the
United States.

      10.17 Modification of Organizational Documents. Not permit the Certificate
of Co-Partnership or Partnership Agreement or other organizational documents of
the Company to be

                                       36
<PAGE>
amended or modified in any way which might reasonably be expected to materially
adversely affect the interests of the Banks.

      10.18 Transactions with Affiliates. Not enter into, or cause, suffer or
permit to exist any transaction, arrangement or contract with any of its
Affiliates which is on terms which are less favorable than are obtainable from
any Person which is not one of its Affiliates.

      10.19 Employee Benefit Plans. Maintain each Pension Plan in substantial
compliance with all applicable requirements of law and regulations.

      10.20 Environmental Matters.

            (a) If any Release or Disposal of Hazardous Substances shall occur
or shall have occurred on any real property or any other assets of the Company,
cause the prompt containment and removal of such Hazardous Substances and the
remediation of such real property or other assets as necessary to comply with
all Environmental Laws applicable to the Company and to avoid a Material Adverse
Effect. Without limiting the generality of the foregoing, the Company shall
comply with any valid Federal or state judicial or administrative order
requiring the performance at any real property of the Company of activities in
response to the Release or threatened Release of a Hazardous Substance.

            (b) To the extent that the transportation of "hazardous waste" as
defined by RCRA is permitted by this Agreement, the Company shall dispose of
such hazardous waste only at licensed disposal facilities operating in
compliance with Environmental Laws.

      10.21 Inconsistent Agreements. Not enter into any agreement containing any
provision which would be violated or breached by any borrowing or request for a
Letter of Credit by the Company hereunder or by the performance by the Company
of any of its obligations hereunder or under any other Loan Document.

      10.22 Business Activities. Not engage in any line of business other than
the operation, acquisition, construction and/or refurbishment of motion picture
theatres (and adjoining, related restaurants and/or retail stores) within the
United States.

      10.23 Restriction of Amendments to Certain Documents. Not amend or
otherwise modify, or waive any rights under, Leases if, in any case, such
amendment, modification or waiver could be adverse to the interests of the
Banks.

      10.24 Fiscal Year.  Not change its Fiscal Year.

      10.25 Interest Rate Hedging Transactions. Notwithstanding anything to the
contrary contained in this Agreement, the Company may enter with any of the
Banks into one or more interest rate swap agreements, cap agreements or collar
agreements, and any other agreement or arrangement designed to protect the
Company against fluctuations in interest rates.

                                       37
<PAGE>
      SECTION 11  EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

      The obligation of each Bank to make its Loans and of the Issuing Bank to
issue Letters of Credit is subject to the following conditions precedent:

      11.1 Initial Credit Extension. The obligation of the Banks to make the
initial Loans and the obligation of the Issuing Bank to issue its initial Letter
of Credit (whichever first occurs) is, in addition to the conditions precedent
specified in Section 11.2, subject to the conditions precedent that (1) all
existing indebtedness of the Company to MNB will be deemed to be Revolving Loans
hereunder as provided in Section 14.14, and that all agreements and instruments
governing such indebtedness have been (or concurrently with the initial
borrowing will be) terminated and (2) the Agent shall have received all of the
following, each duly executed and dated the Closing Date (or such earlier date
as shall be satisfactory to the Agent), in form and substance satisfactory to
the Agent (and the date on which all such conditions precedent have been
satisfied or waived in writing by the Agent and the Required Banks is called the
"Closing Date"):

            11.1.1 Notes.  The Notes.

            11.1.2 Resolutions. Certified copies of resolutions of the Company
authorizing the execution, delivery and performance by the Company of this
Agreement, the Notes and the other Loan Documents to which the Company is a
party.

            11.1.3 Consents, etc. Certified copies of all documents evidencing
any necessary corporate or partnership action, consents and governmental
approvals (if any) required for the execution, delivery and performance by the
Company of the documents referred to in this Section 11.

            11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary (or other appropriate representative) of the
Company certifying the names of the officer or officers of such entity
authorized to sign the Loan Documents, together with a sample of the true
signature of each such officer (it being understood that the Agent and each Bank
may conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein).

            11.1.5 Opinions of Counsel. The opinions of counsel to the Company,
in form and substance satisfactory to the Banks.

            11.1.6 Insurance. Evidence satisfactory to the Agent of the
existence of insurance required to be maintained pursuant to Section 10.3(b),
together with evidence that the Agent has been named as a lender's loss payee,
if required, and an additional insured on all related insurance policies.

                                       38
<PAGE>
            11.1.7 Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with all Attorney Costs of the Agent to the extent
invoiced prior to the Closing Date, plus such additional amounts of Attorney
Costs as shall constitute the Agent's reasonable estimate of Attorney Costs
incurred or to be incurred by the Agent through the closing proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between the Company and the Agent).

            11.1.8 Maximum Available Amount Certificate. A Maximum Available
Amount Certificate dated as of the Closing Date.

            11.1.9 Other. Such other documents as the Agent or any Bank may
reasonably request.

      11.2 Conditions. The obligation (a) of each Bank to make each Loan and (b)
of the Issuing Bank to issue each Letter of Credit is subject to the following
further conditions precedent that:

            11.2.1 Compliance with Warranties, No Default, etc. Both before and
after giving effect to any borrowing and the issuance of any Letter of Credit,
the following statements shall be true and correct:

                  (a) the representations and warranties of the Company set
forth in this Agreement and the other Loan Documents shall be true and correct
in all material respects with the same effect as if then made (except to the
extent stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date); and

                  (b) no Event of Default or Unmatured Event of Default shall
have then occurred and be continuing.

            11.2.2 Confirmatory Certificate. If requested by the Agent or any
Bank, the Agent shall have received (in sufficient counterparts to provide one
to each Bank) a certificate dated the date of such requested Loan or Letter of
Credit and signed by a duly authorized representative of the Company as to the
matters set out in Section 11.2.1 (it being understood that each request by the
Company for the making of a Loan or the issuance of a Letter of Credit shall be
deemed to constitute a warranty by the Company that the conditions precedent set
forth in Section 11.2.1 will be satisfied at the time of the making of such Loan
or the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.

      SECTION 12  EVENTS OF DEFAULT AND THEIR EFFECT.

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<PAGE>
      12.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:

            12.1.1 Non-Payment of the Loans, etc. Default in the payment when
due of the principal of any Loan; or default, and continuance thereof for five
days, in the payment when due of any interest, fee, reimbursement obligation
with respect to any Letter of Credit or other amount payable by the Company
hereunder or under any other Loan Document; or,

            12.1.2 Non-Payment of Other Indebtedness. Default in the payment,
when due, of any installment of principal or interest on any other indebtedness
for borrowed money of the Company to any Bank or to any other Person, and
continuance thereof beyond the period of grace, if any, applicable thereto,
provided that no such grace period shall be longer than 60 days; or default in
the observance or performance of any term, covenant or agreement of the Company
contained in any instrument or agreement relating to such indebtedness, if the
effect of such default is to cause the holder or holders thereof (or a trustee
on behalf of such holder or holders) to cause the indebtedness to become due
prior to its stated maturity; or,

            12.1.3 Other Defaults. Default in the observance or performance of
any other agreement of the Company herein set forth or set forth in any of the
other Loan Documents and the continuance thereof beyond 30 days after the Agent
gives the Company notice of such default, provided, however, if such default is
curable in the reasonable judgement of the Agent, but not within 30 days, so
long as the Company commences and diligently pursues appropriate curative action
within such 30 days, it shall have such additional time to cure such default as
the Agent reasonably determines, but in no event more than an additional 60
days; or,

            12.1.4. Lease Defaults. Default by Company under any Lease, and
continuance thereof beyond the period of grace, if any, applicable thereto, if
the effect of such default is to cause the landlord under such Lease to take
action to terminate the Lease and/or recover possession of the leased premises
from Company; or,

            12.1.5 Misrepresentations. Any representation or warranty made by
the Company herein proves untrue in any material respect or any of the
information or other materials furnished by the Company to the Banks in
connection with the making of the Loans shall prove false in any material
respect; or

            12.1.6 Company's Existence. Termination of the Company's existence
under state law unless the Company is promptly reconstituted thereafter; or

            12.1.7 Bankruptcy, Etc. The Company shall generally not pay its
debts as they become due or shall admit in writing its inability to pay its
debts generally, or shall make an assignment for the benefit of creditors or
consents to the appointment of a trustee or receiver for itself or for the
greater part of its properties; or a trustee or receiver is appointed for the
Company or for the greater part of any of its properties without its consent and
is not discharged within 60 days; or bankruptcy, reorganization or liquidation
proceedings under bankruptcy or similar laws

                                       40
<PAGE>
are instituted by or against the Company, are consented to by it or remain
undismissed for 60 days, or a receiver, conservator, liquidating agent or
committee or governmental authority shall be appointed for or take possession or
charge of the Company or its business or assets, or the rights, privileges and
franchises of the Company shall be finally adjudicated forfeited by any
governmental authority; or

            12.1.8 Judgements. A judgment or order for the payment of money for
$500,000 or more shall be rendered against the Company and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order and such judgment or order shall have remained unsatisfied and
such proceedings shall have remained unstayed for a period of 20 consecutive
days, or (ii) for a period of 20 consecutive days, such judgment shall have
remained unsatisfied and a stay of enforcement of such judgment or order, by
reason of pending appeal or otherwise, shall not have been in effect; or

            12.1.9 Invalidity, Etc. The validity or enforceability of this
Agreement against the Company shall be contested by the Company or any
governmental agency or authority, or the Company shall deny that it has any or
further liability or obligation under this Agreement; or

            12.1.10 Reportable Events. The occurrence of any "reportable event,"
as defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which could constitute grounds for termination by the Pension Benefit
Guaranty Corporation ("PBGC") of any employee benefit plan maintained by or on
behalf of the Company or any member of a controlled group of which the Company
is a member which together with the Company would be treated as a single
employer under Section 4001 of ERISA, or for the appointment by the appropriate
United States District Court of a trustee to administer such plan, and such
reportable event is not corrected within 30 days after the occurrence thereof;
or the institution of proceedings by the PBGC to terminate any such plan or to
appoint a trustee to administer such plan; or termination of any such plan or
the appointment of a trustee by the appropriate United States District Court to
administer any such plan.

      12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.7 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to Cash Collateralize all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Loans and all other obligations
hereunder to be due and payable and/or demand that the Company immediately Cash
Collateralize all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Loans and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to Cash Collateralize all Letters of
Credit, all without presentment, demand, protest or notice of any kind. The
Agent shall promptly advise the Company of any such declaration, but failure to
do so shall not impair the effect of such

                                       41
<PAGE>
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event described in Section 12.1.1 or Section 12.1.7 may be waived by the
written concurrence of all of the Banks, and the effect as an Event of Default
of any other event described in this Section 12 may be waived by the written
concurrence of the Required Banks. Any cash collateral delivered hereunder shall
be held by the Agent (without liability for interest thereon) and applied to
obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may require.

      SECTION 13  THE AGENT.

      13.1  Appointment and Authorization.

            (a) Each Bank hereby irrevocably (subject to Section 13.9) appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duty or responsibility except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.

            (b) The Issuing Bank shall act on behalf of the Banks with respect
to any Letters of Credit issued by it and the documents associated therewith.
The Issuing Bank shall have all of the benefits and immunities (i) provided to
the Agent in this Section 13 with respect to any acts taken or omissions
suffered by the Issuing Bank in connection with Letters of Credit issued by it
or proposed to be issued by it and the applications and agreements for letters
of credit pertaining to such Letters of Credit as fully as if the term "Agent",
as used in this Section 13, included the Issuing Bank with respect to such acts
or omissions and (ii) as additionally provided in this Agreement with respect to
the Issuing Bank.

      13.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

      13.3 Liability of Agent. None of the Agent nor any of its directors,
officers, employees or agents shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct), or (ii) be responsible in any

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<PAGE>
manner to any of the Banks for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of the Company, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Company or any of the Company's Subsidiaries or
Affiliates.

      13.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, confirmation from the Banks of their obligation to indemnify the
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.

      13.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Unmatured Event of Default
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the Agent
shall have received written notice from a Bank or the Company referring to this
Agreement, describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default". The Agent will notify the
Banks and the Company of its receipt of any such notice. The Agent shall take
such action with respect to such Event of Default or Unmatured Event of Default
as may be requested by the Required Banks in accordance with Section 12;
provided that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Banks.

      13.6 Credit Decision. Each Bank acknowledges that the Agent has not made
any representation or warranty to it, and that no act by the Agent hereafter
taken, including any review of the affairs of the Company and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Bank. Each Bank represents to the Agent that it

                                       43
<PAGE>
has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries, and made its own decision to enter into this Agreement and to
extend credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial or other condition or creditworthiness of the Company which may come
into the possession of the Agent.

      13.7 Indemnification. Whether or not the transactions contemplated hereby
are consummated, each Bank shall indemnify upon demand the Agent and its
directors, officers, employees and agents (to the extent not reimbursed by or on
behalf of the Company and without limiting the obligation of the Company to do
so), pro rata, from and against any and all Indemnified Liabilities (as defined
in Section 14.12 hereof); provided that no Bank shall be liable for any payment
to any such Person of any portion of the Indemnified Liabilities resulting from
such Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse the Agent upon demand for its ratable share
of any costs or out-of-pocket expenses (including Attorney Costs) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, expiration or termination of the Letters of Credit, or
modification, release or discharge of, any or all of the Loan Documents,
termination of this Agreement and the resignation or replacement of the Agent.

      13.8 Agent in Individual Capacity. MNB and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though MNB were not the Agent or the Issuing Bank
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, MNB or its Affiliates may receive information
regarding the Company or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Company or such
Affiliate) and acknowledge that the Agent shall be under no obligation to
provide such information to them, unless otherwise obligated to provide such
information pursuant to the terms of this Agreement. With respect to their Loans
(if any),

                                       44
<PAGE>
MNB and its Affiliates shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though MNB were not the
Agent and the Issuing Bank, and the terms "Bank" and "Banks" include MNB and its
Affiliates, to the extent applicable, in their individual capacities.

      13.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice
to the Banks and may be removed at any time by the Required Banks. If the Agent
resigns under this Agreement or is so removed, the Required Banks shall, with
(so long as no Event of Default exists) the consent of the Company (which shall
not be unreasonably withheld or delayed), appoint from among the Banks a
successor agent for the Banks. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent, and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 13 and Sections 14.6 and 14.13 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above.

      13.10 Collateral Matters. The Banks irrevocably authorize the Agent, at
its option and in its discretion, (a) to release any Lien granted to or held by
the Agent under any collateral document (i) upon termination of the Commitments
and payment in full of all Loans and all other obligations of the Company
hereunder and the expiration or termination of all Letters of Credit; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder; or (iii) subject to Section
14.1, if approved, authorized or ratified in writing by the Required Banks; or
(b) to subordinate its interest in any collateral to any holder of a Lien on
such collateral which is permitted hereunder (it being understood that the Agent
may conclusively rely on a certificate from the Company in determining whether
the Debt secured by any such Lien is permitted hereunder). Upon request by the
Agent at any time, the Banks will confirm in writing the Agent's authority to
release, or subordinate its interest in, particular types or items of collateral
pursuant to this Section 13.10.

      SECTION 14  GENERAL.

      14.1 Waiver; Amendments. No delay on the part of the Agent or any Bank in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by Banks
having

                                       45
<PAGE>
an aggregate Pro Rata Share of not less than the aggregate Pro Rata Share
expressly designated herein with respect thereto or, in the absence of such
designation as to any provision of this Agreement or the Notes, by the Required
Banks, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No amendment, modification, waiver or consent shall change the Pro Rata
Share of any Bank without the consent of such Bank. No amendment, modification,
waiver or consent shall (i) increase the Revolving Commitment Amount, (ii)
extend the date for payment of any principal of or interest on the Loans or any
fees payable hereunder, (iii) reduce the principal amount of any Loan, the rate
of interest thereon or any fees payable hereunder, (iv) reduce the aggregate Pro
Rata Share required to effect an amendment, modification, waiver or consent, or
(v) change the definition of EBITDA, without, in each case, the consent of all
Banks. No provision of Section 13 or other provision of this Agreement affecting
the Agent in its capacity as such shall be amended, modified or waived without
the consent of the Agent. No provision of this Agreement relating to the rights
or duties of the Issuing Bank in its capacity as such shall be amended, modified
or waived without the consent of the Issuing Bank.

      14.2 Confirmations. The Company and each holder of a Note agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.

      14.3 Notices. Except as otherwise provided in Sections 2.2.2 and 2.2.3,
all notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Sections 2.2.2 and 2.2.3, the Agent shall
be entitled to rely on telephonic instructions from any person that the Agent in
good faith believes is an authorized officer or employee of the Company, and the
Company shall hold the Agent and each other Bank harmless from any loss, cost or
expense resulting from any such reliance.

      14.4 Computations. Where the character or amount of any asset or liability
or item of income or expense is required to be determined, or any consolidation
or other accounting computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent applicable and
except as otherwise specified in this Agreement, be made in accordance with
GAAP, consistently applied; provided that if the Company notifies the Agent that
the Company wishes to amend any covenant in Section 10 to eliminate or to take
into account the effect of any change in GAAP on the operation of such covenant
(or if the Agent notifies the Company that the Required Banks wish to amend
Section 10 for such purpose), then the Company's compliance with such covenant
shall be determined on the basis of GAAP in effect immediately before the
relevant change in GAAP became effective, until either such notice

                                       46
<PAGE>
is withdrawn or such covenant is amended in a manner satisfactory to the Company
and the Required Banks.

      14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.

      14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent (including Attorney
Costs) in connection with the preparation, execution, syndication, delivery and
administration of this Agreement, the other Loan Documents and all other
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith (including any amendment, supplement or waiver to any Loan
Document), and all reasonable out-of-pocket costs and expenses (including
Attorney Costs) incurred by the Agent and each Bank after an Event of Default in
connection with the enforcement of this Agreement, the other Loan Documents or
any such other documents. In addition, the Company agrees to pay, and to save
the Agent and the Banks harmless from all liability for, (a) any stamp or other
taxes (excluding income taxes and franchise taxes based on net income) which may
be payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of
any other Loan Document or any other document provided for herein or delivered
or to be delivered hereunder or in connection herewith and (b) any fees of the
Company's auditors in connection with any reasonable exercise by the Agent and
the Banks of their rights pursuant to Section 10.2. All obligations provided for
in this Section 14.6 shall survive repayment of the Loans, cancellation of the
Notes, expiration or termination of the Letters of Credit and termination of
this Agreement.

      14.7 Captions. Section captions used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.

      14.8  Assignments; Participations.

            14.8.1 Assignments. Any Bank may, with the prior written consents of
the Issuing Bank and the Agent and (so long as no Event of Default exists) the
Company (which consents shall not be unreasonably delayed or withheld and, in
any event, shall not be required for an assignment by a Bank to one of its
Affiliates), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee") all or any fraction of such Bank's Loans
and Commitment (which assignment and delegation shall be of a constant, and not
a varying, percentage of all the assigning Bank's Loans and Commitment) in a
minimum aggregate amount equal to not less than $5,000,000.00; provided that (a)
no assignment and delegation may be made to any Person if, at the time of such
assignment and delegation, the Company would be obligated to pay any greater
amount under Section 7.6 or Section 8 to the Assignee than the Company is then
obligated to pay to the assigning Bank under such Sections (and if any
assignment is made in violation of the foregoing, the Company will not be
required to

                                       47
<PAGE>
pay the incremental amounts) and (b) the Company and the Agent shall be entitled
to continue to deal solely and directly with such Bank in connection with the
interests so assigned and delegated to an Assignee until the date when all of
the following conditions shall have been met:

                  (x) five Business Days (or such lesser period of time as the
Agent and the assigning Bank shall agree) shall have passed after written notice
of such assignment and delegation, together with payment instructions, addresses
and related information with respect to such Assignee, shall have been given to
the Company and the Agent by such assigning Bank and the Assignee,

                  (y) the assigning Bank and the Assignee shall have executed
and delivered to the Company and the Agent an assignment agreement substantially
in the form of Exhibit D (an "Assignment Agreement"), together with any
documents required to be delivered thereunder, which Assignment Agreement shall
have been accepted by the Agent, and

                  (z) except in the case of an assignment by a Bank to one of
its Affiliates, the assigning Bank or the Assignee shall have paid the Agent a
processing fee of $3,500.

From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Pro Rata Share of the Revolving Commitment Amount plus the
principal amount of the Assignee's Term Loan and, if the assigning Bank has
retained a Commitment hereunder, a replacement Note in the principal amount of
the Pro Rata Share of the Revolving Commitment Amount retained by the assigning
Bank plus the principal amount of the Term Loan retained by the assigning Bank
(such Note to be in exchange for, but not in payment of, the predecessor Note
held by such assigning Bank). Each such Note shall be dated the effective date
of such assignment. The assigning Bank shall mark the predecessor Note
"exchanged" and deliver it to the Company. Accrued interest on that part of the
predecessor Note being assigned shall be paid as provided in the Assignment
Agreement. Accrued interest and fees on that part of the predecessor Note not
being assigned shall be paid to the assigning Bank. Accrued interest and accrued
fees shall be paid at the same time or times provided in the predecessor Note
and in this Agreement. Any attempted assignment and delegation not made in
accordance with this Section 14.8.1 shall be null and void.

      Notwithstanding the foregoing provisions of this Section 14.8.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a

                                       48
<PAGE>
Federal Reserve Bank (but no such assignment shall release any Bank from any of
its obligations hereunder).

            14.8.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitment of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"). In the event of a sale by a Bank
of a participating interest to a Participant, (x) such Bank shall remain the
holder of its Note for all purposes of this Agreement, (y) the Company and the
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations hereunder and (z) all amounts payable by
the Company shall be determined as if such Bank had not sold such participation
and shall be paid directly to such Bank. No Participant shall have any direct or
indirect voting rights hereunder except with respect to any of the events
described in the fourth sentence of Section 14.1. Each Bank agrees to
incorporate the requirements of the preceding sentence into each participation
agreement which such Bank enters into with any Participant. The Company agrees
that if amounts outstanding under this Agreement and the Notes are due and
payable (as a result of acceleration or otherwise), each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement, any Note and with respect to any Letter of
Credit to the same extent as if the amount of its participating interest were
owing directly to it as a Bank under this Agreement or such Note; provided that
such right of setoff shall be subject to the obligation of each Participant to
share with the Banks, and the Banks agree to share with each Participant, as
provided in Section 7.5. The Company also agrees that each Participant shall be
entitled to the benefits of Section 7.6 and Section 8 as if it were a Bank
(provided that no Participant shall receive any greater compensation pursuant to
Section 7.6 or Section 8 than would have been paid to the participating Bank if
no participation had been sold).

      14.9 Governing Law. This Agreement and each Note shall be a contract made
under and governed by the internal laws of the State of Michigan applicable to
contracts made and to be performed entirely within such State. Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the Banks
expressed herein or in any other Loan Document shall be in addition to and not
in limitation of those provided by applicable law.

      14.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.

                                       49
<PAGE>
      14.11 Successors and Assigns. This Agreement shall be binding upon the
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.

      14.12 Indemnification by the Company. In consideration of the execution
and delivery of this Agreement by the Agent and the Banks and the agreement to
extend the Commitments provided hereunder, the Company hereby agrees to
indemnify, exonerate and hold the Agent, each Bank and each of the officers,
directors, employees, Affiliates and agents of the Agent and each Bank (each a
"Bank Party") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including Attorney
Costs (collectively, the "Indemnified Liabilities"), incurred by the Bank
Parties or any of them as a result of, or arising out of, or relating to (i) any
tender offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company in
violation of any Environmental Law, (iii) any violation of any Environmental
Laws with respect to conditions at any property owned or leased by the Company
or the operations conducted thereon, or (iv) the investigation, cleanup or
remediation of offsite locations at which the Company or its predecessors are
alleged to have directly or indirectly disposed of hazardous substances and such
allegation is not being diligently contested by appropriate proceedings. If and
to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. All obligations provided for in this Section
14.13 shall survive repayment of the Loans, cancellation of the Notes,
expiration or termination of the Letters of Credit, any foreclosure under, or
any modification, release or discharge of, any or all of the Collateral
Documents and termination of this Agreement.

      14.13 Nonliability of Lenders. The relationship between the Company on the
one hand and the Banks and the Agent on the other hand shall be solely that of
borrower and lender. Neither the Agent nor any Bank shall have any fiduciary
responsibility to the Company. Neither the Agent nor any Bank undertakes any
responsibility to the Company to review or inform the Company or any matter in
connection with any phase of the Company's business or operations. The Company
agrees that neither the Agent nor any Bank shall have liability to the Company
(whether sounding in tort, contract or otherwise) for losses suffered by the
Company in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the Agent
nor any Bank shall have any liability with respect to, and the Company hereby
waives, releases and agrees not to sue for, any special, indirect or
consequential damages suffered by the Company in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.

                                       50
<PAGE>
      14.14 Existing Credit Agreement. The parties acknowledge and agree that
MNB and the Company entered into that certain Credit Agreement, dated as of
April 27, 1998 (the "Existing Agreement"). MNB and Bank One, Michigan
acknowledge and agree that Bank One, Michigan participates in the loans under
the Existing Agreement pursuant to the Credit Participation Agreement, dated as
of July 29, 1998, between Bank One, Michigan and MNB (the "Participation
Agreement"). As of the date hereof, the aggregate principal balance of the loans
outstanding under the Existing Agreement is $49,000,000.00 (the "Existing
Loans"), $4,000,000.00 of which bears interest based upon the Trailing Rate
Average LIBOR (the "Existing Trailing Rate Average LIBOR Loans") and
$45,000,000.00 of which are Eurocurrency Loans maturing as follows (the
"Existing Eurocurrency Loans"):

<TABLE>
<CAPTION>
      Principal Loan Amount                           Maturity Date
      ---------------------                           -------------
<S>                                                   <C>
      $45,000,000.00                                  July 2, 1999
</TABLE>

      Effective as of the date hereof, all of the Existing Loans shall be deemed
to be Revolving Loans under this Agreement and evidenced by the Notes issued
pursuant hereto, and the Existing Agreement, the promissory note issued under
the Existing Agreement and the Participation Agreement shall be terminated for
all purposes, and shall be null and void and of no further force or effect.
Notwithstanding the foregoing, Old Kent Bank shall not participate in any of the
Existing Loans, except as follows:

      A.    On the effective date hereof, Old Kent Bank shall purchase its Pro
            Rata Share of the Existing Trailing Rate Average LIBOR Loans from
            MNB and/or Bank One, Michigan, as the case may be.

      B.    As, if and when each of the Existing Eurodollar Loans is converted
            and/or continued, Old Kent Bank shall purchase its Pro Rata Share of
            such Existing Eurodollar Loan from MNB and/or Bank One, Michigan, as
            the case may be.

      14.15 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF MICHIGAN OR IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF MICHIGAN; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF MICHIGAN AND OF THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF

                                       51
<PAGE>
MICHIGAN FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF MICHIGAN.
THE

                                       52
<PAGE>
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

      14.16 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH BANK
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

Delivered at Farmington Hills, Michigan, as of the day and year first above
written.

                                     LOEKS-STAR PARTNERS
                                     By: Loeks & Loeks Entertainment, Inc., Its
                                     Partner

                                     By:     /s/ Barrie Loeks
                                             -----------------------------

                                     Title:  President
                                             -----------------------------

                                     MICHIGAN NATIONAL BANK, as
                                     Agent

                                     By:     /s/ Lauren R. Fusco
                                             -----------------------------

                                     Title:  Relationship Manager
                                             -----------------------------

                                      53
<PAGE>
                                     MICHIGAN NATIONAL BANK, as
                                     Issuing Bank and as a Bank

                                     By:     /s/ Lauren R. Fusco
                                             -----------------------------
                                     Title:  Relationship Manager
                                             -----------------------------

                                     BANK ONE, MICHIGAN

                                     By:     /s/ Thomas A. Gannon
                                             -----------------------------
                                     Title:  Vice President
                                             -----------------------------

                                     OLD KENT BANK

                                     By:     /s/ G.B.B.
                                             -----------------------------
                                     Title:  Vice President and Manager
                                             -----------------------------

                                      54
<PAGE>
                                PRICING SCHEDULE

      The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and the
LC Fee Rate shall be determined as set forth below.

      Initially, the Eurodollar Margin shall be 1.70% per annum, the Prime Rate
Margin shall be 0.50% per annum, the Non-Use Fee Rate shall be 0.40% per annum
and the LC Fee Rate shall be 1.70% per annum.

      On and after August 31, 1999, the Eurodollar Margin, the Prime Rate
Margin, the Non-Use Fee Rate and the LC Fee Rate shall be equal to the
applicable rate per annum set forth in the table below opposite the applicable
Debt to EBITDA Ratio:

<TABLE>
<CAPTION>
                                                              PRIME
      DEBT                           EURODOLLAR                RATE              NON-USE           LC FEE
TO EBITDA RATIO                        MARGIN                 MARGIN             FEE RATE           RATE
<S>                                  <C>                     <C>                 <C>             <C>
Greater than or equal to                4.00%*                 2.75%*              0.50%           4.00%
to 4.00:1

Greater than or equal to                2.00%                  0.75%               0.50%           2.00%
3.50:1 but less than 4.00:1

Greater than or equal to                1.70%                  0.50%               0.40%           1.70%
3.00:1 but less than 3.50:1

Greater than or equal to                1.40%                  0.25%               0.32%           1.40%
2.50:1 but less than 3.00:1

Greater than or equal to                1.20%                  0.00%               0.25%           1.20%
2.00:1 but less than 2.50:1

Greater than or equal to                1.10%                  0.00%               0.25%           1.10%
1.00:1 but less than 2.00:1

Less than 1.00:1                        0.90%                  0.00%               0.25%           0.90%
</TABLE>

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

* no additional default rate shall be added to these margins

The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and the LC
Fee Rate shall be adjusted, to the extent applicable, on the 45th (or, in the
case of the last Fiscal Quarter of each Fiscal Year, the 90th) day after the end
of each Fiscal Quarter based on the Debt to EBITDA Ratio as of the last day of
such Fiscal Quarter; it being understood that if the Company fails to
<PAGE>
deliver the financial statements required by Section 10.1.1 or 10.1.2, as
applicable, and the related Compliance Certificate, required by Section 10.1.3
by the 45th day (or, if applicable, the 90th day) after any Fiscal Quarter, the
Eurodollar Margin shall be 4.00%, the Prime Rate Margin shall be 2.75%, the
Non-Use Fee Rate shall be 2.50% and the LC Fee Rate shall be 4.00% until such
financial statements and Compliance Certificate are delivered. Notwithstanding
the foregoing, no reduction to the foregoing interest rate margins or fee rates
shall become effective at any time when an Event of Default or Unmatured Event
of Default has occurred and is continuing.
<PAGE>
                                  SCHEDULE 2.1

                           BANKS AND PRO RATA SHARES

<TABLE>
<CAPTION>
                                Pro Rata Share
                                 of Revolving
       Bank                     Commitment Amount                 Pro Rata Share
       ----                     -----------------                 --------------
<S>                            <C>                               <C>
Michigan National Bank            $40,000,000.00                        50%

Bank One, Michigan                $25,000,000.00                     31.25%

Old Kent Bank                     $15,000,000.00                     18.75%
                                  --------------                    ------

  TOTALS                          $80,000,000.00                       100%
</TABLE>
<PAGE>
                                    EXHIBIT A

                           FORM OF REVOLVING LOAN NOTE

Principal Amount: $[A]                               Farmington Hills, Michigan
Due Date: May 1, 2003                                        June 9, 1999

      FOR VALUE RECEIVED, the undersigned, LOEKS-STAR PARTNERS, a Michigan
co-partnership (the "Company"), hereby promises to pay on or before the Due Date
specified above to the order of [B] (the "Bank") at the principal office of
Michigan National Bank (the "Agent") in Farmington Hills, Michigan the Principal
Amount specified above or such lesser amount as shall have been advanced by the
Bank to the Company in accordance with the terms and conditions of the Credit
Agreement dated the date hereof between the Agent, the Bank, other banks and the
Company (as the same may be amended from time to time, the "Agreement"),
together with interest on the unpaid principal balance from time to time
outstanding at the rate per annum equal to the Effective Rate (as hereinafter
defined).

      For purposes hereof, the "Effective Rate" for each of the Loans means the
sum of the applicable Margin as set forth on the Pricing Schedule attached
hereto, plus, at the Company's option exercised at the time each Loan is made,
continued or converted, either (a) the Prime Rate or (b) the Eurodollar Rate.

      Interest shall be calculated on the basis of the daily outstanding balance
of each Loan, computed for the actual number of days elapsed between payments on
the basis of a 360 day year.

      Loans may be made under this Note from time to time only in accordance
with the provisions of the Agreement, provided, however, the Bank may, under
certain circumstances set forth in the Agreement, refuse to make Loans
hereunder. If, prior to the Due Date, the Company repays all indebtedness due
hereunder, a subsequent Loan by the Bank to or for the account of the Company
pursuant to the Agreement shall automatically reinstate this Note.

      All Loans made hereunder shall be charged to a loan account (the "Loan
account") which shall be established in the Company's name on the books of the
Bank, and the Bank shall debit to such Loan account the amount of each Loan made
hereunder together with interest thereon as the same accrues and shall credit to
such Loan account the amount of the repayments received hereunder. Every month,
the Bank shall render to the Company a statement of account setting forth the
outstanding balance of the Company in said Loan account and the interest accrued
and unpaid thereon.

      The Company expressly assumes all risk of loss or delay in the delivery of
any payments by mail, and no course of conduct or dealing shall affect the
Company's assumption of these risks.
<PAGE>
      If any required installment is not paid within ten (10) days after the
later of the date the same is due and the date on which the Company receives the
monthly statement from the Bank reflecting the amount of the payment due, the
Company shall forthwith pay the Bank a late charge equal to 5 cents ($.05) for
each dollar of the installment so overdue. The late charge shall apply
individually to all payments past due, and there shall be no daily prorata
adjustment.

      Both principal and interest are payable in lawful money of the United
States of America to the Agent at 27777 Inkster Road, Farmington Hills, Michigan
48333-9065, or at such other place as the Agent or the holder hereof may from
time to time specify, in immediately available United States funds.

      This Note evidences one or more revolving credit loans (the "Revolving
Loans") from the Bank to the Company under the Agreement, the terms and
conditions of which are herein incorporated by this reference, and is entitled
to the security and benefits provided therein. Any other provision of the
Agreement or any other Loan Document (as defined in the Agreement) to the
contrary notwithstanding, and in addition to any other security interests
granted to the Bank in connection herewith, the Company hereby grants to the
Bank a security interest in all of the Company's bank deposits, instruments,
negotiable documents, and chattel paper which at any time are in the possession
or control of the Bank. Interest is due and payable on the dates and in the
manner set forth in the Agreement. On the Due Date, the entire unpaid principal
balance of the Loans and all accrued and unpaid interest shall be due and
payable.

      All capitalized terms not otherwise defined herein shall have the
respective meanings assigned to them in the Agreement.

      At no time shall the interest charged hereunder be greater than the
highest rate of interest allowed by applicable law. Payments received by the
Bank which would otherwise cause said interest rate to exceed such highest
allowable interest rate shall, to the extent of such excess, be deemed principal
payments. If the Bank shall reasonably determine that the legal authority to
charge the applicable interest rate under this Note has been adjudicated to be
usurious or otherwise limited by law, the rate shall be reduced to the highest
rate then permitted to be charged and the appropriate adjustment shall be made.

      Under certain circumstances set forth in the Agreement, the Due Date of
this Note may be accelerated.

      During any period(s) in which this Note is in default, or after maturity,
whether by acceleration or otherwise, the Company shall be obligated to the Bank
and shall pay the Agent for the account of the Bank interest on the outstanding
principal balance of each Loan at the highest applicable rate set forth in the
Pricing Schedule attached hereto.

      Upon the occurrence of an Event of Default, neither the failure of the
holder hereof promptly to exercise its right to declare the outstanding
principal and accrued and unpaid interest hereunder to be immediately due and
payable, nor failure to exercise any other right or remedy the holder may have
upon default, nor the acceptance by the holder of late payments, nor the failure
of the holder to demand strict performance of any obligation of the Company or
of any
<PAGE>
other person who may be liable hereunder, shall constitute a waiver of any such
rights in connection with any future Event of Default.

      The Bank may hold and apply at any time after an Event of Default its own
indebtedness or liability to the Company in payment of any indebtedness
hereunder.

      Acceptance by the Bank of any payment in an amount less than the full
amount then due shall be deemed an acceptance on account only, and the failure
to pay the full amount of any payment following the date when due shall be and
continue to be an Event of Default.

      The Company may prepay any of the Eurodollar Rate Loans evidenced by this
Note upon the terms and conditions set forth in the Agreement. The Company may
prepay any of the Prime Rate Loans evidenced by this Note at any time and from
time to time without premium or penalty. Company shall designate which Loan(s)
it desires to prepay at the time of prepayment.

      All partial prepayments of principal of each Loan shall be applied against
the last accruing installment or amount due with respect to such Loan. No
partial prepayments shall affect the obligation of the Company to continue to
make all payments required hereunder until the entire unpaid principal and all
accrued interest shall have been paid in full.

      The Company and all endorsers, sureties and guarantors hereof, hereby
jointly and severally waive presentment for payment, notice of non-payment,
notice of protest or protest of this Note, diligence in collection or bringing
suit, and hereby consent to any and all extensions of time, renewals, waivers,
or modifications that may be granted by the Bank with respect to payment or any
other provisions of this Note, and to the release of any collateral or any part
thereof, with or without substitution and hereby waive any and all defenses of a
surety. The liability of the Company shall be absolute and unconditional,
without regard to the liability of any other party hereto.

      The Company, and any other person who may be liable hereunder in any
capacity, agrees to pay all reasonable costs of collection, including reasonable
attorney's fees and expenses, in case the principal on this Note or any payment
of interest hereon is not paid on the respective dates due (whether by demand,
maturity, acceleration or otherwise), or in case it becomes necessary to protect
the security for this Note, whether suit is brought or not.

      This Note shall be governed by and enforced in accordance with the laws of
the State of Michigan.

                               LOEKS-STAR PARTNERS

                               By:: Loeks & Loeks Entertainment, Inc.
                                             Its Partner

                                    By:
                                       --------------------------------------
                                       Barrie Lawson Loeks
                                       Its: President
<PAGE>
                                    EXHIBIT B

                             FORM OF SWINGLINE NOTE

Principal Amount: $2,000,000.00                       Farmington Hills, Michigan
Due Date: May 1, 2003                                        June 9, 1999

           FOR VALUE RECEIVED, the undersigned, LOEKS-STAR PARTNERS, a Michigan
co-partnership (the "Company"), hereby promises to pay on or before the Due Date
specified above to the order of Michigan National Bank (the "Bank") at the
principal office of the Bank in Farmington Hills, Michigan the Principal Amount
specified above or such lesser amount as shall have been advanced by the Bank to
the Company as one or more Swingline Loans in accordance with the terms and
conditions of the Credit Agreement dated the date hereof between the Bank, other
banks and the Company (the "Agreement"), together with interest on the unpaid
principal balance from time to time outstanding at the rate per annum equal to
the Effective Rate (as hereinafter defined).

           For purposes hereof, the "Effective Rate" for each of the Loans means
the sum of the applicable Margin as set forth on the Pricing Schedule attached
hereto, plus, at the Company's option exercised at the time each Loan is made,
continued or converted, either (a) the Prime Rate or (b) the Trailing Rate
Average LIBOR.

      Interest shall be calculated on the basis of the daily outstanding balance
of each Loan, computed for the actual number of days elapsed between payments on
the basis of a 360 day year.

      Loans may be made under this Note from time to time only in accordance
with the provisions of the Agreement, provided, however, the Bank may, in its
sole discretion, refuse to make Loans. If, prior to the Due Date, the Company
repays all indebtedness due hereunder, a subsequent advance by the Bank to or
for the account of the Company pursuant to the Agreement shall automatically
reinstate this Note.

           All Loans made hereunder shall be charged to a loan account (the
"Swingline Loan account") which shall be established in the Company's name on
the books of the Bank, and the Bank shall debit to such Swingline Loan account
the amount of each Swingline Loan made hereunder together with interest thereon
as the same accrues and shall credit to such Swingline Loan account the amount
of the repayments received hereunder. Every month, the Bank shall render to the
Company a statement of account setting forth the outstanding balance of the
Company in said Swingline Loan account and the interest accrued and unpaid
thereon.

           The Company expressly assumes all risk of loss or delay in the
delivery of any payments by mail, and no course of conduct or dealing shall
affect the Company's assumption of these risks.
<PAGE>
           If any required installment is not paid within ten (10) days after
the later of the date the same is due and the date on which the Company receives
the monthly statement from the Bank reflecting the amount of the payment due,
the Company shall forthwith pay the Bank a late charge equal to 5 cents ($.05)
for each dollar of the installment so overdue. The late charge shall apply
individually to all payments past due, and there shall be no daily prorata
adjustment.

           Both principal and interest are payable in lawful money of the United
States of America to the Agent at 27777 Inkster Road, Farmington Hills, Michigan
48333-9065, or at such other place as the Agent or the holder hereof may from
time to time specify, in immediately available United States funds.

           This Note evidences one or more Swingline Loans (the "Swingline
Loans") from the Bank to the Company under the Agreement, the terms and
conditions of which are herein incorporated by this reference, and is entitled
to the security and benefits provided therein. Any other provision of the
Agreement or any other Loan Document (as defined in the Agreement) to the
contrary notwithstanding, and in addition to any other security interests
granted to the Bank in connection herewith, the Company hereby grants to the
Bank a security interest in all of the Company's bank deposits, instruments,
negotiable documents, and chattel paper which at any time are in the possession
or control of the Bank. Interest is due and payable on the dates and in the
manner set forth in the Agreement. On the Due Date, the entire unpaid principal
balance of the Loans and all accrued and unpaid interest shall be due and
payable.

           All capitalized terms not otherwise defined herein shall have the
respective meanings assigned to them in the Agreement.

           At no time shall the interest charged hereunder be greater than the
highest rate of interest allowed by applicable law. Payments received by the
Bank which would otherwise cause said interest rate to exceed such highest
allowable interest rate shall, to the extent of such excess, be deemed principal
payments. If the Bank shall reasonably determine that the legal authority to
charge the applicable interest rate under this Note has been adjudicated to be
usurious or otherwise limited by law, the rate shall be reduced to the highest
rate then permitted to be charged and the appropriate adjustment shall be made.

           Under certain circumstances set forth in the Agreement, the Due Date
of this Note may be accelerated.

           During any period(s) in which this Note is in default, or after
maturity, whether by acceleration or otherwise, the Company shall be obligated
to the Bank and shall pay the Bank interest on the outstanding principal balance
of each Loan at the highest applicable rate set forth in the Pricing Schedule
attached hereto.

           Upon the occurrence of an Event of Default, neither the failure of
the holder hereof promptly to exercise its right to declare the outstanding
principal and accrued and unpaid interest hereunder to be immediately due and
payable, nor failure to exercise any other right or remedy the holder may have
upon default, nor the acceptance by the holder of late payments, nor the
failure of the holder to demand strict performance of any obligation of the
Company or of any
<PAGE>
other person who may be liable hereunder, shall constitute a waiver of any such
rights in connection with any future Event of Default.

           The Bank may hold and apply at any time after an Event of Default its
own indebtedness or liability to the Company in payment of any indebtedness
hereunder.

           Acceptance by the Bank of any payment in an amount less than the full
amount then due shall be deemed an acceptance on account only, and the failure
to pay the full amount of any payment following the date when due shall be and
continue to be an Event of Default.

           The Company may prepay any of the Swingline Loans evidenced by this
Note at any time and from time to time without premium or penalty. Company shall
designate which Loan(s) it desires to prepay at the time of prepayment.

           All partial prepayments of principal of each Loan shall be applied
against the last accruing installment or amount due with respect to such Loan.
No partial prepayments shall affect the obligation of the Company to continue to
make all payments required hereunder until the entire unpaid principal and all
accrued interest shall have been paid in full.

           The Company and all endorsers, sureties and guarantors hereof, hereby
jointly and severally waive presentment for payment, notice of non-payment,
notice of protest or protest of this Note, diligence in collection or bringing
suit, and hereby consent to any and all extensions of time, renewals, waivers,
or modifications that may be granted by the Bank with respect to payment or any
other provisions of this Note, and to the release of any collateral or any part
thereof, with or without substitution and hereby waive any and all defenses of a
surety. The liability of the Company shall be absolute and unconditional,
without regard to the liability of any other party hereto.

           The Company, and any other person who may be liable hereunder in any
capacity, agrees to pay all reasonable costs of collection, including reasonable
attorney's fees and expenses, in case the principal on this Note or any payment
of interest hereon is not paid on the respective dates due (whether by demand,
maturity, acceleration or otherwise), or in case it becomes necessary to protect
the security for this Note, whether suit is brought or not.

           This Note shall be governed by and enforced in accordance with the
laws of the State of Michigan.

                                    LOEKS-STAR PARTNERS
                                    By:: Loeks & Loeks Entertainment, Inc.
                                           Its Partner

                                            By:
                                               --------------------------------
                                               Barrie Lawson Loeks
                                               Its: President
<PAGE>
                                    EXHIBIT C

                                 LIST OF LEASES
<PAGE>
                                    EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

To:        Michigan National Bank, as Agent

           Please refer to the Credit Agreement dated as of June 9, 1999 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
Loeks-Star Partners (the "Company"), various financial institutions and Michigan
National Bank, as agent. Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

I.         Reports.  Enclosed herewith is a copy of the [annual audited/
quarterly] report of the Company as at _____________, ____ (the "Computation
Date"), which report fairly presents in all material respects the financial
condition and results of operations [(subject to the absence of footnotes and to
normal year-end adjustments)] of the Company as of the Computation Date and has
been prepared in accordance with GAAP consistently applied.

II.        Financial Tests.  The Company hereby certifies and warrants to you
that the following is a true and correct computation as at the Computation Date
of the following ratios and/or financial restrictions contained in the Credit
Agreement:

           A.    SECTION 10.6.1 - MINIMUM FIXED CHARGE COVERAGE RATIO

<TABLE>
<S>                                                                             <C>
                 1.    Net Income (less assumed 40% tax
                        distribution to partners)                               $________

                 2.    Plus: Interest Expense                                   $________
                             Non-cash portion of
                                deferred taxes                                  $________
                             depreciation                                       $________
                             amortization                                       $________
                             Lease expense                                      $________

                 3.    Total                                                    $________
</TABLE>
<PAGE>
<TABLE>
<S>                                                                             <C>
                 4.    Income Taxes paid                                        $________

                 5.    Interest Expense                                         $________

                 6.    Lease Expense (excluding all percentage
                        rents, property taxes and insurance premiums
                        payable under the Leases)                               $________

                 7.    Required payments of
                       principal of Debt
                       (excluding Loans)                                        $________

                 8.    Sum of (4) through (7)                                   $________

                 9.    Ratio of (3) to (8)                                       ___ to 1

                 10.   Minimum Required                                          2.00 to 1

           B.    SECTION 10.6.2 - MAXIMUM DEBT TO EBITDA RATIO

                 1.    Debt                                                     $________

                 2.    Net Income                                               $________

                 3.    Plus: Interest Expense                                   $________
                             Income Tax expense                                 $________
                             depreciation                                       $________
                             amortization                                       $________
                             EBITDA imputed to
                               theater complexes open less than
                                12 months*                                      $________

                 4.    Total (EBITDA)                                           $________

                 5.    Ratio of (1) to (4)                                      _______ to 1

                 6.    Maximum allowed                                          _______ to 1
</TABLE>

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

*  attach sheet showing a detailed calculation of this amount for each theater
   complex

<TABLE>
<S>                                                               <C>
           C.    SECTION 10.6.3-MINIMUM TANGIBLE NET WORTH

                 1.    Tangible Net Worth                         $________

                 2.    Minimum required                           $________
</TABLE>
<PAGE>
<TABLE>
<S>                                                                        <C>
           D.    MAXIMUM AVAILABLE AMOUNT

           1.     4 x EBITDA (prior to February 28, 2002)
                  and 3.5 x EBITDA (from and after February
                  28, 2002) = Maximum Available Amount                     $_________

           2.    Revolving Outstandings and Swingline Loans Outstanding    $_________

           3.    Net Availability  [Excess of Item 1 over Item 2]          $_________

           4.    Required Prepayment due as at the Calculation Date
                 [Excess of Item 2 over Item 1]                            $_________
</TABLE>

           The Company further certifies to you that no Event of Default or
Unmatured Event of Default has occurred and is continuing.

           IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its duly authorized officer on _________, ____.

                                    LOEKS-STAR PARTNERS
                                    By:: Loeks & Loeks Entertainment, Inc.
                                           Its Partner

                                            By:
                                                ------------------------------
                                                 Barrie Lawson Loeks
                                                 Its: President

<PAGE>
                                    EXHIBIT F

              FORM OF MONTHLY MAXIMUM AVAILABLE AMOUNT CERTIFICATE

To:        Michigan National Bank, as Agent

Ladies and Gentlemen:

           Please refer to the Credit Agreement dated as of June 9, 1999 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
Loeks-Star Partners (the "Company"), various financial institutions and Michigan
National Bank, as agent. This certificate (this "Certificate"), together with
supporting calculations attached hereto, is delivered to you pursuant to the
terms of the Credit Agreement. Capitalized terms used but not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.

           The Company hereby certifies and warrants to the Agent and the Banks
that at the close of business on ______________, ____ (the "Calculation Date"),
the Maximum Available Amount was $_____________, computed as set forth on the
schedule attached hereto.

           IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its officer thereunto duly authorized on ___________,
______.

                                    LOEKS-STAR PARTNERS
                                    By:: Loeks & Loeks Entertainment, Inc.
                                          Its Partner

                                           By:
                                              --------------------------------
                                              Barrie Lawson Loeks
                                              Its: President
<PAGE>
                SCHEDULE TO MAXIMUM AVAILABLE AMOUNT CERTIFICATE

                          Dated as of _________________

<TABLE>
<S>                                                                        <C>
           1.    Net Income                                                 $________

           2.    Plus: Interest Expense                                     $________
                       Income Tax expense                                   $________
                       depreciation                                         $________
                       amortization                                         $________
                       EBITDA imputed to
                        theater complexes open less than
                        12 months*                                          $________

           3.    Total (EBITDA)                                             $________

           4.    4 x EBITDA (prior to February 28, 2002)
                  and 3.5 x EBITDA (from and after February
                  28, 2002) = Maximum Available Amount                      $_________

           5.    Revolving Outstandings and Swingline Loans Outstanding     $_________

           6.    Net Availability  [Excess of Item 4 over Item 5]           $_________

           7.    Availability deficiency [Excess of Item 5 over Item 4]     $_________
</TABLE>

-----------------
*  attach sheet showing a detailed calculation of this amount for each theater
   complex

<PAGE>
                         AMENDMENT TO CREDIT AGREEMENT

         THIS AMENDMENT TO CREDIT AGREEMENT dated as of April 1, 2000 (this
"Amendment") is entered into among LOEKS-STAR PARTNERS (the "Company"), MICHIGAN
NATIONAL BANK, BANK ONE, MICHIGAN, OLD KENT BANK (together with their respective
successors and assigns, the "Banks") and MICHIGAN NATIONAL BANK (in its
individual capacity, "MNB"), as agent for the Banks.

         WHEREAS, on June 9, 1999, the Banks and the Company entered into a
Credit Agreement (the "Agreement"), which the parties desire to amend as
hereafter set forth;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree to amend the
Agreement as follows:

         1. Section 10.6.2 of the Agreement is hereby amended in its entirety,
as follows:

                  10.6.2 Debt to EBITDA Ratio. Not permit the Debt to EBITDA
         Ratio as of the last day of any Computation Period (a) prior to
         February 28, 2002 to exceed 4:00 to 1 or (b) to exceed 3.5 to 1 at any
         time from and after February 28, 2002, provided, however, that the Debt
         to EBITDA Ratio may exceed 4.00 to 1, but never more than 4.20 to 1 for
         any three (3) of the following four (4) months, namely, March, April,
         May and June, 2000.

         2. The Pricing Schedule attached to the Agreement is hereby amended and
replaced by the Pricing Schedule attached to this Amendment.

         Except as expressly amended hereby, the Credit Agreement shall remain
in full force and effect.

         This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.
<PAGE>
Delivered at Farmington Hills, Michigan, as of the day and year first above
written.

                                            LOEKS-STAR PARTNERS

                                            By: Loeks & Loeks Entertainment,
                                            Inc., Its Partner

                                            By:       /s/ Barrie Loeks
                                                     ---------------------------

                                            Title:    President
                                                     ---------------------------

                                            MICHIGAN NATIONAL BANK, as Agent

                                            By:       /s/ Lauren R. Fusco
                                                     ---------------------------

                                            Title:    Vice President
                                                     ---------------------------

                                            MICHIGAN NATIONAL BANK, as Issuing
                                            Bank and as a Bank

                                            By:       /s/ Lauren R. Fusco
                                                     ---------------------------

                                            Title:    Vice President
                                                     ---------------------------

                                            BANK ONE, MICHIGAN

                                            By:       /s/ Thomas A. Gannon
                                                     ---------------------------

                                            Title:    Managing Director
                                                     ---------------------------

                                            OLD KENT BANK

                                            By:       /s/ G.B.B.
                                                     ---------------------------

                                            Title:    Vice President and Manager
                                                     ---------------------------

                                       2
<PAGE>
                                PRICING SCHEDULE

         The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and
the LC Fee Rate shall be determined as set forth below.

         Initially, the Eurodollar Margin shall be 1.70% per annum, the Prime
Rate Margin shall be 0.50% per annum, the Non-Use Fee Rate shall be 0.40% per
annum and the LC Fee Rate shall be 1.70% per annum.

         On and after August 31, 1999, the Eurodollar Margin, the Prime Rate
Margin, the Non-Use Fee Rate and the LC Fee Rate shall be equal to the
applicable rate per annum set forth in the table below opposite the applicable
Debt to EBITDA Ratio:

<TABLE>
<CAPTION>
                                                PRIME
     DEBT                        EURODOLLAR      RATE         NON-USE      LC FEE
TO EBITDA RATIO                   MARGIN        MARGIN        FEE RATE      RATE
<S>                              <C>            <C>           <C>          <C>
Greater than or equal to           4.00%*        2.75%*        0.50%        4.00%
to 4.00:1

Greater than or equal to           2.00%         0.75%         0.50%        2.00%
3.50:1 but less than 4.00:1

Greater than or equal to           1.70%         0.50%         0.40%        1.70%
3.00:1 but less than 3.50:1

Greater than or equal to           1.40%         0.25%         0.32%        1.40%
2.50:1 but less than 3.00:1

Greater than or equal to           1.20%         0.00%         0.25%        1.20%
2.00:1 but less than 2.50:1

Greater than or equal to           1.10%         0.00%         0.25%        1.10%
1.00:1 but less than 2.00:1

Less than 1.00:1                   0.90%         0.00%         0.25%        0.90%
</TABLE>

----------
* no additional default rate shall be added to these margins

The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and the LC
Fee Rate shall be adjusted, to the extent applicable, on the 45th (or, in the
case of the last Fiscal Quarter of each Fiscal Year, the 90th) day after the end
of each Fiscal Quarter based on the Debt to EBITDA Ratio as of the last day of
such Fiscal Quarter; it being understood that if the Company fails to deliver
the financial statements required by Section 10.1.1 or 10.1.2, as applicable,
and the related Compliance Certificate, required by Section 10.1.3 by the 45th
day (or, if applicable, the 90th day) after any Fiscal Quarter, the Eurodollar
Margin shall be 4.00%, the Prime Rate Margin

                                       3
<PAGE>
shall be 2.75%, the Non-Use Fee Rate shall be 2.50% and the LC Fee Rate shall be
4.00% until such financial statements and Compliance Certificate are delivered.
Notwithstanding the foregoing, no reduction to the foregoing interest rate
margins or fee rates shall become effective at any time when an Event of Default
or Unmatured Event of Default has occurred and is continuing.

         Notwithstanding the foregoing, the Eurodollar Margin shall be 2.30% for
any of the months of March, April, May or June, 2000 for which the Debt to
EBITDA Ratio, as of the last day of any such month, is greater than or equal to
4.00:1 but less than 4.20:1, provided, however, that if the Debt to EBITDA
Ratio, as of the last day of each and all of such months, is greater than or
equal to 4.00:1, then the Eurodollar Margin shall be 4.00% for each of such
months.

                                       4
<PAGE>
                      SECOND AMENDMENT TO CREDIT AGREEMENT

         THIS SECOND AMENDMENT TO CREDIT AGREEMENT dated as of April 1, 2000
(this "Amendment") is entered into among LOEKS-STAR PARTNERS (the "Company"),
MICHIGAN NATIONAL BANK, BANK ONE, MICHIGAN, OLD KENT BANK (together with their
respective successors and assigns, the "Banks") and MICHIGAN NATIONAL BANK (in
its individual capacity, "MNB"), as agent for the Banks.

         WHEREAS, on June 9, 1999, the Banks and the Company entered into a
Credit Agreement (as previously amended, the "Agreement"), which the parties
desire to amend as hereafter set forth;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree to amend the
Agreement as follows:

         1. The definition of Compliance Certificate as set forth in the
Agreement is hereby amended in its entirety to read, as follows:

                  Compliance Certificate means a certificate substantially in
         the form of Exhibit E attached to the Amendment to Credit Agreement.

         2. The definition of Maximum Available Amount as set forth in the
Agreement is hereby amended in its entirety to read, as follows:

                  Maximum Available Amount means the lesser of (a)
         $80,000,000.00 and (b) the amount equal to 4 times EBITDA for any
         Computation Period prior to February 28, 2002, except for the months of
         March, April and May, 2000, the amount shall be equal to 4.2 times
         EBITDA, or the amount equal to 3.5 times EBITDA for any Computation
         Period from and after February 28, 2002.

         3. The definition of Maximum Available Amount Certificate as set forth
in the Agreement is hereby amended in its entirety to read, as follows:

                  Maximum Available Amount Certificate means a certificate in
         substantially the form of Exhibit F attached to the Amendment to Credit
         Agreement.

         4. Section 10.6.2 of the Agreement is hereby amended in its entirety,
as follows:

                  10.6.2 Debt to EBITDA Ratio. Not permit the Debt to EBITDA
         Ratio as of the last day of any Computation Period (a) prior to
         February 28, 2002 to exceed 4:00 to 1 or (b) to exceed 3.5 to 1 at any
         time from and after February 28, 2002, provided, however, that the Debt
         to EBITDA Ratio may exceed 4.00 to 1, but never more than 4.20 to 1 for
         the months of March, April and May, 2000.
<PAGE>
         5. The Pricing Schedule attached to the Agreement and to each of the
Notes is hereby amended and replaced by the d Pricing Schedule attached to this
Amendment.

         Except as expressly amended hereby, the Credit Agreement shall remain
in full force and effect.

         This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.

Delivered at Farmington Hills, Michigan, as of the day and year first above
written.

                                          LOEKS-STAR PARTNERS

                                          By: Loeks & Loeks Entertainment, Inc.,
                                          Its Partner

                                          By:       /s/ Barrie Loeks
                                                   -----------------------------

                                          Title:    President
                                                   -----------------------------

                                          MICHIGAN NATIONAL BANK, as Agent

                                          By:       /s/ Lauren R. Fusco
                                                   -----------------------------

                                          Title:    Vice President
                                                   -----------------------------

                                       2
<PAGE>
                                          MICHIGAN NATIONAL BANK, as Issuing
                                          Bank and as a Bank

                                          By:       /s/ Lauren R. Fusco
                                                   -----------------------------

                                          Title:    Vice President
                                                   -----------------------------

                                          BANK ONE, MICHIGAN

                                          By:       /s/ Thomas A. Gannon
                                                   -----------------------------

                                          Title:    Managing Director
                                                   -----------------------------

                                          OLD KENT BANK

                                          By:       /s/ G. B. B.
                                                   -----------------------------

                                          Title:    Vice President and Manager
                                                   -----------------------------

                                       3
<PAGE>
                                PRICING SCHEDULE

         The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and
the LC Fee Rate shall be determined as set forth below.

         Initially, the Eurodollar Margin shall be 1.70% per annum, the Prime
Rate Margin shall be 0.50% per annum, the Non-Use Fee Rate shall be 0.40% per
annum and the LC Fee Rate shall be 1.70% per annum.

         On and after August 31, 1999, the Eurodollar Margin, the Prime Rate
Margin, the Non-Use Fee Rate and the LC Fee Rate shall be equal to the
applicable rate per annum set forth in the table below opposite the applicable
Debt to EBITDA Ratio:

<TABLE>
<CAPTION>
                                                 PRIME
       DEBT                     EURODOLLAR        RATE       NON-USE       LC FEE
  TO EBITDA RATIO                 MARGIN         MARGIN      FEE RATE       RATE
<S>                             <C>              <C>         <C>           <C>
Greater than or equal to           4.00%*        2.75%*        0.50%        4.00%
to 4.00:1

Greater than or equal to           2.00%         0.75%         0.50%        2.00%
3.50:1 but less than 4.00:1

Greater than or equal to           1.70%         0.50%         0.40%        1.70%
3.00:1 but less than 3.50:1

Greater than or equal to           1.40%         0.25%         0.32%        1.40%
2.50:1 but less than 3.00:1

Greater than or equal to           1.20%         0.00%         0.25%        1.20%
2.00:1 but less than 2.50:1

Greater than or equal to           1.10%         0.00%         0.25%        1.10%
1.00:1 but less than 2.00:1

Less than 1.00:1                   0.90%         0.00%         0.25%        0.90%
</TABLE>

-----------------------
* no additional default rate shall be added to these margins

The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and the LC
Fee Rate shall be adjusted, to the extent applicable, on the 45th (or, in the
case of the last Fiscal Quarter of each Fiscal Year, the 90th) day after the end
of each Fiscal Quarter based on the Debt to EBITDA Ratio as of the last day of
such Fiscal Quarter; it being understood that if the Company fails to deliver
the financial statements required by Section 10.1.1 or 10.1.2, as applicable,
and the related Compliance Certificate, required by Section 10.1.3 by the 45th
day (or, if applicable, the 90th day) after any Fiscal Quarter, the Eurodollar
Margin shall be 4.00%, the Prime Rate Margin

                                       4
<PAGE>
shall be 2.75%, the Non-Use Fee Rate shall be 2.50% and the LC Fee Rate shall be
4.00% until such financial statements and Compliance Certificate are delivered.
Notwithstanding the foregoing, no reduction to the foregoing interest rate
margins or fee rates shall become effective at any time when an Event of Default
or Unmatured Event of Default has occurred and is continuing.

         Notwithstanding the foregoing, the Eurodollar Margin shall be 2.30% for
any of the months of March, April or May, 2000 for which the Debt to EBITDA
Ratio, as of the last day of any such month, is greater than or equal to 4.00:1
but less than 4.20:1.

                                       5
<PAGE>
                                  SCHEDULE 2.1

                            BANKS AND PRO RATA SHARES

<TABLE>
<CAPTION>
                                  Pro Rata Share
                                   of Revolving
           Bank                  Commitment Amount           Pro Rata Share
           ----                  -----------------           --------------
<S>                              <C>                         <C>
    Michigan National Bank        $40,000,000.00                    50%

    Bank One, Michigan            $25,000,000.00                 31.25%

    Old Kent Bank                 $15,000,000.00                 18.75%
                                  --------------                 -----
      TOTALS                      $80,000,000.00                   100%
</TABLE>

                                       6
<PAGE>
                                    EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

To:      Michigan National Bank, as Agent

         Please refer to the Credit Agreement dated as of June 9, 1999 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
Loeks-Star Partners (the "Company"), various financial institutions and Michigan
National Bank, as agent. Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

I. Reports. Enclosed herewith is a copy of the [annual audited/quarterly] report
of the Company as at _____________, ____ (the "Computation Date"), which report
fairly presents in all material respects the financial condition and results of
operations [(subject to the absence of footnotes and to normal year-end
adjustments)] of the Company as of the Computation Date and has been prepared in
accordance with GAAP consistently applied.

II. Financial Tests. The Company hereby certifies and warrants to you that the
following is a true and correct computation as at the Computation Date of the
following ratios and/or financial restrictions contained in the Credit
Agreement:

<TABLE>
<CAPTION>
         A.       SECTION 10.6.1 - MINIMUM FIXED CHARGE COVERAGE RATIO
<S>                                                           <C>
                  1.    Net Income (less assumed 40% tax
                         distribution to partners)            $________

                  2.    Plus:    Interest Expense             $________
                                 Non-cash portion of
                                   deferred taxes             $________
                                 depreciation                 $________
                                 amortization                 $________
                                 Lease expense                $________

                  3.    Total                                 $________
</TABLE>

                                       7
<PAGE>
<TABLE>
<S>                                                              <C>
             4.   Income Taxes paid                              $________

             5.   Interest Expense                               $________

             6.   Lease Expense (excluding all percentage
                   rents, property taxes and insurance premiums
                   payable under the Leases)                     $________

             7.   Required payments of
                  principal of Debt

                  (excluding Loans)                              $________

             8.   Sum of (4) through (7)                         $________

             9.   Ratio of (3) to (8)                             ___ to 1

             10.  Minimum Required                               1.75 to 1
</TABLE>

<TABLE>
<CAPTION>
         B.       SECTION 10.6.2 - MAXIMUM DEBT TO EBITDA RATIO
<S>                                                           <C>
                  1.    Debt                                     $________

                  2.    Net Income                               $________

                  3.    Plus:  Interest Expense                  $________
                               Income Tax expense                $________
                               depreciation                      $________
                               amortization                      $________
                               EBITDA imputed to
                                theater complexes open less
                                than 12 months*                  $________

                  4.    Total    (EBITDA)                        $________

                  5.    Ratio of (1) to (4)                   _______ to 1

                  6.    Maximum allowed                       _______ to 1
</TABLE>

-----------------
*        attach sheet showing a detailed calculation of this amount for each
         theater complex

                                       8
<PAGE>
<TABLE>
<CAPTION>
                C.         SECTION 10.6.3-MINIMUM TANGIBLE NET WORTH
<S>                                                              <C>
                         1.       Tangible Net Worth             $________

                         2.       Minimum required               $________
</TABLE>

<TABLE>
<CAPTION>
                D.         MAXIMUM AVAILABLE AMOUNT
<S>                                                                             <C>
                1.  4 x EBITDA (prior to February 28, 2002); 4.2 x
                    EBITDA (March, April and May, 2000);
                    and 3.5 x EBITDA (from and after February
                    28, 2002) = Maximum Available Amount                        $_________

                2.  Revolving Outstandings and Swingline Loans Outstanding      $_________

                3.  Net Availability  [Excess of Item 1 over Item 2]            $_________

                4.  Required Prepayment due as at the Calculation Date
                    [Excess of Item 2 over Item 1]                              $_________
</TABLE>

         The Company further certifies to you that no Event of Default or
Unmatured Event of Default has occurred and is continuing.

         IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its duly authorized officer on _________, ____.

                                      LOEKS-STAR PARTNERS
                                      By:  Loeks & Loeks Entertainment, Inc.
                                            Its Partner

                                            By:
                                               ---------------------------------
                                               Barrie Lawson Loeks
                                               Its: President

                                       9

<PAGE>
                                    EXHIBIT F

              FORM OF MONTHLY MAXIMUM AVAILABLE AMOUNT CERTIFICATE

To:      Michigan National Bank, as Agent

Ladies and Gentlemen:

         Please refer to the Credit Agreement dated as of June 9, 1999 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
Loeks-Star Partners (the "Company"), various financial institutions and Michigan
National Bank, as agent. This certificate (this "Certificate"), together with
supporting calculations attached hereto, is delivered to you pursuant to the
terms of the Credit Agreement. Capitalized terms used but not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.

         The Company hereby certifies and warrants to the Agent and the Banks
that at the close of business on ______________, ____ (the "Calculation Date"),
the Maximum Available Amount was $_____________, computed as set forth on the
schedule attached hereto.

         IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its officer thereunto duly authorized on ___________,
______.

                                      LOEKS-STAR PARTNERS
                                      By:: Loeks & Loeks Entertainment, Inc.
                                              Its Partner

                                             By:
                                                --------------------------------
                                                 Barrie Lawson Loeks
                                                         Its: President

                                       10
<PAGE>

                SCHEDULE TO MAXIMUM AVAILABLE AMOUNT CERTIFICATE

                          Dated as of _________________

<TABLE>
<S>                                                                            <C>
   1.       Net Income                                                         $________

   2.       Plus:    Interest Expense                                          $________
                     Income Tax expense                                        $________
                     depreciation                                              $________
                     amortization                                              $________
                     EBITDA imputed to
                      theater complexes open less than
                      12 months*                                               $________

   3.       Total (EBITDA)                                                     $________

   4.         4 x EBITDA (prior to February 28, 2002); 4.2 x
             EBITDA (March, April and May, 2000);
             and 3.5 x EBITDA (from and after February
             28, 2002) = Maximum Available Amount                              $_________

   5.       Revolving Outstandings and Swingline Loans Outstanding             $_________

   6.       Net Availability  [Excess of Item 4 over Item 5]                   $_________

   7.       Availability deficiency [Excess of Item 5 over Item 4]             $_________

</TABLE>

-----------------
*attach sheet showing a detailed calculation of this amount for each theater
complex

                                       11

<PAGE>
                       THIRD AMENDMENT TO CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO CREDIT AGREEMENT dated as of September 15, 2000
(the "Third Amendment") is entered into among LOEKS-STAR PARTNERS (the
"Company"), MICHIGAN NATIONAL BANK, BANK ONE, MICHIGAN, OLD KENT BANK (together
with their respective successors and assigns, the "Banks") and MICHIGAN NATIONAL
BANK (in its individual capacity, "MNB"), as agent for the Banks.

         WHEREAS, on June 9, 1999, the Banks and the Company entered into a
Credit Agreement (as previously amended, the "Agreement"), which the parties
desire to amend as hereafter set forth;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree to amend the
Agreement as follows:

         1. The definition of Compliance Certificate as set forth in the
Agreement is hereby amended in its entirety to read, as follows:

                  Compliance Certificate means a certificate substantially in
         the form of Exhibit E attached to the Third Amendment.

         2. The definition of Maximum Available Amount as set forth in the
Agreement is hereby amended in its entirety to read, as follows:

                  Maximum Available Amount means the lesser of (a)
         $80,000,000.00 prior to September 1, 2000, or $72,000,000 from and
         after September 1, 2000, and (b) the amount equal to 4 times EBITDA for
         any Computation Period prior to February 28, 2002 (except for the
         months of March, April and May, 2000, the amount shall be equal to 4.2
         times EBITDA and except that for the period between July 1, 2000 and
         February 28, 2001, the amount shall be 4.4 times EBITDA), or the amount
         equal to 3.5 times EBITDA for any Computation Period from and after
         February 28, 2002.

         3. The definition of Maximum Available Amount Certificate as set forth
in the Agreement is hereby amended in its entirety to read, as follows:

                  Maximum Available Amount Certificate means a certificate in
         substantially the form of Exhibit F attached to the Third Amendment.
<PAGE>
         4. The definition of Revolving Commitment Amount as set forth in the
Agreement is hereby amended in its entirety to read, as follows:

                  Revolving Commitment Amount means $80,000,000.00 prior to
         September 1, 2000 and $72,000,000.00 from and after September 1, 2000,
         as reduced from time to time pursuant to Section 6.1.

         5. Section 10.6.2 of the Agreement is hereby amended in its entirety to
read, as follows:

                  10.6.2 Debt to EBITDA Ratio. Not permit the Debt to EBITDA
         Ratio as of the last day of any Computation Period (a) prior to
         February 28, 2002 to exceed 4:00 to 1 or (b) to exceed 3.5 to 1 at any
         time from and after February 28, 2002, provided, however, that the Debt
         to EBITDA Ratio may exceed 4.00 to 1, but never more than 4.20 to 1,
         for the months of March, April and May, 2000 and except that the Debt
         to EBITDA Ratio may exceed 4.00 to 1, but never more than 4.40 to 1,
         for any Computation Period ending between July 1, 2000 and March 1,
         2001.

         6. Section 10.10 of the Agreement is hereby amended in its entirety to
read, as follows:

                  10.10 Restricted Payments. Not (a) make any distribution to
         any of its partners, or (b) purchase or redeem any of its partnership
         interests or other equity interests or any warrants, options or other
         rights in respect thereof. Notwithstanding the foregoing, so long as no
         Event of Default or Unmatured Event of Default exists and the aggregate
         outstanding Loans and Letters of Credit does not exceed the Maximum
         Available Amount, the Company may make cash distributions to its
         partners to the extent permitted by applicable law, provided that
         during its 2001 fiscal year the Company shall not make cash
         distributions to its partners in an amount exceeding 18.20% of EBITDA
         for such fiscal year.

         7. The Pricing Schedule attached to the Agreement and to each of the
Notes is hereby amended and replaced by the Pricing Schedule attached to the
Third Amendment.

         8. Schedule 2.1 attached to the Agreement is hereby amended and
replaced by Schedule 2.1 attached to the Third Amendment.

         The Company hereby represents and warrants that each of the
representations and warranties set forth in the Agreement are true and accurate
as of the date of the Third Amendment.

         Simultaneously with its execution of the Third Amendment, the Company
shall pay to the Agent for the pro rata benefit of each Bank an amendment fee in
the aggregate amount of $90,000.00.

         Except as expressly amended hereby, the Credit Agreement shall remain
in full force and effect.

         This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.

Delivered at Farmington Hills, Michigan, as of the day and year first above
written, which shall be the effective date of this Amendment.

2
<PAGE>
                                                LOEKS-STAR PARTNERS

                                                By: Loeks & Loeks Entertainment,
                                                Inc., Its Partner

                                                By:       /s/ Barrie Loeks
                                                         -----------------------

                                                Title:    President
                                                         -----------------------

                                                MICHIGAN NATIONAL BANK, as Agent

                                                By:       /s/ Lauren R. Fusco
                                                         -----------------------

                                                Title:    Vice President
                                                         -----------------------

3
<PAGE>
                                                MICHIGAN NATIONAL BANK, as
                                                Issuing Bank and as a Bank

                                                By:       /s/ Lauren R. Fusco
                                                         -----------------------

                                                Title:    Vice President
                                                         -----------------------

                                                BANK ONE, MICHIGAN

                                                By:       /s/ Thomas A. Gannon
                                                         -----------------------

                                                Title:    Managing Director
                                                         -----------------------

                                                OLD KENT BANK

                                                By:       /s/ G. B. B.
                                                         -----------------------

                                                Title:    Vice President and
                                                          Manager
                                                         -----------------------

4
<PAGE>
                                PRICING SCHEDULE

         The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and
the LC Fee Rate shall be determined as set forth below.

         Initially, the Eurodollar Margin shall be 1.70% per annum, the Prime
Rate Margin shall be 0.50% per annum, the Non-Use Fee Rate shall be 0.40% per
annum and the LC Fee Rate shall be 1.70% per annum.

         On and after August 31, 1999, the Eurodollar Margin, the Prime Rate
Margin, the Non-Use Fee Rate and the LC Fee Rate shall be equal to the
applicable rate per annum set forth in the table below opposite the applicable
Debt to EBITDA Ratio:

<TABLE>
<CAPTION>
                                                PRIME
     DEBT                        EURODOLLAR      RATE         NON-USE      LC FEE
TO EBITDA RATIO                   MARGIN        MARGIN        FEE RATE      RATE
<S>                              <C>            <C>           <C>          <C>
Greater than or equal to           4.00%*        2.75%*        0.50%        4.00%
to 4.00:1

Greater than or equal to           2.00%         0.75%         0.50%        2.00%
3.50:1 but less than 4.00:1

Greater than or equal to           1.70%         0.50%         0.40%        1.70%
3.00:1 but less than 3.50:1

Greater than or equal to           1.40%         0.25%         0.32%        1.40%
2.50:1 but less than 3.00:1

Greater than or equal to           1.20%         0.00%         0.25%        1.20%
2.00:1 but less than 2.50:1

Greater than or equal to           1.10%         0.00%         0.25%        1.10%
1.00:1 but less than 2.00:1

Less than 1.00:1                   0.90%         0.00%         0.25%        0.90%
</TABLE>

----------
* no additional default rate shall be added to these margins

The Eurodollar Margin, the Prime Rate Margin, the Non-Use Fee Rate and the LC
Fee Rate shall be adjusted, to the extent applicable, on the 45th (or, in the
case of the last Fiscal Quarter of each Fiscal Year, the 90th) day after the end
of each Fiscal Quarter based on the Debt to EBITDA Ratio as of the last day of
such Fiscal Quarter; it being understood that if the Company fails to deliver
the financial statements required by Section 10.1.1 or 10.1.2, as applicable,
and the related Compliance Certificate, required by Section 10.1.3 by the 45th
day (or, if applicable, the 90th day) after any Fiscal Quarter, the Eurodollar
Margin shall be 4.00%, the Prime Rate Margin shall be 2.75%, the Non-Use Fee
Rate shall be 2.50% and the LC Fee Rate shall be 4.00% until such financial
statements and Compliance Certificate are delivered. Notwithstanding the
foregoing, no reduction to the foregoing interest rate
<PAGE>
margins or fee rates shall become effective at any time when an Event of Default
or Unmatured Event of Default has occurred and is continuing.

         Notwithstanding the foregoing, the Eurodollar Margin shall be 2.30% (a)
for any of the months of March, April or May, 2000 for which the Debt to EBITDA
Ratio, as of the last day of any such month, is greater than or equal to 4.00:1
but less than 4.20:1 and (b) for any time between July 1, 2000 and March 1, 2001
that the Debt to EBITDA Ratio is greater than or equal to 4.00:1 but less than
4.40:1.
<PAGE>
                      SCHEDULE 2.1 BANKS AND PRO RATA SHARES

<TABLE>
<CAPTION>
                              Pro Rata Share
                               of Revolving
      Bank                   Commitment Amount           Pro Rata Share
      ----                   -----------------           --------------
<S>                          <C>                         <C>
Michigan National Bank        $36,000,000.00                    50%

Bank One, Michigan            $22,500,000.00                 31.25%

Old Kent Bank                 $13,500,000.00                 18.75%
                              --------------                 ------
TOTALS                        $72,000,000.00                   100%
</TABLE>

                     EXHIBIT E FORM OF COMPLIANCE CERTIFICATE

To:      Michigan National Bank, as Agent

         Please refer to the Credit Agreement dated as of June 9, 1999 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
Loeks-Star Partners (the "Company"), various financial institutions and Michigan
National Bank, as agent. Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

I. Reports. Enclosed herewith is a copy of the [annual audited/quarterly] report
of the Company as at _____________, ____ (the "Computation Date"), which report
fairly presents in all material respects the financial condition and results of
operations [(subject to the absence of footnotes and to normal year-end
adjustments)] of the Company as of the Computation Date and has been prepared in
accordance with GAAP consistently applied.

II. Financial Tests. The Company hereby certifies and warrants to you that the
following is a true and correct computation as at the Computation Date of the
following ratios and/or financial restrictions contained in the Credit
Agreement:

<TABLE>
<CAPTION>
         A.       SECTION 10.6.1 - MINIMUM FIXED CHARGE COVERAGE RATIO
<S>                                                                    <C>
                  1.       Net Income (less assumed 40% tax
                            distribution to partners)                  $________

                  2.       Plus:    Interest Expense                   $________
                                    Non-cash portion of
                                      deferred taxes                   $________
                                    depreciation                       $________
                                    amortization                       $________
                                    Lease expense                      $________
</TABLE>

<PAGE>
<TABLE>
<S>                                                                      <C>
                  3.       Total                                         $________

                  4.       Income Taxes paid                             $________

                  5.       Interest Expense                              $________

                  6.       Lease Expense (excluding all percentage
                           rents, property taxes and insurance
                           premiums payable under the Leases)            $________

                  7.       Required payments of
                           principal of Debt
                           (excluding Loans)                             $________

                  8.       Sum of (4) through (7)                        $________

                  9.       Ratio of (3) to (8)                            ___ to 1

                  10.      Minimum Required                              1.75 to 1
</TABLE>

<TABLE>
<CAPTION>
         B.       SECTION 10.6.2 - MAXIMUM DEBT TO EBITDA RATIO
<S>                                                                 <C>
                  1.       Debt                                        $________

                  2.       Net Income                                  $________

                  3.       Plus:    Interest Expense                   $________
                                    Income Tax expense                 $________
                                    depreciation                       $________
                                    amortization                       $________
                                    EBITDA imputed to
                                     theater complexes open
                                     less than 12 months*              $________

                  4.       Total    (EBITDA)                           $________

                  5.       Ratio of (1) to (4)                      _______ to 1

                  6.       Maximum allowed                          _______ to 1
</TABLE>

-----------------
*attach sheet showing a detailed calculation of this amount for each theater
complex
<PAGE>
<TABLE>
<CAPTION>
                C.         SECTION 10.6.3-MINIMUM TANGIBLE NET WORTH
<S>                                                              <C>
                         1.       Tangible Net Worth             $________

                         2.       Minimum required               $________
</TABLE>

<TABLE>
<CAPTION>
                D.         MAXIMUM AVAILABLE AMOUNT
<S>                                                                                   <C>
                1.       Lesser of $72,000,000 or 4.4 x EBITDA (prior to
                         February 28, 2001); 4 x EBITDA (after February 28,
                         2001 and prior to February 28, 2002);
                         and 3.5 x EBITDA (from and after February
                         28, 2002) = Maximum Available Amount                         $_________

                2.       Revolving Outstandings and Swingline Loans

                         Outstanding                                                  $_________

                3.       Net Availability  [Excess of Item 1 over Item 2]             $_________

                4.       Required Prepayment due as at the Calculation Date
                         [Excess of Item 2 over Item 1]                               $_________
</TABLE>

         The Company further certifies to you that no Event of Default or
Unmatured Event of Default has occurred and is continuing.

         IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its duly authorized officer on _________, ____.

                                        LOEKS-STAR PARTNERS
                                        By:: Loeks & Loeks Entertainment, Inc.
                                                      Its Partner

                                                By:
                                                     ___________________________
                                                     Barrie Lawson Loeks
                                                     Its: President

<PAGE>
         EXHIBIT F FORM OF MONTHLY MAXIMUM AVAILABLE AMOUNT CERTIFICATE

To:      Michigan National Bank, as Agent

Ladies and Gentlemen:

         Please refer to the Credit Agreement dated as of June 9, 1999 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
Loeks-Star Partners (the "Company"), various financial institutions and Michigan
National Bank, as agent. This certificate (this "Certificate"), together with
supporting calculations attached hereto, is delivered to you pursuant to the
terms of the Credit Agreement. Capitalized terms used but not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.

         The Company hereby certifies and warrants to the Agent and the Banks
that at the close of business on ______________, ____ (the "Calculation Date"),
the Maximum Available Amount was $_____________, computed as set forth on the
schedule attached hereto.

         IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its officer thereunto duly authorized on ___________,
______.

                                        LOEKS-STAR PARTNERS
                                        By:: Loeks & Loeks Entertainment, Inc.
                                                Its Partner

                                               By:____________________________
                                                  Barrie Lawson Loeks
                                                  Its: President
<PAGE>
                SCHEDULE TO MAXIMUM AVAILABLE AMOUNT CERTIFICATE

                          Dated as of _________________

<TABLE>
<S>                                                                              <C>
                1.       Net Income                                              $________

                2.       Plus:    Interest Expense                               $________
                                  Income Tax expense                             $________
                                  depreciation                                   $________
                                  amortization                                   $________
                                  EBITDA imputed to
                                   theater complexes open less than
                                   12 months*                                    $________

                3.       Total (EBITDA)                                          $________

                4.         Lesser of $72,000,000 or 4.4 x EBITDA (prior to
                         February 28, 2001); 4 x EBITDA (after February 28,
                         2001 and prior to February 28, 2002);
                          and 3.5 x EBITDA (from and after February
                          28, 2002) = Maximum Available Amount                   $_________

                5.         Revolving Outstandings and Swingline Loans
                          Outstanding                                            $_________

                6.       Net Availability  [Excess of Item 4 over Item 5]        $_________

                7.       Availability deficiency [Excess of Item 5 over Item 4]  $_________
</TABLE>

-----------------
*attach sheet showing a detailed calculation of this amount for each theater
complex
<PAGE>
                      FOURTH AMENDMENT TO CREDIT AGREEMENT

         THIS FOURTH AMENDMENT TO CREDIT AGREEMENT dated as of February 28, 2002
(the "Fourth Amendment") is entered into among LOEKS-STAR PARTNERS (the
"Company"), STANDARD FEDERAL BANK N.A. (formerly known as Michigan National
Bank), BANK ONE, MICHIGAN, FIFTH THIRD BANK (formerly known as Old Kent Bank),
NATIONAL CITY BANK MICHIGAN/ILLINOIS (together with their respective successors
and assigns, the "Banks") and STANDARD FEDERAL BANK N.A. (formerly known as
Michigan National Bank), as agent for the Banks.

         WHEREAS, on June 9, 1999, some of the Banks and the Company entered
into a Credit Agreement (as previously amended, the "Agreement"), which the
parties desire to amend as hereafter set forth;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree to amend the
Agreement as follows:

         1. The definition of Revolving Commitment Amount as set forth in the
Agreement is hereby amended in its entirety to read, as follows:

                  Revolving Commitment Amount means $80,000,000.00 prior to
            September 1, 2000, $72,000,000.00 from and after September 1, 2000
            through June 4, 2001, and $67,000,000.00 at all times from and after
            June 5, 2001, as reduced from time to time pursuant to Section 6.1.

         2. Schedule 2.1 attached to the Agreement is hereby amended and
replaced by Schedule 2.1 attached to the Fourth Amendment.

         3. Schedule 14.3 attached to the Agreement is hereby amended and
replaced by Schedule 14.3 attached to the Fourth Amendment.

         The Company hereby represents and warrants that each of the
representations and warranties set forth in the Agreement are true and accurate
as of the date of the Fourth Amendment.

         Except as expressly amended hereby, the Credit Agreement shall remain
in full force and effect.

         This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.

                                       1
<PAGE>
         Delivered at Troy, Michigan, as of the day and year first above
written, which shall be the effective date of this Amendment.

                                          LOEKS-STAR PARTNERS

                                          By: Loeks & Loeks Entertainment, Inc.,
                                          Its Partner

                                          By:       /s/ Barrie Loeks
                                                   -----------------------------

                                          Title:    President
                                                   -----------------------------

                                          STANDARD FEDERAL BANK N.A., as Agent

                                          By:       /s/ Lauren R. Fusco
                                                   -----------------------------

                                          Title:    Vice President
                                                   -----------------------------

                                          STANDARD FEDERAL BANK N.A., as Issuing
                                          Bank and as a Bank

                                          By:       /s/ Lauren R. Fusco
                                                   -----------------------------

                                          Title:    Vice President
                                                   -----------------------------

                                          BANK ONE, MICHIGAN

                                          By:       /s/ M.W. Frank
                                                   -----------------------------

                                          Title:    Director
                                                   -----------------------------

2
<PAGE>
                                          FIFTH THIRD BANK

                                          By:       /s/ G. B. B.
                                                   -----------------------------

                                          Title:    Vice President and Manager
                                                   -----------------------------

                                          NATIONAL CITY BANK MICHIGAN/ILLINOIS

                                          By:       /s/ B. Harkin
                                                   -----------------------------

                                          Title:    Vice President
                                                   -----------------------------

3
<PAGE>
                                  SCHEDULE 2.1

                            BANKS AND PRO RATA SHARES

<TABLE>
<CAPTION>
                                  Pro Rata Share
                                   of Revolving
        Bank                     Commitment Amount   Pro Rata Share
        ----                     -----------------   --------------
<S>                              <C>                 <C>
Standard Federal Bank N.A         $33,500,000.00          50%

Fifth Third Bank                  $12,562,500.00         18.75%

Bank One, Michigan                $10,887,500.00         16.25%

National City Bank

Michigan/Illinois                 $10,050,000.00            15%
-----------------                 --------------           ---

  TOTALS                          $67,000,000.00           100%
</TABLE>

4<PAGE>
                                                                   Exhibit 10.17

                               TERM LOAN AGREEMENT

                           Dated as of March 21, 2002

                                      among

                    LOEWS CINEPLEX ENTERTAINMENT CORPORATION,
                                  as Borrower,

                           THE LENDERS LISTED HEREIN,
                                   as Lenders,

                                       and

                             BANKERS TRUST COMPANY,
                             as Administrative Agent

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>     <C>                                                                                                   <C>
SECTION 1.                 DEFINITIONS.......................................................................    2

       1.1                 Certain Defined Terms.............................................................    2

       1.2                 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
                           Agreement.........................................................................   36

       1.3                 Other Definitional Provisions.....................................................   36

SECTION 2.                 AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................................   37

       2.1                 Commitments; Making of Loans; the Register; Notes.................................   37

       2.2                 Interest on the Loans.............................................................   41

       2.3                 Fees..............................................................................   45

       2.4                 Scheduled Payments of Loans; Prepayments of Loans; General Provisions
                           Regarding Payments................................................................   46

       2.5                 Use of Proceeds...................................................................   55

       2.6                 Special Provisions Governing Eurodollar Rate Loans................................   55

       2.7                 Increased Costs; Taxes; Capital Adequacy..........................................   58

       2.8                 Obligation of Lenders to Mitigate.................................................   63

SECTION 3.                 [INTENTIONALLY OMITTED]...........................................................   63

SECTION 4.                 CONDITIONS TO LOANS...............................................................   63

       4.1                 Conditions to Restructured Term Loans.............................................   64

       4.2                 Conditions to Supplemental Term Loans.............................................   71

       4.3                 Conditions to All Loans...........................................................   71

SECTION 5.                 COMPANY'S REPRESENTATIONS AND WARRANTIES..........................................   72

       5.1                 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.....   72

       5.2                 Authorization of Borrowing, etc...................................................   73

       5.3                 Financial Condition...............................................................   74

       5.4                 No Material Adverse Change; No Restricted Junior Payments.........................   75

       5.5                 Title to Properties; Liens........................................................   75

       5.6                 Litigation; Adverse Facts.........................................................   75

       5.7                 Payment of Taxes..................................................................   75
</TABLE>

                                      -i-

<PAGE>
                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<Caption>
                                                                                                               Page
<S>                                                                                                             <C>
       5.8                 Performance of Agreements; Materially Adverse Agreements; Material Contracts......   76

       5.9                 Governmental Regulation...........................................................   76

       5.10                Securities Activities.............................................................   76

       5.11                Employee Benefit Plans............................................................   76

       5.12                Certain Fees......................................................................   77

       5.13                Environmental Protection..........................................................   77

       5.14                Employee Matters..................................................................   79

       5.15                Solvency..........................................................................   79

       5.16                Disclosure........................................................................   79

       5.17                Matters Relating to Bankruptcy Proceedings........................................   80

       5.18                Insurance.........................................................................   80

       5.19                Intellectual Property.............................................................   80

       5.20                Cash Management System............................................................   80

       5.21                Merged Subsidiaries...............................................................   81

SECTION 6.                 COMPANY'S AFFIRMATIVE COVENANTS...................................................   81

       6.1                 Financial Statements and Other Reports............................................   81

       6.2                 Corporate and Limited Liability Company Existence, etc............................   86

       6.3                 Payment of Taxes and Claims; Tax Consolidation....................................   86

       6.4                 Maintenance of Properties; Insurance..............................................   87

       6.5                 Inspection; Lender Meeting........................................................   87

       6.6                 Compliance with Laws, etc.........................................................   88

       6.7                 Environmental Disclosure and Inspection...........................................   88

       6.8                 Company's Remedial Action Regarding Hazardous Materials...........................   90

       6.9                 Execution of Subsidiary Guaranty and Collateral Documents by Future
                           Subsidiaries......................................................................   90

       6.10                Matters Relating to Additional Real Property Collateral...........................   91

       6.11                Cash Management System............................................................   92

       6.12                Unsecured Settlement Distribution.................................................   92

       6.13                Ratings...........................................................................   93
</TABLE>

                                      -ii-

<PAGE>
                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<Caption>
                                                                                                               Page
<S>                                                                                                             <C>
       6.14                Employee Benefit Plans............................................................   93

       6.15                Dissolved or Disposed Subsidiaries................................................   93

SECTION 7.                 COMPANY'S NEGATIVE COVENANTS......................................................   93

       7.1                 Indebtedness......................................................................   93

       7.2                 Liens and Related Matters.........................................................   95

       7.3                 Investments; Joint Ventures.......................................................   98

       7.4                 Contingent Obligations............................................................   99

       7.5                 Restricted Junior Payments; Certain Other Payments................................  101

       7.6                 Financial Performance Covenants...................................................  101

       7.7                 Restriction on Fundamental Changes; Asset Sales and Acquisitions..................  103

       7.8                 Fiscal Year.......................................................................  104

       7.9                 Sale or Discount of Receivables...................................................  104

       7.10                Transactions with Shareholders and Affiliates.....................................  104

       7.11                Disposal of Subsidiary Stock......................................................  105

       7.12                Conduct of Business...............................................................  105

       7.13                Capital Expenditures..............................................................  106

       7.14                Amendments of Documents Relating to Subordinated Indebtedness and
                           Organizational Documents..........................................................  107

       7.15                CCAA Plan of Arrangement..........................................................  107

SECTION 8.                 EVENTS OF DEFAULT.................................................................  108

       8.1                 Failure to Make Payments When Due.................................................  108

       8.2                 Default in Other Agreements.......................................................  108

       8.3                 Breach of Certain Covenants.......................................................  108

       8.4                 Breach of Warranty................................................................  108

       8.5                 Other Defaults Under Term Loan Documents..........................................  108

       8.6                 Involuntary Bankruptcy; Appointment of Receiver, etc..............................  109

       8.7                 Voluntary Bankruptcy; Appointment of Receiver, etc................................  109

       8.8                 Judgments and Attachments.........................................................  109

       8.9                 Dissolution.......................................................................  110
</TABLE>

                                      -iii-

<PAGE>
                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<Caption>
                                                                                                               Page
<S>                                                                                                            <C>
       8.10                Employee Benefit Plans............................................................  110

       8.11                Change in Control.................................................................  110

       8.12                Invalidity of Subsidiary Guaranty.................................................  110

       8.13                Failure of Security...............................................................  110

SECTION 9.                 ADMINISTRATIVE AGENT..............................................................  111

       9.1                 Appointment.......................................................................  111

       9.2                 Powers and Duties; General Immunity...............................................  112

       9.3                 Representations and Warranties; No Responsibility For Appraisal of
                           Creditworthiness..................................................................  113

       9.4                 Right to Indemnity................................................................  113

       9.5                 Successor Agent...................................................................  114

       9.6                 Intercreditor Agreement; Collateral Documents and Subsidiary Guaranty.............  114

SECTION 10.                MISCELLANEOUS.....................................................................  115

       10.1                Assignments and Participations in Loans...........................................  115

       10.2                Expenses..........................................................................  117

       10.3                Indemnity.........................................................................  118

       10.4                Set-Off; Security Interest in Deposit Accounts....................................  119

       10.5                Ratable Sharing...................................................................  120

       10.6                Amendments and Waivers............................................................  120

       10.7                Independence of Covenants.........................................................  122

       10.8                Notices...........................................................................  122

       10.9                Survival of Representations, Warranties and Agreements............................  122

       10.10               Failure or Indulgence Not Waiver; Remedies Cumulative.............................  123

       10.11               Marshalling; Payments Set Aside...................................................  123

       10.12               Severability......................................................................  123

       10.13               Obligations Several; Independent Nature of Lenders' Rights........................  123

       10.14               Headings..........................................................................  124

       10.15               Applicable Law....................................................................  124

       10.16               Successors and Assigns............................................................  124
</TABLE>

                                      -iv-

<PAGE>
                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<Caption>
                                                                                                               Page
<S>                                                                                                            <C>
       10.17               Consent to Jurisdiction and Service of Process....................................  124

       10.18               Waiver of Jury Trial..............................................................  125

       10.19               Confidentiality...................................................................  125

       10.20               Counterparts; Effectiveness.......................................................  126

         Signature pages            .........................................................................  S-1

</TABLE>

                                      -v-
<PAGE>

                                    SCHEDULES

<TABLE>
<S>               <C>
1.1C              CERTAIN ASSETS TO BE SOLD
1.1E              REORGANIZATION COSTS
1.1L              EXISTING LETTERS OF CREDIT
1.1W              CERTAIN OPERATING LEASES
1.1WH             WHOLLY OWNED TOTAL DEBT
2.1               LENDERS' COMMITMENTS AND PRO RATA SHARES
2.3D              ALLOCATION OF FEES
4.1A(i)           CERTAIN GOOD STANDING CERTIFICATES
4.1B(i)           CAPITAL AND OWNERSHIP STRUCTURE
4.1B(ii)          MANAGEMENT STRUCTURE
4.1G              CLOSING DATE MORTGAGED PROPERTIES
4.1U              CERTAIN FINANCIAL INFORMATION
5.1A              LOAN PARTIES NOT IN GOOD STANDING
5.1D              SUBSIDIARIES OF COMPANY
5.4               CERTAIN RESTRICTED JUNIOR PAYMENTS
5.6               LITIGATION
5.11(c)           CERTAIN EMPLOYEE BENEFIT PLANS
5.12              CERTAIN FEES
5.13              ENVIRONMENTAL MATTERS
5.14              CERTAIN EMPLOYEE MATTERS
5.18              INSURANCE
5.21              MERGED SUBSIDIARIES
6.11              CASH MANAGEMENT SYSTEM
6.15              DISSOLVED SUBSIDIARIES
7.1(vi)           CERTAIN EXISTING INDEBTEDNESS
7.2A(v)           CERTAIN EXISTING LIENS
7.3A(v)           CERTAIN EXISTING INVESTMENTS
7.3B              PROHIBITED INVESTMENTS
7.4(v)            CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.9               CERTAIN DISCOUNTED RECEIVABLES
7.10(v)           AFFILIATE TRANSACTIONS
7.13B             SCHEDULED 2003 NEW BUILD CAPITAL EXPENDITURES
</TABLE>

<PAGE>

                                    EXHIBITS

<TABLE>
<S>               <C>
I                 FORM OF NOTICE OF BORROWING
II                FORM OF NOTICE OF CONVERSION/CONTINUATION
III-A             FORM OF RESTRUCTURED TERM NOTE
III-B             FORM OF SUPPLEMENTAL TERM NOTE
IV                FORM OF COMPLIANCE CERTIFICATE
V                 FORM OF INTERCOMPANY NOTE
VI-A              FORM OF OPINION OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
VI-B              FORM OF OPINION OF DAVIES WARD PHILLIP & VINEBERG LLP
VII               FORM OF OPINION OF O'MELVENY & MYERS LLP
VIII-A            FORM OF ASSIGNMENT AGREEMENT
VIII-B            FORM OF ASSIGNMENT AGREEMENT (RELATED FUND)
IX                FORM OF CERTIFICATE RE NON-BANK STATUS
X                 FORM OF COLLATERAL ACCOUNT AGREEMENT
XI                FORM OF SECURITY AGREEMENT
XII               FORM OF SUBSIDIARY GUARANTY
XIII              FORM OF INTERCREDITOR AGREEMENT
XIV               FORM OF SUPPLEMENTAL TERM LOAN ACCEPTANCE
XV-A              FORM OF CANADIAN MORTGAGE
XV-B              FORM OF UNITED STATES MORTGAGE
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                               TERM LOAN AGREEMENT

                  This TERM LOAN AGREEMENT is dated as of March 21, 2002 and
entered into by and among LOEWS CINEPLEX ENTERTAINMENT CORPORATION, a Delaware
corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE 2.1
HERETO (each individually referred to herein as a "LENDER" and collectively as
"LENDERS"), and BANKERS TRUST COMPANY ("BTCo"), as administrative agent for
Lenders (in such capacity, "ADMINISTRATIVE AGENT").

                                 R E C I T A L S

                  WHEREAS, Company, the Pre-Petition Lenders, and BTCo, as
administrative agent, are parties to the Pre-Petition Credit Agreement (such
terms and other capitalized terms used in these recitals being used as defined
in subsection 1.1).

                  WHEREAS, on February 15, 2001, Company and Subsidiary Debtors
filed voluntary petitions for relief under the Bankruptcy Code with the
Bankruptcy Court (such proceedings are hereinafter referred to as the "CHAPTER
11 CASES"), and Company and Subsidiary Debtors have continued to operate their
businesses and manage their properties as debtors-in-possession pursuant to
Sections 1107 and 1108 of the Bankruptcy Code.

                  WHEREAS, on February 15, 2001, Cineplex Odeon and certain of
its subsidiaries applied to the Superior Court of Justice of Ontario for an
order declaring Cineplex Odeon and the other applicants to be companies to which
the CCAA applies.

                  WHEREAS, Company, Subsidiary Debtors, the DIP Lenders and
BTCo, as administrative agent, are parties to the DIP Credit Agreement.

                  WHEREAS, Company and Subsidiary Debtors have proposed, their
creditors have approved and the Bankruptcy Court has confirmed the Plan of
Reorganization;

                  WHEREAS, Cineplex Odeon and the other applicants in the CCAA
Proceedings have proposed, their creditors have approved and the Canadian Court
has sanctioned the CCAA Plan of Arrangement;

                  WHEREAS, pursuant to the Plan of Reorganization:

                  A. an aggregate of $300,000,000 of (y) unpaid revolving loans
and unpaid interest thereon under the Pre-Petition Credit Agreement held by or
managed by the Sponsors and (z) loans made under the Post-Default Advances
Sublimit under the DIP Credit Agreement held by or managed by the Sponsors (the
"SPONSOR CONVERSION AMOUNT") shall be converted into equity of Company;

                  B. an aggregate of $437,590,329.45 of (y) unpaid revolving
loans and unpaid interest thereon under the Pre-Petition Credit Agreement held
by the Lenders having Restructured Term Loan Commitments, and (z) loans made
under the Post-Default Advances Sublimit under the DIP Credit Agreement held by
the Lenders having Restructured Term Loan

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Commitments shall be deemed paid in full from the proceeds of the Restructured
Term Loans, the amount of which Restructured Term Loans shall be equal to the
sum of (i) 98.25% of such aggregate amount and (ii) the aggregate amount of
accrued but unpaid letter of credit fees under the Pre-Petition Credit
Agreement; and

                  C. loans made under the Post-Petition Incremental US Sublimit
and the Post-Petition Incremental Canadian Sublimit and outstanding letters of
credit issued under the DIP Credit Agreement and outstanding letters of credit
issued under the Pre-Petition Credit Agreement shall be refinanced in full under
the Priority Secured Credit Agreement; and

                  WHEREAS, subject to the terms set forth herein, the parties
wish to provide for the inclusion of Supplemental Term Loans to be made
hereunder;

                  NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained and pursuant to the Plan
of Reorganization, Company, Lenders and Administrative Agent agree as follows:

SECTION 1.        DEFINITIONS

                  1.1      CERTAIN DEFINED TERMS.

                  The following terms used in this Agreement shall have the
following meanings:

                  "ACQUIRED INDEBTEDNESS" means Indebtedness assumed by Company
or a Wholly Owned North American Subsidiary of Company in connection with a
Permitted Supplemental Term Loan Acquisition and not incurred in contemplation
of such Permitted Supplemental Term Loan Acquisition.

                  "ACQUISITION EXPENDITURE AMOUNT" has the meaning assigned that
term in subsection 7.3A(viii).

                  "ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.10B.

                  "ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to
that term in subsection 6.10B.

                  "ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to a Eurodollar Rate Loan, the rate per annum
obtained by dividing (i) the offered quotation (rounded upward to the nearest
1/16 of one percent) to first class banks in the interbank Eurodollar market by
BTCo for U.S. Dollar deposits of amounts in same day funds comparable to the
principal amount of the Eurodollar Rate Loan of BTCo for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to the
Interest Period for which such Adjusted Eurodollar Rate will apply as of
approximately 10:00 a.m. (New York time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to

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any member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).

                  "ADMINISTRATIVE AGENT" means BTCo in its capacity as
Administrative Agent hereunder and under the other Term Loan Documents.

                  "AFFECTED CLASS" has the meaning set forth in subsection
10.6A.

                  "AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.

                  "AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6C.

                  "AFFILIATE," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

                  "AFFILIATED FUND" means, with respect to any Lender, a fund
that invests in commercial loans and is administered or managed by the same
investment advisor or manager as such Lender, an Affiliate of such Lender or by
an Affiliate of the same investment advisor or manager as such Lender.

                  "AGGREGATE AMOUNTS DUE FROM COMPANY" has the meaning set forth
in subsection 10.5.

                  "AGGREGATE CAPITAL EXPENDITURE LIMIT" has the meaning set
forth in subsection 7.13D.

                  "AGREEMENT" means this Term Loan Agreement dated as of March
21, 2002, as it may be amended, restated, supplemented or otherwise modified
from time to time.

                  "ALTERNATIVE PRIVATE EQUITY PREPAYMENT AMOUNT" has the meaning
set forth in subsection 2.4B(ii)(d)(2)(B).

                  "APPLICABLE BASE RATE MARGIN" has the meaning assigned to that
term in subsection 2.2A(i).

                  "APPLICABLE EURODOLLAR RATE MARGIN" has the meaning assigned
to that term in subsection 2.2A(i).

                  "APPLICABLE LEVERAGE RATIO" means the Leverage Ratio
calculated as of the date for which an Officer's Certificate or Compliance
Certificate has been delivered pursuant to subsection 4.1F or subsection 6.1(iv)
and such Applicable Leverage Ratio shall remain in effect until the next date of
delivery of a Compliance Certificate (and related financial information required
at such time pursuant to subsection 6.1) pursuant to subsection 6.1(iv);
provided that,

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without limiting any Event of Default or Potential Event of Default that may
result therefrom, if Company does not deliver any Compliance Certificate
required pursuant to subsection 6.1(iv) by the date specified therefor, then the
Applicable Leverage Ratio shall not be decreased until and following the actual
date of delivery thereof, and if the Applicable Leverage Ratio is required to be
increased as a result of the information in such Compliance Certificate, then
such increase shall be retroactive to the date such Compliance Certificate was
originally required to be delivered hereunder.

                  "APPLICABLE MARGIN" means, as the context requires, either the
Applicable Base Rate Margin or the Applicable Eurodollar Rate Margin.

                  "ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its Wholly Owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a) inventory sold
in the ordinary course of business, (b) obsolete equipment and (c) any such
other assets to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $500,000 or
less).

                  "ASSET SWAP" means the exchange by Company or any of its
Wholly-Owned North American Subsidiaries with any Person other than Company or
any of its Subsidiaries, of any theater assets of Company or any of its
Wholly-Owned North American Subsidiaries for like assets of such Person.

                  "ASSIGNMENT AGREEMENT" means, in the case of an assignment of
Loans to an Affiliate of the assigning Lender, an Assignment Agreement in
substantially the form of Exhibit VIII-A annexed hereto and, in all other cases,
an Assignment Agreement (Related Fund) in substantially the form of Exhibit
VIII-B annexed hereto.

                  "BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.

                  "BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of New York.

                  "BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.

                  "BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.

                  "BTCO" means Bankers Trust Company.

                  "BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close, and (ii) with respect to all

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notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in U.S. Dollar deposits in the applicable interbank Eurodollar market.

                  "CANADIAN BENEFIT PLANS" means all material employee benefit
plans of any nature or kind whatsoever that are not Canadian Pension Plans and
are maintained or contributed to by Company, Cineplex Odeon or any of Company's
Subsidiaries having employees in Canada.

                  "CANADIAN CCAA CREDIT AGREEMENT" means that certain Canadian
Liquidity Credit Agreement dated as of February 28, 2001 by and among Cineplex
Odeon, as borrower, Company, as lender thereunder, and Deutsche Bank Canada, as
administrative agent for the lender thereunder, as it may be amended, restated,
supplemented or otherwise modified from time to time.

                  "CANADIAN COURT" means the Superior Court of Justice of
Ontario.

                  "CANADIAN DOLLARS" or "CN$" means the lawful money of Canada.

                  "CANADIAN PENSION PLANS" means each plan which is considered
to be a pension plan for the purposes of any applicable pension benefits
standards statute and/or regulation in Canada established, maintained or
contributed to by Company, Cineplex Odeon or any of Company's other Subsidiaries
for their employees or former employees in Canada.

                  "CAPEX REFERENCED LEVERAGE RATIO" means the Leverage Ratio as
at February 28 or 29, as the case may be, of the Fiscal Year immediately
preceding the Fiscal Year for which limitations of Consolidated New Build
Capital Expenditures or Off-Balance Sheet New Build Capital Expenditures, as the
case may be, are measured.

                  "CAPITAL EXPENDITURES" means, for any period, the sum of (i)
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases which is
capitalized on the balance sheet of Company and its Subsidiaries) by Company and
its Subsidiaries during that period that, in conformity with GAAP, are included
in "additions to property, plant or equipment" or comparable items reflected in
the consolidated statement of cash flows of Company and its Subsidiaries plus
(ii) to the extent not covered by clause (i) of this definition, the aggregate
of all expenditures by Company and its Subsidiaries during that period to
acquire (by purchase or otherwise) the business, property or fixed assets of
Company and its Subsidiaries, or the stock or other evidence of beneficial
ownership of any Person other than Company or any of its Subsidiaries; provided
that Capital Expenditures shall not include expenditures for Permitted
Investments and Permitted Acquisitions made in compliance with subsections
7.3A(viii) and 7.7(iii) and the non-cash portion of Asset Swaps made in
compliance with subsection 7.7(vii). For the avoidance of doubt, landlord
allowances to the extent received by Company and its Wholly Owned Subsidiaries
in cash in connection with leased properties shall be counted as reductions of
Capital Expenditures.

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                  "CAPITAL LEASE," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person; provided that, with respect to Company and its Subsidiaries,
"Capital Lease" shall also include any lease that Company or any of its
Subsidiaries is a party to with respect to a theatre which has been closed by
Company or such Subsidiary, as the case may be, and for which Company or such
Subsidiary, as the case may be, has established a liability on its balance sheet
in accordance with GAAP.

                  "CASH" means money, currency or a credit balance in a Deposit
Account.

                  "CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (1) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (2) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or Moody's; (c) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (d) certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia that (1) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (2) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (e) shares of any money market mutual fund that (1)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (a) and (b) above, (2) has net assets of not less than
$500,000,000, and (3) has the highest rating obtainable from either S&P or
Moody's.

                  "CASH MANAGEMENT SYSTEM" means the cash management system of
Company and Subsidiary Guarantors described in Schedule 6.11.

                  "CCAA" means the Companies' Creditors Arrangement Act, R.S.C
1985, C. C-36, as amended.

                  "CCAA PLAN OF ARRANGEMENT" means the Plan of Compromise and
Arrangement of Cineplex Odeon and certain of its Wholly Owned Subsidiaries under
the CCAA Proceedings, dated February 22, 2002.

                  "CCAA PROCEEDINGS" means the proceedings commenced on February
15, 2001 by Cineplex Odeon and certain of its Wholly Owned Subsidiaries under
the CCAA in the Superior Court of Justice of Ontario and having court file no.
01-CL-4024.

                  "CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit IX annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).

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                  "CHANGE OF CONTROL" means (x) prior to an Initial Public
Offering, Sponsors and the Sponsor Affiliates shall cease to own or manage at
least 51% of Company's total voting securities and (y) after an Initial Public
Offering either (i) Sponsors and the Sponsor Affiliates shall cease to own or
manage at least 35% of Company's total voting securities or (ii) any other
Person or two or more Persons acting in concert as a group (within the meaning
of Rule 13d-3 under the Exchange Act) shall beneficially own a greater
percentage of Company's total voting securities than Sponsors beneficially own.

                  "CHANGE IN LAW" means the enactment, promulgation, execution
or ratification of, or any change in, modification of, or amendment to, any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof.

                  "CHAPTER 11 CASES" has the meaning assigned to that term in
the Recitals hereto.

                  "CINEPLEX ODEON" means Cineplex Odeon Corporation, a
corporation formed under the laws of the province of Ontario, Canada.

                  "CLASS" means, as applied to Lenders, each of the following
two classes of Lenders: (i) Lenders making Restructured Term Loans and (ii)
Lenders making Supplemental Term Loans (all of which constitute a single class).

                  "CLOSING DATE" means the date on or before March 31, 2002, on
which the conditions set forth in subsection 4.1 have been satisfied by Company
or have been waived in writing by Requisite Lenders.

                  "CLOSING DATE MORTGAGED PROPERTY" and "CLOSING DATE MORTGAGED
PROPERTIES" have the meanings set forth in subsection 4.1G(i).

                  "CLOSING DATE MORTGAGE" and "CLOSING DATE MORTGAGES" have the
meanings set forth in subsection 4.1G(i).

                  "COLLATERAL" means, collectively, all of the personal property
(including capital stock) in which Liens are purported to be granted by the
Collateral Documents.

                  "COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.

                  "COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Collateral Agent on the Closing
Date, substantially in the form of Exhibit X annexed hereto, as such Collateral
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.

                  "COLLATERAL AGENT" means BTCo acting in the capacity of
collateral agent on behalf of the Lenders, the Administrative Agent, the
Priority Secured Lenders and the administrative agent under the Priority Secured
Credit Agreement and other Persons that may become parties to the Intercreditor
Agreement, in each case under the Collateral Documents.

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                  "COLLATERAL DOCUMENTS" means the Collateral Account Agreement,
Security Agreement, the Mortgages and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Term
Loan Documents to grant to Collateral Agent, on behalf of the Lenders and/or the
Priority Secured Lenders, a Lien on any real, personal, immovable, movable or
mixed property of that Loan Party as security for the Obligations.

                  "COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.

                  "COMPANY-FUNDED UNSECURED SETTLEMENT AMOUNT" means the
difference between (1) the lesser of (x) $20,000,000 and (y) the difference
between (i) $50 million and (ii) the sum of (a) the aggregate amount of loans
under the Post-Petition Incremental US Sublimit and the Post-Petition
Incremental Canadian Sublimit of the DIP Credit Agreement outstanding on the
Closing Date, (b) all unpaid reasonable and customary closing expenses, fees and
bankruptcy-related expenses, in each case whether incurred or to be incurred
before, on or after the Closing Date (provided that the fees due to the Lenders
under this Agreement shall be excluded from this amount), (c) all incurred but
unpaid Capital Expenditures related to Designated Projects (provided that
amounts due with respect to the West 34th Street Project shall be excluded in an
amount equal to $7,392,244.00), and (d) normal working capital levels, as agreed
between Administrative Agent and Company and (2) $5,000,000 .

                  "COMPETITOR" means any Person engaged directly or indirectly,
or having any Affiliate engaged directly or indirectly, in the production,
distribution or exhibition of motion pictures.

                  "COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit IV annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 6.1(iv).

                  "CONFIRMATION ORDER" means that certain Order Confirming Plan
of Reorganization entered by the Bankruptcy Court on March 1, 2002, without
modification, revision or amendment.

                  "CONSOLIDATED NEW BUILD CAPITAL EXPENDITURE ALLOWANCE" has the
meaning set forth in subsection 7.13B(i).

                  "CONSOLIDATED NEW BUILD CAPITAL EXPENDITURES" means, for any
period, New Build Capital Expenditures other than Off-Balance Sheet New Build
Capital Expenditures during such period.

                  "CONTINGENT OBLIGATION," as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the

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account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Interest Rate Agreements and Currency
Agreements. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.

                  "CONTRACTUAL OBLIGATION," as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

                  "COVERED TAX" or "COVERED TAXES" means all Tax or Taxes other
than any Excluded Tax or Excluded Taxes.

                  "CURE AMOUNT" means the amount of cash received by Company
pursuant to the exercise by Company of its Cure Rights.

                  "CURE RIGHTS" means the rights of Company pursuant to
subsection 7.6C to sell Permitted Cure Securities to Sponsors for cash and apply
the proceeds of such sale to cause compliance with the Financial Performance
Covenants in the manner specified in such subsection.

                  "CURE RIGHTS PROHIBITION PERIOD" means, if Cure Rights are
exercised in any two consecutive Fiscal Quarters, the four consecutive Fiscal
Quarters following the latest date of such exercise, during which no Cure Rights
may be exercised.

                  "CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.

                  "CUTOFF DATE" has the meaning set forth in subsection
2.4(B)(iii)(f).

                  "DEBT SECURITIES PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(c).

                  "DEBT SERVICE COVERAGE RATIO" means, as of any date of
determination, the ratio of (i) Wholly Owned EBITDAR for the most recently ended
four Fiscal Quarter period to (ii) the

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sum of (a) Wholly Owned Total Debt Interest Expense for such four Fiscal Quarter
period plus (b) Wholly Owned Rent Expense for such four Fiscal Quarter period
plus (c) scheduled principal payments on the Loans required to be made under
subsection 2.4A during such four Fiscal Quarter period plus (d) scheduled
principal payments on the Priority Secured Loans required to be made under
subsection 2.4A of the Priority Secured Credit Agreement during such four Fiscal
Quarter period plus (e) scheduled payments of Indebtedness other than the Loans,
the Priority Secured Loans and Indebtedness under the West 34th Street Loan
Agreement and West 34th Street Note required to be made during such four Fiscal
Quarter period; provided that, solely for purposes of calculating the Debt
Service Coverage Ratio, (i) Wholly Owned Total Debt Interest Expense for the
four-Fiscal Quarter period ending on the last day of the Fiscal Quarter
including the Closing Date shall equal Wholly Owned Total Debt Interest Expense
for such Fiscal Quarter multiplied by four, (ii) Wholly Owned Total Debt
Interest Expense for the four-Fiscal Quarter period ending on the last day of
the first full Fiscal Quarter occurring after the Fiscal Quarter including the
Closing Date shall equal the aggregate amount of Wholly Owned Total Debt
Interest Expense for such Fiscal Quarter and the Fiscal Quarter including the
Closing Date multiplied by two, (iii) Wholly Owned Total Debt Interest Expense
for the four-Fiscal Quarter period ending on the last day of the second full
Fiscal Quarter occurring after the Fiscal Quarter including the Closing Date
shall equal the aggregate amount of Wholly Owned Total Debt Interest Expense for
such Fiscal Quarter, the immediately preceding Fiscal Quarter and the Fiscal
Quarter including the Closing Date multiplied by four-thirds and (iv) principal
payments under clauses (ii)(c), (d) and (e) above shall be annualized in the
manner that Wholly Owned Total Debt Interest Expense is annualized in clauses
(i), (ii) and (iii) of this proviso; provided further that, solely for purposes
of calculating the Debt Service Coverage Ratio for any four Fiscal Quarter
period including the Closing Date, Wholly Owned Total Debt Interest Expense
shall not include any Interest Expense from the first day of the Fiscal Quarter
including the Closing Date to and including the Closing Date with respect to the
Sponsor Conversion Amount.

                  "DEEMED MAJOR ASSET SALE PROCEEDS" means Net Asset Sale
Proceeds in excess of $20,000,000 of Net Asset Sale Proceeds in respect of Minor
Asset Sales made in any Fiscal Year.

                  "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.

                  "DESIGNATED PROJECTS" has the meaning assigned to that term in
the DIP Credit Agreement.

                  "DIP CREDIT AGREEMENT" means that certain Debtor-In-Possession
Credit Agreement dated as of February 15, 2001, as amended, among Company, the
Subsidiary Borrowers named therein, the DIP Lenders, and BTCo, as administrative
agent.

                  "DIP LENDERS" means the parties identified as lenders and
indemnifying lenders under the DIP Credit Agreement in their capacities as
lenders under the DIP Credit Agreement, together with their successors and
assigns.

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                  "DISCLOSURE STATEMENTS" means the Disclosure Statements for
Debtors' First Amended Chapter 11 Plan dated January 14, 2001 approved by the
Bankruptcy Court and soliciting approval of the Plan of Reorganization of the
creditors of Company and Subsidiary Debtors by Company and the Sponsors and the
Notice of Meeting of Creditors and Information Circular dated January 28, 2002
soliciting approval of the Plan of Compromise and Arrangement of Cineplex Odeon
and certain of its Subsidiaries.

                  "EBITDA" means, for any period, for any Person the sum of the
amounts, without duplication of component amounts, for such period of (i) Net
Income, (ii) Interest Expense, (iii) any amounts payable under subsection 2.3 of
this Agreement or subsection 2.3 of the Priority Secured Credit Agreement
through to the Closing Date to the extent such amounts have been deducted from
Net Income and excluded from Interest Expense, (iv) provisions for taxes based
on income or equity, (v) total depreciation expense, (vi) total amortization
expense, (vii) all extraordinary losses reducing Net Income, including losses
arising from the sale or disposition of assets, less all extraordinary gains
increasing Net Income, (viii) any amounts representing the amortization of
deferred financing expense (to the extent not already included in (a) Interest
Expense or (b) clause (iii) above), (ix) other non-cash items reducing Net
Income (including Operating Lease adjustments required under GAAP) less other
non-cash items increasing Net Income (including Operating Lease adjustments
required under GAAP), (x) one-time costs and expenses, whether cash or non-cash,
associated with the restructuring and reorganization of Company and its
Subsidiaries pursuant to the Plan of Reorganization and CCAA Plan of Arrangement
incurred during the applicable measurement period, including the costs and
expenses described on Schedule 1.1E (to the extent not already included in
clause (iii) above); provided that to the extent the aggregate actual amount of
the costs and expenses described on Schedule 1.1E, together with any other
restructuring and reorganization costs and expenses paid in cash after the
Closing Date, exceeds the aggregate amount of the costs and expenses set forth
on Schedule 1.1E, such excess shall be deemed to be, and shall be treated as,
non-operating expenses under clause (xii) of this definition of "EBITDA," (xi)
non-cash non-recurring and other one-time non-operating expenses (unless
subsequently paid in cash in the applicable measurement period), (xii)
non-recurring and other one-time non-operating expenses to be paid in cash;
provided that, in the case of Company and its Subsidiaries, to the extent that
such expenses are paid in cash during the applicable measurement period and
exceed $15,000,000 in the Fiscal Year ending February 28, 2003 or $7,500,000 in
any Fiscal Year thereafter, the excess will not be added back in the applicable
measurement period; provided further that if such expenses are less than
$15,000,000 in the Fiscal Year ending February 28, 2003 or $7,500,000 in any
Fiscal Year thereafter, the applicable limit set forth in the preceding proviso
for the immediately succeeding Fiscal Year shall be increased by such
difference, or such greater amount as Administrative Agent may approve, in its
sole discretion, based on such financial information projections and detail as
Company may provide, (xiii) the effect of accounting changes pursuant to opinion
No. 20 of the Accounting Principles Board and (xiv) Management Fees incurred
during such period, all of the foregoing as determined on a consolidated basis
for such Person and its Subsidiaries in conformity with GAAP.

                  "ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof having a combined
capital and surplus of at least $250,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof having a combined capital and surplus of at least

                                       11
<PAGE>

$250,000,000; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof having a combined capital and surplus
of at least $250,000,000; provided that (x) such bank is acting through a branch
or agency located in the United States or (y) such bank is organized under the
laws of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country; and (iv) any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans in the ordinary course of its
businesses including, but not limited to, insurance companies, mutual funds and
lease financing companies; and (B) any Lender and any Affiliate of any Lender
and any Affiliated Fund of any Lender; provided that no Competitor other than
the Sponsors and Sponsor Affiliates shall be an Eligible Assignee.

                  "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by Company or any of its ERISA Affiliates.

                  "ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.

                  "ENVIRONMENTAL LAWS" means all applicable statutes,
ordinances, orders, rules, regulations, plans, policies or decrees and
requirements having the force of law relating to (i) environmental matters,
including, without limitation, those relating to fines, injunctions, penalties,
damages, contribution, cost recovery compensation, losses or injuries resulting
from the Release or threatened Release of Hazardous Materials, (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials, or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare from environmental
hazards, in any manner applicable to Company or any of its Subsidiaries or any
of their respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601
et seq.) ("CERCLA"), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous future or present
local, state, provincial and federal statutes and regulations promulgated
pursuant thereto, each as in effect as of the date of determination.

                  "EQUIVALENT AMOUNT" in one currency on any day means the
amount of that currency into which a specified amount of another currency can be
converted at the Bank of

                                       12
<PAGE>

Canada's noon spot rate of exchange for such currency or Administrative Agent's
noon spot rate of exchange for such currency if such amount is being determined
by Administrative Agent (or at any other rate of exchange for such currency to
which Company and Administrative Agent agree) and if that day is not a Business
Day, on the immediately preceding Business Day.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.

                  "ERISA AFFILIATE," as applied to any Person, means (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of
which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is a member. Any former ERISA
Affiliate of a Person shall continue to be considered an ERISA Affiliate within
the meaning of this definition with respect to the period such entity was an
ERISA Affiliate of the Person and with respect to liabilities arising after such
period for which the Person could be liable under the Internal Revenue Code or
ERISA.

                  "ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Company or any of its ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which is reasonably likely to result in the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Company or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal by Company or any of its ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan which is reasonably likely
to result in the imposition of withdrawal liability therefor, or the receipt by
Company or any of its ERISA Affiliates of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA, or that it intends to terminate or has terminated under Section 4041A or
4042 of ERISA; (viii) the occurrence of an act or omission which is reasonably
likely to result in the imposition on Company or any of its ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any

                                       13
<PAGE>

Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company or any of its ERISA
Affiliates in connection with any such Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.

                  "EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.

                  "EVENT OF DEFAULT" means each of the events set forth in
Section 8.

                  "EXCESS CASH FLOW" means, for any period, an amount (if
positive), equal to (i) the amount for such period of Wholly Owned EBITDA minus
(ii) the sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled repayments of Wholly Owned Total Debt actually made
(excluding (1) repayments of Priority Secured Revolving Loans to the extent the
Priority Secured Revolving Loan Commitments are not permanently reduced in
connection with such repayments and (2) repayments of Indebtedness under the
West 34th Street Loan Agreement and West 34th Street Note), (b) Excess Cash Flow
Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures), (c) Wholly Owned Total Debt Interest Expense to the
extent paid in cash by Company and its Wholly Owned Subsidiaries, (d) Permitted
Investments and Permitted Acquisitions to the extent made in cash by Company or
any of its Wholly Owned Subsidiaries (net of any proceeds of any related
financings with respect to such Permitted Investments and Permitted
Acquisitions) (it being acknowledged and agreed that Investments made pursuant
to subsection 7.3A(x) do not constitute Permitted Investments), (e) provisions
for Taxes based on income or equity of Company and its Wholly Owned Subsidiaries
to the extent paid in cash with respect to such periods, (f) all fees paid in
cash by Company and its Wholly Owned Subsidiaries to Administrative Agent and
the Lenders under subsection 2.3 of this Agreement and to the Priority Secured
Administrative Agent and Priority Secured Lenders under subsection 2.3 of the
Priority Secured Credit Agreement (other than commitment fees payable under
subsection 2.3A of the Priority Secured Credit Agreement) and any fees payable
in connection with an amendment, waiver or other modification to this Agreement
or the Priority Secured Credit Agreement, and (g) amounts paid in cash by
Company and its Wholly Owned Subsidiaries to the extent included in clause (x)
through (xiv) of the definition of "EBITDA."

                  "EXCESS CASH FLOW CAPITAL EXPENDITURES" means, for any period,
the amount of all Capital Expenditures paid in cash (other than Off-Balance
Sheet New Build Capital Expenditures) for such period less the amount of
Retained Proceeds Available for CapEx used to increase the Consolidated New
Build Capital Expenditure Allowance for such period pursuant to subsection
7.13B(i)(b) to the extent applied as Capital Expenditures during such period.

                                       14
<PAGE>

                  "EXCESS CASH FLOW PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(e).

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.

                  "EXCLUDED TAX" or "EXCLUDED TAXES" means Tax or Taxes imposed
on or measured by a Person's net income, profits or gains (including any
franchise or similar Taxes imposed in lieu thereof and any branch profits Taxes)
by the United States (or any political subdivision or taxing authority thereof
or therein) or by the jurisdiction (or any political subdivision or taxing
authority thereof or therein) under the laws of which the Lender is organized,
has its principal office or has its applicable lending office.

                  "EXISTING LETTERS OF CREDIT" means letters of credit
outstanding on the Closing Date issued under the Pre-Petition Credit Agreement
and the DIP Credit Agreement and listed on Schedule 1.1L.

                  "FACILITIES" means all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) and
related facilities now, hereafter or heretofore owned, leased, operated or used
by Company or any of its Subsidiaries or any of their respective predecessors or
Affiliates.

                  "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.

                  "FINANCIAL PERFORMANCE COVENANTS" means the covenants of
Company set forth in subsections 7.6A and 7.6B.

                  "FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).

                  "FIRST PRIORITY" means, with respect to any Lien purported to
be created on any Collateral pursuant to any Collateral Document, that such Lien
(or any distribution priority thereof) has priority over any other Lien (or
distribution priority) on such Collateral, other than Liens permitted under
subsections 7.2A(i), (iii), (v) and (vi).

                  "FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.

                  "FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on February 28 or February 29, as the case may be, of each
calendar year.

                                       15
<PAGE>

                  "FLOOD HAZARD PROPERTY" means a Closing Date Mortgaged
Property or an Additional Mortgaged Property located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards.

                  "FOREIGN SUBSIDIARY" means (a) any Subsidiary of Company which
is organized under the laws of any jurisdiction outside of the United States of
America or Canada or (b) any Subsidiary whose sole assets consist of either (i)
stock of a Subsidiary, (ii) equity Securities in a Joint Venture or (iii) an
Investment in a Person, in each case that is organized under the laws of any
jurisdiction outside of the United States of America or Canada.

                  "FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at 31 West 52nd Street, New York, New York 10019 or
(ii) such other office of Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by Administrative
Agent to Company and each Lender.

                  "FUNDING DATE" means the date of the funding of a Loan.

                  "GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.

                  "GOVERNMENTAL AUTHORITY" means any domestic or foreign
government including any federal, provincial, state, territorial or municipal
government and any government agency, tribunal, commission or other authority
exercising or purporting to exercise executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, government.

                  "GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state, provincial or local Governmental Authority, agency or court.

                  "HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "infectious waste," "toxic substances" or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar meaning and regulatory effect import under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in any form; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (ix) pesticides; and (x) any other

                                       16
<PAGE>

chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Governmental Authority.

                  "INDEBTEDNESS," as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute Contingent Obligations and not Indebtedness. For the
avoidance of doubt, "INDEBTEDNESS" shall not include (i) obligations in respect
of Operating Leases, including, without limitation, Contingent Obligations in
respect of Operating Leases, or (ii) landlord allowances in connection with
leased properties.

                  "INDEMNIFIED ENVIRONMENTAL LIABILITIES" has the meaning set
forth in subsection 10.3.

                  "INDEMNIFIED LIABILITIES" has the meaning set forth in
subsection 10.3.

                  "INDEMNITEES" has the meaning assigned to that term in
subsection 10.3.

                  "INITIAL PUBLIC OFFERING" means a widely dispersed initial
public offering of Company's common stock made after the Closing Date and
resulting in gross proceeds to Company of at least $75,000,000.

                  "INSOLVENCY EVENT" means, with respect to any Person, the
occurrence of any of the events described in subsection 8.6 or 8.7; provided
that, solely for purposes of this definition, any references to Company or any
of its Subsidiaries in subsection 8.6 or 8.7 shall be deemed to be a reference
to such Person.

                  "INSOLVENCY LAWS" means the Bankruptcy Code, the Bankruptcy
and Insolvency Act, R.S.C. 1992, C.27, the CCAA or any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect in the United
States of America or any state thereof or Canada or any province thereof.

                  "INSURANCE/CONDEMNATION PREPAYMENT AMOUNT" has the meaning set
forth in subsection 2.4B(ii)(b).

                  "INTELLECTUAL PROPERTY" means all patents, trademarks,
designs, tradenames, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Company and its Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.

                                       17
<PAGE>

                  "INTERCOMPANY NOTE" means a promissory note issued by a Wholly
Owned North American Subsidiary of Company to Company or any other Wholly Owned
North American Subsidiary of Company or by Company to a Wholly Owned North
American Subsidiary of Company to evidence intercompany debt in the form of
Exhibit V annexed hereto, as such Intercompany Note may be amended, supplemented
or otherwise modified in accordance with subsection 7.14A.

                  "INTERCREDITOR AGREEMENT" means the Intercreditor Agreement to
be executed and delivered on the Closing Date among Collateral Agent, BTCo, as
Administrative Agent hereunder, BTCo, as US administrative agent under the
Priority Secured Credit Agreement, Deutsche Bank AG, Canada Branch, as CN
administrative agent under the Priority Secured Credit Agreement, and, upon
execution of counterparts to the Intercreditor Agreement by any other Persons
who may become parties to the Intercreditor Agreement in accordance with the
terms thereof, such other Persons, in substantially the form of Exhibit XIII
annexed hereto, as such Intercreditor Agreement may thereafter be amended,
restated, supplemented or modified from time to time.

                  "INTEREST EXPENSE" for any Person means, for any period, the
difference between (i) total interest expense (including that portion
attributable to Capital Leases in accordance with GAAP, capitalized interest and
letter of credit fees and commitment fees payable under the Priority Secured
Credit Agreement) of such Person and its Subsidiaries with respect to all
outstanding Indebtedness of such Person and its Subsidiaries, including, without
limitation, all commissions, discounts, and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Agreements, but excluding, however, in the case of Company,
any fees payable under subsection 2.3 of this Agreement and any fees payable
under subsection 2.3 of the Priority Secured Credit Agreement (other than
commitment fees payable under subsection 2.3A of the Priority Secured Credit
Agreement) and any fees payable in connection with an amendment, waiver or other
modification to this Agreement or the Priority Secured Credit Agreement
(including any non-cash amortization of such fees in accordance with GAAP) and
(ii) total interest income of such Person and its Subsidiaries during such
period.

                  "INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each January 15, April 15, July 15, and October 15 of each year,
commencing on the first such date to occur after the Closing Date and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
longer than three months "Interest Payment Date" shall also include the date
that is three months after the commencement of such Interest Period or an
integral multiple thereof.

                  "INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.

                  "INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.

                  "INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.

                                       18
<PAGE>

                  "INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.

                  "INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a Person
that prior to such purchase or acquisition was a Wholly Owned North American
Subsidiary of Company and a party to the Subsidiary Guaranty and the Security
Agreement), (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any Person other
than Company or any of its Wholly Owned North American Subsidiaries that is a
party to the Subsidiary Guaranty and the Security Agreement, of any equity
Securities of such Subsidiary, or (iii) any direct or indirect loan, advance or
capital contribution by Company or any of its Subsidiaries to any other Person
other than a Wholly Owned North American Subsidiary of Company which is a party
to the Subsidiary Guaranty and the Security Agreement, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.

                  "INVESTMENT EXPENDITURE AMOUNT" has the meaning set forth in
subsection 7.3A(viii).

                  "INVESTMENT/ACQUISITION EXPENDITURE AMOUNT" has the meaning
set forth in subsection 7.3A(viii).

                  "JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, limited liability company,
partnership or other legal form; provided that in no event shall any corporate
or limited liability company Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.

                  "LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real or immovable property, other than any
such leasehold interest designated from time to time by Administrative Agent in
its reasonable discretion as not being required to be included in the
Collateral.

                  "LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on Schedule 2.1 and any Person becoming a Lender pursuant
to subsection 2.1A(ii)(b) together with their successors and permitted assigns
pursuant to subsection 10.1; provided that the term "Lenders," when used in the
context of Restructured Term Loan Commitments, shall mean Lenders having a
Restructured Term Loan Commitment.

                  "LEVERAGE RATIO" means, as of any date of determination, the
ratio of (a) Wholly Owned Total Debt on the last day of the most recently ended
four Fiscal Quarter period to (b) Wholly Owned EBITDA for such four Fiscal
Quarter period.

                  "LIEN" means any lien, mortgage, deed of trust, pledge,
assignment, security interest, charge or encumbrance of any kind (including any
conditional sale or other title

                                       19
<PAGE>

retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.

                  "LOAN" or "LOANS" means one or more of the Restructured Term
Loans and Supplemental Term Loans.

                  "LOAN PARTY" means any of Company or any Subsidiary of Company
executing the Subsidiary Guaranty, and "LOAN PARTIES" means all such Persons,
collectively.

                  "MAINTENANCE CAPITAL EXPENDITURES" means Capital Expenditures
other than New Build Capital Expenditures.

                  "MAJOR ASSET SALE" means any Asset Sale which is not a Minor
Asset Sale.

                  "MAJOR ASSET SALE PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(a)(2).

                  "MANAGEMENT FEES" means fees payable to Sponsors or Affiliates
of Sponsors, subject to the provisions of subsection 7.10, for services in
advising on the management of the business of Company and its Subsidiaries.

                  "MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.

                  "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
on the business, operations, properties, assets, liabilities, condition
(financial or otherwise) or prospects of the Company and its Wholly Owned
Subsidiaries taken as a whole, or (ii) the impairment in any material respect of
the ability of any Loan Party to perform, or of Administrative Agent, Collateral
Agent or Lenders to enforce, the Obligations.

                  "MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Term Loan
Documents and the Priority Secured Loan Documents (as defined in the Priority
Secured Credit Agreement)) which would be required to be filed as an exhibit to
an SEC Report under Item 601(b)(10) of Regulation S-K.

                  "MERGED SUBSIDIARY" and "MERGED SUBSIDIARIES" have the
meanings set forth in subsection 5.21.

                  "MINOR ASSET SALE" means an Asset Sale producing Net Asset
Sale Proceeds of less than $10,000,000.

                  "MINOR ASSET SALE PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(a)(1).

                  "MOODY'S" means Moody's Investors Services, Inc.

                                       20
<PAGE>

                  "MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust, a debenture, a hypothec or a mortgage or by any similar
title) executed and delivered by any Loan Party, substantially in the form of
Exhibit XV-A annexed hereto with respect to Canadian real property and in the
form of Exhibit XV-B annexed hereto with respect to United States real property,
in each case with such changes thereto as may be recommended by Collateral
Agent's local counsel based on local laws or customary local mortgage or deed of
trust practices, or (ii) at Collateral Agent's option, in the case of an
Additional Mortgaged Property, an amendment to an existing Mortgage, in form
reasonably satisfactory to Collateral Agent, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage, in
either case as such security instrument or amendment may be amended, restated,
supplemented or otherwise modified from time to time. "MORTGAGES" means all such
instruments, including the Closing Date Mortgages and any Additional Mortgages,
collectively.

                  "MORTGAGED PROPERTIES" means, collectively, the Closing Date
Mortgaged Properties and the Additional Mortgaged Properties.

                  "MULTIEMPLOYER PLAN" means a "multiemployer plan," as defined
in Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute.

                  "NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received by Company or any of its Subsidiaries from such
Asset Sale, net of any bona fide direct costs incurred in connection with such
Asset Sale, including, without limitation, (i) real property transfer Tax,
recording charges, brokers' fees, investment banking fees and income Taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans and the Priority
Secured Loans) that is secured by a Lien on the equity Securities or assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale.

                  "NET DEBT SECURITIES PROCEEDS" mean Cash proceeds net of
underwriting discounts, fees and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses,
from the issuance of Indebtedness of Company or any of its Subsidiaries after
the Closing Date (other than the proceeds of Indebtedness permitted pursuant to
subsection 7.1).

                  "NET EQUITY SECURITIES PROCEEDS" means Cash proceeds net of
underwriting discounts, fees and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses,
from the issuance of equity securities of Company or any of its Subsidiaries
after the Closing Date (other than the proceeds of Permitted Cure Securities to
the extent Company elects to use such proceeds to increase Wholly Owned EBITDA
pursuant to subsection 7.6C(i)(a)).

                                       21
<PAGE>

                  "NET INCOME" of a Person means, for any period, the net income
(or loss) of such Person and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan or Canadian
Pension Plan.

                  "NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation, expropriation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by Company or
such Subsidiary in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof and, in the case of any such
taking, net of (X) income Taxes reasonably estimated to be actually payable
within two years of the date of such taking as a result of any gain recognized
in connection therewith and (Y) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans and the Priority Secured Loans) that is secured by a Lien on the assets
taken that is required to be repaid under the terms thereof as a result of such
taking.

                  "NET PROCEEDS AMOUNT" has the meaning set forth in subsection
2.4B(ii)(g).

                  "NEW BUILD CAPITAL EXPENDITURES" means Capital Expenditures
for the development and/or construction of theatres to be operated by Company
and its Subsidiaries (other than Capital Expenditures incurred in the ordinary
course of business for the maintenance or refurbishment of theatres).

                  "NON-U.S. LENDER" has the meaning set forth in subsection
2.7B(iii)(a).

                  "NORTH AMERICAN SUBSIDIARY" means any Subsidiary of Company
other than a Foreign Subsidiary or an Off-Balance Sheet Subsidiary.

                  "NOTES" means one or more of the Restructured Term Notes or
the Supplemental Term Notes.

                  "NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.

                  "NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.

                  "OAKTREE" means Oaktree Capital Management, LLC, as general
partner and/or investment manager of certain funds and accounts managed by it.

                                       22
<PAGE>

                  "OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Collateral Agent,
Lenders or any of them under the Term Loan Documents, whether for principal,
interest (including interest accruing on or after the occurrence of an
Insolvency Event), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.

                  "OFF-BALANCE SHEET NEW BUILD CAPITAL EXPENDITURES" means New
Build Capital Expenditures made by an Off-Balance Sheet Subsidiary and financed
by equity contributions and/or Indebtedness (including Capital Leases) not
included on the consolidated balance sheet of Company and its Subsidiaries and
not guaranteed by Company or any of its Subsidiaries.

                  "OFF-BALANCE SHEET SUBSIDIARY" means any Subsidiary of Company
(i) that engages in no activities other than the financing and making of
Off-Balance Sheet New Build Capital Expenditures and operating theatres built
with Off-Balance Sheet New Build Capital Expenditures and (ii) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which is
guaranteed by Company or any other Subsidiary of Company, is recourse to or in
any way obligates Company or any other Subsidiary of Company, or subjects any
property or asset of Company or any other Subsidiary of Company to the
satisfaction thereof.

                  "OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer, its treasurer or controller; provided that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with; and provided
further that with respect to any certificate required to be delivered pursuant
to subsection 4.1, such certificate may be executed by any one such officer
approved by Administrative Agent.

                  "ONEX" means Onex Corporation, an Ontario corporation.

                  "OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal, immovable, movable or mixed)
that is not a Capital Lease other than any such lease under which that Person is
the lessor.

                  "PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).

                  "PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

                                       23
<PAGE>

                  "PERMITTED ACQUISITION" means an acquisition (whether pursuant
to an acquisition of stock, assets or otherwise) by Company or any of its Wholly
Owned North American Subsidiaries from any Person of a business or an interest
in a business in which all of the following requirements are satisfied:

                  (i)  such business is permitted by subsection 7.12;

                  (ii) immediately after giving effect to such acquisition no
         Potential Event of Default or Event of Default shall have occurred and
         be continuing or would result therefrom;

                  (iii) Company can demonstrate in form and substance
         satisfactory to Administrative Agent immediately after giving effect to
         such acquisition that Company is in compliance on a Pro Forma Basis
         with the covenants set forth in Section 7 of this Agreement; and

                  (iv) immediately after giving effect to such acquisition, such
         business or interest in a business (a) is 100% owned by Company or one
         of its Wholly Owned North American Subsidiaries and (b) does not
         include an Investment in a Joint Venture or a non-Wholly Owned
         Subsidiary.

                  "PERMITTED CURE SECURITIES" means (i) an equity security of
Company (a) having no mandatory redemption, repurchase, retirement, sinking fund
or similar requirements prior to August 31, 2008, (b) upon which all dividends,
at the election of Company, may be payable in additional shares of that equity
security and (c) the terms and conditions of which are otherwise satisfactory to
Administrative Agent or (ii) Subordinated Indebtedness of Company which shall
(a) have no mandatory redemption, principal payment, retirement, sinking fund or
similar requirement prior to August 31, 2008, (b) permit, at the election of
Company, the payment of interest by the issuance of additional amounts of that
debt security, (c) be subordinated in right of payment to all other Indebtedness
of Company and its Subsidiaries that is designated as senior to such
Subordinated Indebtedness and (d) contain terms and conditions otherwise
satisfactory to Administrative Agent.

                  "PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):

                  (i) Liens for taxes, assessments or governmental charges or
         claims the payment of which is not, at the time, required by subsection
         6.3;

                  (ii) statutory Liens of landlords, statutory Liens of banks
         and rights of set off, statutory Liens of carriers, warehousemen,
         mechanics and materialmen, and other Liens imposed by law, in each case
         incurred in the ordinary course of business for sums not yet delinquent
         or being contested in good faith by appropriate proceedings, if (1)
         such reserve or other appropriate provision, if any, as shall be
         required by GAAP shall have been made therefor and (2) in the case of a
         Lien with respect to any portion of the Collateral, such contest
         proceedings conclusively operate to stay the sale of any material
         portion of the Collateral on account of such Lien;

                                       24
<PAGE>

                  (iii) Liens incurred or deposits made in the ordinary course
         of business in connection with workers' compensation, unemployment
         insurance, employment insurance and other types of social security, or
         to secure the performance of tenders, statutory obligations, surety and
         appeal bonds, bids, leases, government contracts, trade contracts,
         performance and return-of-money bonds and other similar obligations
         (exclusive of obligations for the payment of borrowed money), so long
         as no foreclosure, sale or similar proceedings have been commenced with
         respect to any material portion of the Collateral on account thereof;

                  (iv) any attachment or judgment Lien not constituting an Event
         of Default under subsection 8.8;

                  (v) leases or subleases granted to others not interfering in
         any material respect with the ordinary conduct of the business of
         Company or any of its Subsidiaries;

                  (vi) easements, rights-of-way, restrictions, encroachments,
         minor defects or irregularities in title, and other similar charges or
         encumbrances not interfering in any material respect with the ordinary
         conduct of the business of Company or any of its Subsidiaries;

                  (vii) any (a) interest or title of a lessor or sublessor under
         any lease permitted under this Agreement, (b) restriction or
         encumbrance that the interest or title of such lessor or sublessor may
         be subject to, or (c) subordination of the interest of the lessee or
         sublessee under such lease to any restriction or encumbrance referred
         to in the preceding clause (b);

                  (viii) Liens arising from filing UCC or other applicable
         personal property financing statements relating solely to leases
         permitted by this Agreement;

                  (ix) Liens in favor of customs and revenue authorities arising
         as a matter of law to secure payment of customs duties in connection
         with the importation of goods; and

                  (x) licenses of patents, trademarks and other intellectual
         property rights granted by Company or any of its Subsidiaries in the
         ordinary course of business and not interfering in any material respect
         with the ordinary conduct of the business of Company or such
         Subsidiary.

                  "PERMITTED INVESTMENT" means a direct Investment by Company or
a Wholly Owned North American Subsidiary of Company in a Joint Venture,
non-Wholly Owned Subsidiary or Off-Balance Sheet Subsidiary, in each case which
is principally engaged in a business that Company and its Subsidiaries are
permitted to engage in under subsection 7.12. The value of any Permitted
Investment made by Company or a Wholly Owned North American Subsidiary of
Company with an asset other than cash shall be equal to the fair market value of
such asset at the time such Permitted Investment is made, as determined in good
faith by the Board of Directors of Company or such Wholly Owned North American
Subsidiary, as the case may be.

                                       25
<PAGE>

                  "PERMITTED SUPPLEMENTAL TERM LOAN ACQUISITION" means a
Permitted Acquisition financed with Supplemental Term Loans in which both of the
following are satisfied:

                  (i) the Permitted Acquisition has been approved by Requisite
Lenders; and

                  (ii) the Applicable Leverage Ratio as of the date of such
Permitted Supplemental Term Loan Acquisition, determined on a Supplemental Term
Loan Pro Forma Basis as of such date, is decreased.

                  "PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.

                  "PLAN OF REORGANIZATION" means the First Amended Chapter 11
Plan of Company and Subsidiary Debtors under Chapter 11 of the Bankruptcy Code
dated January 14, 2002.

                  "POST-DEFAULT ADVANCES SUBLIMIT" has the meaning assigned that
term in the DIP Credit Agreement.

                  "POST-CLOSING LETTER" means that certain post-closing letter
agreement of even date herewith among Company, Cineplex Odeon, Administrative
Agent, US Administrative Agent (as defined in the Priority Secured Credit
Agreement) and CN Administrative Agent (as defined in the Priority Secured
Credit Agreement).

                  "POST-PETITION INCREMENTAL US SUBLIMIT" has the meaning
assigned to that term in the DIP Credit Agreement.

                  "POST-PETITION INCREMENTAL CANADIAN SUBLIMIT" has the meaning
assigned to that term in the DIP Credit Agreement.

                  "POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.

                  "PPSA" means the Personal Property Security Act (Ontario) and
any regulations thereunder or any similar personal property security legislation
in any other Canadian jurisdiction, as amended from time to time.

                  "PRE-PETITION CREDIT AGREEMENT" means that certain Credit
Agreement dated as of May 14, 1998, as amended, among Company, the Pre-Petition
Lenders, BTCo, as administrative agent and as co-syndication agent, Bank of
America, N.A., as a co-syndication agent, The Bank of New York, as a
co-syndication agent, and Credit Suisse First Boston, as a co-syndication agent.

                                       26
<PAGE>

                  "PRE-PETITION LENDERS" means the parties identified as lenders
and indemnifying lenders under the Pre-Petition Credit Agreement in their
capacities as lenders under the Pre-Petition Credit Agreement, together with
their successors and assigns.

                  "PRIME RATE" means the rate of interest per annum publicly
announced from time to time by BTCo as its prime commercial lending rate in
effect at its principal office in New York City. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.

                  "PRIORITY SECURED ADMINISTRATIVE AGENT" has the meaning
assigned to "Administrative Agent" in the Priority Secured Credit Agreement.

                  "PRIORITY SECURED CREDIT AGREEMENT" means that certain
Priority Secured Credit Agreement dated as of March 21, 2002 among Company, the
Priority Secured Lenders, BTCo, as US administrative agent, Deutsche Bank AG,
Canada Branch, as CN administrative agent, General Electric Capital Corporation,
as syndication agent and Deutsche Banc Alex. Brown Inc., as sole and exclusive
arranger, as such Priority Secured Credit Agreement may be amended, restated,
supplemented or otherwise modified from time to time.

                  "PRIORITY SECURED CREDIT AGREEMENT OBLIGATIONS" has the
meaning assigned to the term "Obligations" in the Priority Secured Credit
Agreement.

                  "PRIORITY SECURED LENDERS" means the parties identified as
lenders and indemnifying lenders under the Priority Secured Credit Agreement in
their capacities as lenders under the Priority Secured Credit Agreement.

                  "PRIORITY SECURED LOANS" has the meaning assigned to the term
"Loans" in the Priority Secured Credit Agreement.

                  "PRIORITY SECURED REVOLVING LOAN COMMITMENTS" has the meaning
assigned to the term "Revolving Loan Commitment" in the Priority Secured Credit
Agreement.

                  "PRIORITY SECURED REVOLVING LOANS" has the meaning assigned to
the term "Revolving Loans" in the Priority Secured Credit Agreement.

                  "PRIORITY SECURED TERM LOANS" has the meaning assigned to the
term "Term Loans" in the Priority Secured Credit Agreement.

                  "PRIVATE EQUITY PREPAYMENT AMOUNT" has the meaning set forth
in subsection 2.4B(ii)(d)(2)(A).

                  "PRIVATE NON-SPONSOR EQUITY OFFERING" means any offering of
equity securities of Company or any of its Subsidiaries not registered under the
Securities Act (except offerings made in reliance on Rule 144A thereunder and
subject to exchange rights for registered securities) and placed entirely with
Persons other than the Sponsors and their respective Sponsor Affiliates.

                                       27
<PAGE>

                  "PRIVATE SPONSOR EQUITY OFFERING" means any offering of equity
securities of Company or any of its Subsidiaries not registered under the
Securities Act and placed entirely with the Sponsors or their respective Sponsor
Affiliates.

                  "PRO FORMA BASIS" means, as of any date of determination, the
compliance of Company with the Financial Performance Covenants as of the last
day of the four Fiscal Quarter period most recently ended prior to such date of
determination for which the relevant financial information is available (the
"COMPLIANCE PERIOD"), after giving effect on a pro forma basis to any Permitted
Acquisitions with a purchase price in excess of $5,000,000 individually or in
the aggregate made during such Compliance Period and any dispositions or theatre
closings with EBITDA during the four Fiscal Quarters immediately preceding the
date of such disposition or theatre closing in excess of $2,000,000 individually
or $5,000,000 in the aggregate made during such Compliance Period, other than
sales of inventory in the ordinary course of business and dispositions of
obsolete equipment during such Compliance Period, on the following basis:

                  (i) any Indebtedness incurred or assumed by Company or any of
         its Wholly Owned Subsidiaries in connection with such Permitted
         Acquisitions and any Indebtedness of Company or any of its Wholly Owned
         Subsidiaries repaid in connection with such Permitted Acquisitions,
         dispositions or theatre closings shall be deemed to have been incurred
         or repaid, respectively, as of the first day of the Compliance Period;

                  (ii) if such Indebtedness incurred or assumed by Company or
         any of its Wholly Owned Subsidiaries in connection with such Permitted
         Acquisitions has a floating or formula rate, then the rate of interest
         for such Indebtedness for the applicable period shall be computed as if
         the rate in effect for such Indebtedness on the relevant measurement
         date had been the applicable rate for the entire applicable period;

                  (iii) income statement items (whether positive or negative)
         attributable to the property or business acquired, disposed of or
         closed in such Permitted Acquisitions, dispositions or theatre closings
         shall be included as if such acquisitions, dispositions or theatre
         closings took place on the first day of such Compliance Period on a pro
         forma basis; and

                  (iv) any historical, extraordinary, non-recurring costs or
         expenses or other verifiable costs or expenses that will not continue
         after the acquisition, disposition or closing date may be eliminated
         and other expenses and cost reductions may be reflected on a basis
         consistent with Regulation S-X promulgated by the Securities and
         Exchange Commission;

provided that all pro forma adjustments shall be subject to the reasonable
approval of the Administrative Agent.

                  "PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Restructured Term Loans of any
Lender, the percentage obtained by dividing (x) the Restructured Term Loans of
that Lender by (y) the aggregate Restructured Term Loans of all Lenders (or, in
the case of matters prior to the Closing Date, substituting and utilizing the
Restructured Term Loan Commitments of the Lenders), (ii) with respect to all

                                       28
<PAGE>

payments, computations and other matters relating to the Supplemental Term Loans
of any Lender, the percentage obtained by dividing (x) the Supplemental Term
Loans of that Lender by (y) the aggregate Supplemental Term Loans of all Lenders
and (iii) for all other purposes with respect to each Lender, the percentage
obtained by dividing (x) the sum of the Restructured Term Loans of that Lender
plus the Supplemental Term Loans of that Lender by (y) the sum of the aggregate
Restructured Term Loans of all Lenders plus the aggregate Supplemental Term
Loans of all Lenders. The initial Pro Rata Share of each Lender for purposes of
clause (i) of the preceding sentence is set forth opposite the name of that
Lender in Schedule 2.1 annexed hereto; provided that Schedule 2.1 shall be
amended and each Lender's Pro Rata Share for purposes of each of clauses (i),
(ii) and (iii) of the preceding sentence shall be adjusted from time to time to
give effect to Supplemental Term Loans made pursuant to subsection 2.1A(ii) and
any assignments pursuant to subsection 10.1B.

                  "PROCEEDINGS" has the meaning assigned to that term in
subsection 6.1(x).

                  "PROSPECTIVE LENDER" has the meaning set forth in subsection
2.1A(ii)(b).

                  "PUBLIC EQUITY OFFERINGS" means an Initial Public Offering and
any other offering of equity securities of Company or any of its Subsidiaries
registered under the Securities Act (except offerings on Form S-8).

                  "PUBLIC EQUITY PREPAYMENT AMOUNT" has the meaning assigned in
subsection 2.4B(ii)(d)(1).

                  "PURCHASE MONEY MORTGAGE" has the meaning assigned to that
term in subsection 7.2A(iii).

                  "PURCHASE MONEY SECURITY INTEREST" has the meaning assigned to
that term in subsection 7.2A(iii).

                  "REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by Company or any Subsidiary Guarantor in any real property.

                  "RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Collateral Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease or notice thereof evidencing such Leasehold Property or
a memorandum thereof, executed and acknowledged by the owner of the affected
real property, as lessor, or (b) if such Leasehold Property was acquired or
subleased from the holder of a Recorded Leasehold Interest, the applicable
assignment or sublease document, executed and acknowledged by such holder, or
notice thereof, in each case in form sufficient to give such constructive notice
upon recordation and otherwise in form reasonably satisfactory to Collateral
Agent.

                  "REGISTER" has the meaning assigned to that term in subsection
2.1D(i).

                                       29
<PAGE>

                  "REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

                  "RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.

                  "REPLACEMENT LENDER" has the meaning set forth in subsection
10.1B(iii).

                  "REQUIRED PREPAYMENT DATE" has the meaning set forth in
subsection 2.4B(iii)(f).

                  "REQUISITE CLASS LENDERS" means, at any time of determination,
(i) for Lenders holding Restructured Term Loans, Lenders holding more than 50%
of the aggregate outstanding principal amount of Restructured Term Loans of all
Lenders; and (ii) for Lenders holding Supplemental Term Loans, Lenders holding
more than 50% of the aggregate outstanding principal amount of Supplemental Term
Loans of all Lenders (all of which constitute a single Class); provided that, so
long as Sponsors or Sponsor Affiliates own or manage at least 35% of Company's
total voting securities, all Restructured Term Loans and Supplemental Term Loans
owned or managed by the Sponsors and Sponsor Affiliates shall be disregarded for
purposes of determining Requisite Class Lenders except for any amendment,
waiver, consent, supplement or other modification to this Agreement that would
relatively diminish payment rights of the Sponsors or Sponsor Affiliates or the
Loans owned by them from other Lenders holding the same Class of Loans.

                  "REQUISITE LENDERS" means Lenders having or holding a majority
of the sum of the aggregate Restructured Term Loans of all Lenders plus the
aggregate Supplemental Term Loans of all Lenders.

                  "RESPONSIBLE OFFICER" means the chief executive officer,
president, vice president, chief financial officer, principal accounting officer
or treasurer of Company or any of its Subsidiaries.

                  "RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.

                                       30
<PAGE>

                  "RESTRUCTURED TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Restructured Term Loan to Company pursuant to subsection
2.1A(i) and "RESTRUCTURED TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.

                  "RESTRUCTURED TERM LOANS" means the term loans to be made by
the Lenders to Company on the Closing Date pursuant to subsection 2.1A(i).

                  "RESTRUCTURED TERM NOTES" means one or more of the promissory
notes of Company issued pursuant to subsection 2.1E(i) on the Closing Date and
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of Restructured Term Loans of
any Lenders, in each case substantially in the form of Exhibit III-A annexed
hereto, as they may be amended, supplemented or otherwise modified from time to
time.

                  "RETAINED PROCEEDS AVAILABLE FOR CAPEX" means, for any Fiscal
Year of Company, the sum of (x) the amount of Net Asset Sale Proceeds realized
subsequent to the Closing Date in respect of all Minor Asset Sales (other than
Deemed Major Asset Sale Proceeds), Net Equity Securities Proceeds from Public
Equity Offerings and Net Equity Securities Proceeds from Private Non-Sponsor
Equity Offerings received during such Fiscal Year or retained during the
immediately preceding Fiscal Year and not required to be applied as mandatory
prepayments of Loans pursuant to subsections 2.4B(ii)(a)(1), 2.4B(ii)(d)(1) and
2.4B(ii)(d)(2), respectively, (y) the amount of Net Equity Securities Proceeds
from Private Sponsor Equity Offerings during such Fiscal Year plus (z) the
amount of Excess Cash Flow for the immediately preceding Fiscal Year not
required to be applied as a mandatory prepayment of the Loans pursuant to
subsection 2.4B(ii)(e); provided that Net Asset Sale Proceeds from Asset Sales
of the assets listed on Schedule 1.1C shall not be included in Retained Proceeds
Available for CapEx to the extent such Net Asset Sale Proceeds do not exceed the
West 34th Street Loan Amount.

                  "S&P" means Standard & Poor's Ratings Services.

                  "SCHEDULED 2003 NEW BUILD CAPITAL EXPENDITURES" means New
Build Capital Expenditures during the Fiscal Year ending February 28, 2003
relating to the new theatres listed on, and in amounts not exceeding the amounts
set forth on, Schedule 7.13B.

                  "SEC" means the Securities and Exchange Commission.

                  "SEC REPORT" means any annual, quarterly and current report
filed by the Company with the SEC under Section 13(a) of the Exchange Act and
proxy statements mailed by Company to its shareholders.

                  "SECOND PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
(or any distribution priority relating to such Lien) has priority over any other
Liens (or distribution priority) on such Collateral, other than Liens permitted
under subsections 7.2A(i), (iii), (v), (vi) and (ix).

                                       31
<PAGE>

                  "SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.

                  "SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Company and the Subsidiary Guarantors on the Closing Date,
substantially in the form of Exhibit XI annexed hereto, as such Security
Agreement may be amended, restated, supplemented or otherwise modified from time
to time.

                  "SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule
1-02(w) of Regulation S-X under the Exchange Act, substituting 5 percent
whenever 10 percent appears in such Rule.

                  "SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

                  "SPECIFIED PRIORITY SECURED LOAN DEFAULT" has the meaning
assigned to the term "First Lien Debt Default" in the Intercreditor Agreement.

                  "SPONSOR AFFILIATES" means Affiliates of the Sponsors and any
Person that would be an Affiliated Fund of the Sponsors if they were Lenders.

                  "SPONSOR CONVERSION AMOUNT" has the meaning set forth in the
Recitals.

                  "SPONSORS" means Onex and Oaktree.

                  "SUBORDINATED INDEBTEDNESS" means Indebtedness of Company
(other than Indebtedness to any of its Subsidiaries) that is subordinated in
right of payment to the Obligations pursuant to documentation containing
maturities, amortization schedules, covenants,

                                       32
<PAGE>

defaults, remedies, subordination provisions and other material terms in form
and substance satisfactory to Administrative Agent.

                  "SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.

                  "SUBSIDIARY DEBTORS" means the Subsidiaries of Company that
are the subject of the Chapter 11 Cases.

                  "SUBSIDIARY GUARANTOR" means, at any time, any of Company's
Wholly Owned North American Subsidiaries that are then a party to the Subsidiary
Guaranty.

                  "SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by Company's Wholly Owned North American Subsidiaries on the
Closing Date and to be executed and delivered by Company's Wholly Owned North
American Subsidiaries from time to time thereafter in accordance with subsection
6.9, substantially in the form of Exhibit XII annexed hereto, as such Subsidiary
Guaranty may be amended, supplemented or otherwise modified from time to time.

                  "SUPPLEMENTAL TERM LOAN PRO FORMA BASIS" means, as of any date
of determination, the compliance of Company with the Financial Performance
Covenants as of the last day of the four Fiscal Quarter period most recently
ended prior to such date of determination for which the relevant financial
information is available (the "SUPPLEMENTAL TERM LOAN COMPLIANCE PERIOD"), after
giving effect on a pro forma basis to any Permitted Supplemental Term Loan
Acquisitions made during such Supplemental Term Loan Compliance Period on the
following basis:

                  (i) any Supplemental Term Loans incurred by Company or any of
         its Wholly Owned Subsidiaries in connection with such Permitted
         Supplemental Term Loan Acquisitions shall be deemed to have been
         incurred as of the first day of the Supplemental Term Loan Compliance
         Period;

                  (ii) if such Supplemental Term Loans incurred by Company or
         any of its Wholly Owned Subsidiaries in connection with such Permitted
         Supplemental Term Loan Acquisitions has a floating or formula rate,
         then the rate of interest for such Supplemental Term Loans for the
         applicable period shall be computed as if the rate in effect for such
         Supplemental Term Loans on the relevant measurement date had been the
         applicable rate for the entire applicable period;

                  (iii) income statement items (whether positive or negative)
         attributable to the property or business acquired in such Permitted
         Supplemental Term Loan Acquisitions shall be included as if such
         Permitted Supplemental Term Loan Acquisitions took place

                                       33
<PAGE>

         on the first day of such Supplemental Term Loan Compliance Period on a
         pro forma basis; and

                  (iv) any historical, extraordinary, non-recurring costs or
         expenses or other verifiable costs or expenses that will not continue
         after the acquisition date may be eliminated and other expenses and
         cost reductions may be reflected on a basis consistent with Regulation
         S-X promulgated by the Securities and Exchange Commission;

provided that all pro forma adjustments shall be subject to the reasonable
approval by the Administrative Agent.

                  "SUPPLEMENTAL TERM LOAN PRO FORMA LEVERAGE RATIO" means, as of
any date of determination, the Applicable Leverage Ratio in effect as of such
date of determination, determined on a Supplemental Term Loan Pro Forma Basis.

                  "SUPPLEMENTAL TERM LOANS" means term loans made pursuant to
subsection 2.1A(ii).

                  "SUPPLEMENTAL TERM LOANS AVAILABILITY EXPIRATION DATE" means
September 21, 2003.

                  "SUPPLEMENTAL TERM NOTES" means one or more of the promissory
notes of Company issued pursuant to subsection 2.1E(ii) on the dates of the
making of Supplemental Term Loans and any promissory notes issued by Company
pursuant to the last sentence of subsection 10.1(B)(i) in connection with
assignments of Supplemental Term Loans of any Lenders, in each case
substantially in the form of Exhibit III-B annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.

                  "TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, including interest, penalties, additions to tax and similar liabilities
with respect thereto, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed.

                  "TERM LOAN DOCUMENTS" means this Agreement, the Notes, the
Subsidiary Guaranty, the Intercreditor Agreement, the Post-Closing Letter and
the Collateral Documents.

                  "THIRD PRIORITY" means, with respect to any Lien purported to
be created on any Collateral, that such Lien (or any distribution priority
thereof) has priority over any other Liens (or distribution priority) on such
Collateral, other than Liens permitted under subsection 7.2A(i), (iii), (v),
(vi) and (ix) and Second Priority Liens.

                  "U.S. DOLLARS" and the sign "$" mean the lawful money of the
United States of America.

                  "WAIVABLE PREPAYMENT" has the meaning set forth in subsection
2.4B(iii)(f).

                  "WEST 34TH STREET LOAN AGREEMENT" has the meaning assigned to
that term in the DIP Credit Agreement.

                                       34
<PAGE>

                  "WEST 34TH STREET LOAN AMOUNT" means the amount of
Indebtedness outstanding under the West 34th Street Loan Agreement and West 34th
Street Note at 11:59 p.m. on the day immediately preceding the Closing Date.

                  "WEST 34TH STREET NOTE" has the meaning assigned to that term
in the DIP Credit Agreement.

                  "WEST 34TH STREET PROJECT" has the meaning assigned to that
term in the DIP Credit Agreement.

                  "WHOLLY OWNED" means, with respect to any Subsidiary of any
Person, that all of the capital stock or other equity interests, as the case may
be, in such Subsidiary (other than directors' or nominees' qualifying shares to
the extent such qualifying shares are required by applicable law) are owned
directly or indirectly by such Person.

                  "WHOLLY OWNED EBITDA" means, for any period, the sum of the
amounts for such period of EBITDA of Company and its Subsidiaries (other than
Off-Balance Sheet Subsidiaries); provided that there shall be excluded (i)
EBITDA and/or the income (or loss) of any Person in which any other Person
(other than Company or any of its Wholly Owned Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Wholly Owned Subsidiaries by such Person
during such period, (ii) EBITDA and/or the income (or loss) of any Person
accrued prior to the date it becomes a Wholly Owned Subsidiary of Company or is
merged into or consolidated with Company or any of its Wholly Owned Subsidiaries
or that Person's assets are acquired by Company or any of its Wholly Owned
Subsidiaries, and (iii) EBITDA and/or the income of any Subsidiary of Company to
the extent that the declaration or payment of dividends or similar distributions
by that Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary.

                  "WHOLLY OWNED EBITDAR" means, for any period, the sum of the
amounts for such period of (a) Wholly Owned EBITDA plus (b) Wholly Owned Rent
Expense.

                  "WHOLLY OWNED RENT EXPENSE" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries on
a consolidated basis (and not included in Interest Expense) during that period
under all Capital Leases and Operating Leases to which Company or any of its
Subsidiaries is a party as lessee excluding, however, an amount equal to the
amount of all rents paid or payable by any non-Wholly Owned Subsidiary of
Company or any Off-Balance Sheet Subsidiaries (to the extent otherwise included
in the aggregate amount of all rents paid or payable by Company and its
Subsidiaries) but including, however, an amount equal to the aggregate maximum
liability of Company and its Wholly Owned Subsidiaries (other than Off-Balance
Sheet Subsidiaries) for such period in respect of Contingent Obligations of
Company or such Wholly Owned Subsidiary in respect of rent paid under Operating
Leases of any non-Wholly Owned Subsidiary of Company or any Joint Venture of
Company or any of its Subsidiaries or any Off-Balance Sheet Subsidiary (other
than Contingent Obligations of Company existing on the Closing Date in respect
of rent paid under the Operating Leases set forth on Schedule 1.1W). For the
avoidance of doubt, amortization of

                                       35
<PAGE>

landlord allowances received by Company and its Wholly Owned Subsidiaries in
connection with leased properties shall not be counted as reductions of Wholly
Owned Rent Expense to the extent such landlord allowances are counted as
reductions of Capital Expenditures.

                  "WHOLLY OWNED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Wholly Owned Subsidiaries (other than Off-Balance Sheet
Subsidiaries) less cash of Company and its Wholly Owned Subsidiaries (other than
Off-Balance Sheet Subsidiaries), all as determined on a consolidated basis in
accordance with GAAP, plus the aggregate maximum liability of Company and its
Wholly Owned Subsidiaries (other than Off-Balance Sheet Subsidiaries) in respect
of Contingent Obligations in respect of any Indebtedness of any Joint Venture of
Company or any of its Subsidiaries or any non-Wholly Owned Subsidiary of Company
or any of its Subsidiaries (other than Contingent Obligations of Company
existing on the Closing Date in respect of the Indebtedness set forth on
Schedule 1.1WH) or any Off-Balance Sheet Subsidiary.

                  "WHOLLY OWNED TOTAL DEBT INTEREST EXPENSE" means, for any
period, total Interest Expense of Company and its Subsidiaries with respect to
Wholly Owned Total Debt.

                  1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.

                  Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
Whenever this Agreement refers to the calculation of amounts in a currency other
than U.S. Dollars, the maintenance of any Indebtedness, Lien, Contingent
Obligation or Investment in such currency shall be permitted, regardless of
subsequent fluctuations in exchange rates, if such Indebtedness, Lien,
Contingent Obligation or Investment was permitted under this Agreement at the
date on which it was incurred.

                  1.3 OTHER DEFINITIONAL PROVISIONS.

                  References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference. An Event of Default shall "continue" or be "continuing" until
such Event of Default has been waived in accordance with subsection 10.6 hereof
or cured as provided herein.

                                       36
<PAGE>

SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

                  2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.

                  A. Commitments and Loans.

                     (i) Restructured Term Loans. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, each Lender having a Restructured Term
Loan Commitment hereby severally agrees, subject to the limitations set forth
below, to lend to Company on the Closing Date an amount equal to its Pro Rata
Share of the aggregate amount of the Restructured Term Loan Commitments then in
effect to be used for the purposes identified in subsection 2.5A. The original
amount of each Lender's Restructured Term Loan Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto, and the aggregate original amount of
the Restructured Term Loan Commitments is $429,932,498.68. Each Lender's
Restructured Term Loan Commitment shall expire on March 31, 2002 if the
Restructured Term Loans are not made on or before that date. Company may make
only one borrowing under the Restructured Term Loan Commitments. Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or prepaid may
not be reborrowed.

                     (ii) Supplemental Term Loans.

                           (a) Supplemental Term Loans. Prior to the
                  Supplemental Term Loan Availability Expiration Date and upon
                  not more than two occasions, subject to the requirements of
                  this subsection 2.1A(ii) and the other terms and conditions of
                  this Agreement and in reliance upon the representations and
                  warranties of Company herein set forth, Company may propose to
                  incur Supplemental Term Loans in accordance with clause (b) of
                  this subsection 2.1A(ii) to be used solely for the purposes
                  identified in subsection 2.5B. The aggregate amount of
                  Supplemental Term Loans shall not exceed (1) if the
                  Supplemental Term Loan Pro Forma Leverage Ratio at the date of
                  incurrence equals or exceeds 3.50:1.00, $125,000,000 or (2) if
                  the Supplemental Term Loan Pro Forma Leverage Ratio at the
                  date of incurrence is less than 3.50:1.00, $250,000,000.
                  Supplemental Term Loans must either (A) (y) bear interest
                  determined solely by reference to the Base Rate plus the
                  Applicable Base Rate Margin or the Adjusted Eurodollar Rate
                  plus the Applicable Eurodollar Rate Margin and (z) have
                  scheduled principal payments precisely proportionate to the
                  then remaining unpaid installments of principal of the
                  Restructured Term Loans set forth in subsection 2.4A(i) or (B)
                  (y) bear interest at floating rates not in excess of the sum
                  of the Adjusted Eurodollar Rate then in effect plus the
                  Applicable Eurodollar Rate Margin for Restructured Term Loans
                  plus 2.00% per annum or at a fixed rate not in excess of the
                  sum of the Adjusted Eurodollar Rate then in effect plus the
                  Applicable Eurodollar Rate Margin for Restructured Term Loans
                  plus 2% per annum and (z) have a weighted average life to
                  maturity of all scheduled principal installments of such
                  Supplemental Term Loans longer than the then weighted average
                  life to maturity of the then remaining unpaid installments of
                  principal of the Restructured Term Loans. Except as set forth
                  in the preceding sentence and as expressly set forth elsewhere
                  in this Agreement, the Supplemental Term Loans will be deemed
                  to be an additional tranche of Term Loans with terms identical
                  to the

                                       37
<PAGE>

                  Restructured Term Loans. Supplemental Term Loans may only be
                  incurred (x) with the written consent of Administrative Agent
                  and Requisite Lenders, (y) solely in connection with a
                  Permitted Supplemental Term Loan Acquisition and (z) if at the
                  time of such incurrence no Event of Default or Potential Event
                  of Default shall have occurred and be continuing or shall be
                  caused thereby. Amounts borrowed under this subsection
                  2.1A(ii) and subsequently repaid or prepaid may not be
                  reborrowed.

                           (b) Procedure for Requesting Supplemental Term Loans.
                  If Company desires to incur Supplemental Term Loans, Company
                  may request any one or more Lenders, selected by Company in
                  its sole discretion, to make Supplemental Term Loans up to a
                  stated maximum aggregate principal amount and at proposed
                  interest rates, fees and amortization schedule for the
                  Supplemental Term Loan set forth in such request (provided
                  that such terms shall be in accordance with subsection
                  2.1A(ii)(a) and provided further that Company shall,
                  concurrently with such request, notify Administrative Agent,
                  and Administrative Agent shall thereafter notify all Lenders,
                  of such request). Any Lender requested by Company to do so may
                  (but is not obligated to) make Supplemental Term Loans. If
                  Lenders (including Lenders not initially selected by Company)
                  are not willing to provide all of the Supplemental Term Loans
                  requested on the proposed terms, with the written consent of
                  Administrative Agent (such consent not to be unreasonably
                  withheld), Company may request one or more Persons meeting the
                  requirements of the definition of "Eligible Assignee" (each a
                  "PROSPECTIVE LENDER"), by execution of a Supplemental Term
                  Loan Acceptance substantially in the form of Exhibit XIV
                  hereunder, to become a Lender hereunder and make Supplemental
                  Term Loans. If one or more Lenders or Prospective Lenders
                  agree to make Supplemental Term Loans, (a) Company shall give
                  written notice to Administrative Agent specifying the
                  aggregate amount of the Supplemental Term Loans to be made,
                  the amount of Supplemental Term Loans to be made by each
                  Lender or Prospective Lender, the proposed Funding Date of
                  such Supplemental Term Loans and the interest rates, fees
                  payable and amortization schedule of the Supplemental Term
                  Loans. Company and Administrative Agent shall agree in writing
                  on all conditions (other than those specified in subsections
                  4.2 and 4.3) to the making of such Supplemental Term Loans.
                  Upon the making of the Supplemental Term Loans, subsection
                  2.4A(ii) shall be deemed amended to provide for the amount and
                  date of the scheduled payments of principal thereon and
                  subsection 2.2A(ii) shall be deemed amended to specify the
                  interest rate or rates applicable to the Supplemental Term
                  Loans, each Lender making Supplemental Term Loans shall
                  receive a Supplemental Term Note pursuant to subsection
                  2.1E(ii), with appropriate insertions, to evidence the
                  Supplemental Term Loan made by it, and Company shall make
                  payment to Administrative Agent (for distribution to each
                  Lender making Supplemental Term Loans) the fees payable for
                  such Loans.

                     B. Borrowing Mechanics. Loans made on any Funding Date as
               Base Rate Loans shall not be subject to any minimum amounts.
               Loans made on any Funding Date as Eurodollar Rate Loans shall be
               in an aggregate minimum amount of $1,000,000 and, in the case of
               Supplemental Term Loans, in integral multiples of $500,000 in
               excess of that amount. Whenever Company desires that Lenders make
               Loans, it shall deliver to Administrative Agent a Notice of
               Borrowing no later than 11:00 A.M. (New York time) at least three
               Business Days in advance of the proposed Funding Date (in the
               case of a Eurodollar Rate Loan), or at least one

                                       38
<PAGE>

         Business Day in advance of the proposed Funding Date (in the case of a
         Base Rate Loan). The Notice of Borrowing shall specify (i) the proposed
         Funding Date (which shall be a Business Day), (ii) the amount and type
         of Loans requested, (iii) in the case of Loans made on the Closing
         Date, that such Loans shall be Base Rate Loans, (iv) in the case of
         Loans not made on the Closing Date, whether such Loans shall be Base
         Rate Loans or Eurodollar Rate Loans, (v) in the case of any Loans
         requested to be made as Eurodollar Rate Loans, the initial Interest
         Period requested therefor. In lieu of delivering a Notice of Borrowing,
         Company may give Administrative Agent telephonic notice by the required
         time of any proposed borrowing under this subsection 2.1B; provided
         that such notice shall be promptly confirmed in writing by delivery of
         a Notice of Borrowing to Administrative Agent on or before the
         applicable Funding Date.

                  Neither Administrative Agent nor any Lender shall incur any
         liability to Company in acting upon any telephonic notice referred to
         above that Administrative Agent believes in good faith to have been
         given by a duly authorized officer or other person authorized to borrow
         on behalf of Company or for otherwise acting in good faith under this
         subsection 2.1B, and upon funding of Loans by Lenders in accordance
         with this Agreement pursuant to any such telephonic notice Company
         shall have effected Loans hereunder.

                  Company shall notify Administrative Agent prior to the funding
         of any Loans if any of the matters to which Company is required to
         certify in the applicable Notice of Borrowing is no longer true and
         correct as of the applicable Funding Date, and the acceptance by
         Company of the proceeds of any Loans shall constitute a
         re-certification by Company, as of the applicable Funding Date, as to
         the matters to which Company is required to certify in the applicable
         Notice of Borrowing.

                  Except as otherwise provided in subsections 2.6B, 2.6C and
         2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic
         notice in lieu thereof) shall be irrevocable on and after the related
         Interest Rate Determination Date, and Company shall be bound to either
         (i) make a borrowing in accordance therewith or (ii) pay all amounts
         due under subsection 2.6D.

                  C. Disbursement of Funds. All Loans under this Agreement shall
         be made by Lenders simultaneously and proportionately to their
         respective Pro Rata Shares, it being understood that no Lender shall be
         responsible for any default by any other Lender in that other Lender's
         obligation to make a Loan requested hereunder nor shall the
         Restructured Term Loan Commitment of any Lender to make the particular
         type of Loan requested be increased or decreased as a result of a
         default by any other Lender in that other Lender's obligation to make a
         Loan requested hereunder. Promptly after receipt by Administrative
         Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
         telephonic notice in lieu thereof), Administrative Agent shall promptly
         notify each Lender of the proposed borrowing. Each Lender shall make
         the amount of its Loan available to Administrative Agent, in same day
         funds in U.S. Dollars, at the Funding and Payment Office, not later
         than 11:00 A.M. (New York time) on the applicable Funding Date;
         provided that no funds shall be transferred with respect to the
         Restructured Term Loans and, upon satisfaction or waiver of the
         conditions precedent specified in subsections 4.1 and 4.3, such
         Restructured Term Loans shall be deemed made, and the proceeds deemed
         applied, in full satisfaction of all amounts of loans, unpaid interest
         and unpaid letter of credit fees outstanding under the Pre-Petition
         Credit Agreement and the Post-Default Advances Sublimit of

                                       39
<PAGE>

         the DIP Credit Agreement as shown on Schedule 2.1. In the case of
         Supplemental Term Loans, upon satisfaction or waiver of the conditions
         precedent specified in subsections 4.2 and 4.3, Administrative Agent
         shall make the proceeds of such Supplemental Term Loans available to
         Company on the applicable Funding Date by causing an amount of same day
         funds in U.S. Dollars equal to the proceeds of all such Supplemental
         Term Loans received by Administrative Agent from Lenders to be credited
         only to the account of Company at the Funding and Payment Office.

                  In the case of Supplemental Term Loans, unless Administrative
         Agent shall have been notified by any Lender prior to the Funding Date
         for any Supplemental Term Loans that such Lender does not intend to
         make available to Administrative Agent the amount of such Lender's
         Supplemental Term Loan requested on such Funding Date, Administrative
         Agent may assume that such Lender has made such amount available to
         Administrative Agent on such Funding Date and Administrative Agent may,
         in its sole discretion, but shall not be obligated to, make available
         to Company a corresponding amount on such Funding Date. If such
         corresponding amount is not in fact made available to Administrative
         Agent by such Lender, Administrative Agent shall be entitled to recover
         such corresponding amount on demand from such Lender together with
         interest thereon, for each day from such Funding Date until the date
         such amount is paid to Administrative Agent, at the customary rate set
         by Administrative Agent for the correction of errors among banks for
         three Business Days and thereafter at the Base Rate. If such Lender
         does not pay such corresponding amount forthwith upon Administrative
         Agent's demand therefor, Administrative Agent shall promptly notify
         Company and Company shall immediately pay such corresponding amount to
         Administrative Agent together with interest thereon, for each day from
         such Funding Date until the date such amount is paid to Administrative
         Agent, at the rate payable under this Agreement for Base Rate Loans.
         Nothing in this subsection 2.1C shall be deemed to relieve any Lender
         from its obligation to fulfill its Restructured Term Loan Commitment
         hereunder or to prejudice any rights that Company may have against any
         Lender as a result of any default by such Lender hereunder.

                  D. The Register.

                     (i) Administrative Agent shall maintain, at its address
         referred to in subsection 10.8, a register for the recordation of the
         names and addresses of Lenders and the Restructured Term Loan
         Commitments and Loans of each Lender from time to time (the
         "REGISTER"). The Register shall be available for inspection by Company
         or any Lender at any reasonable time and from time to time upon
         reasonable prior notice.

                     (ii) Administrative Agent shall record in the Register the
         Restructured Term Loans and Supplemental Term Loans from time to time
         of each Lender and each repayment or prepayment in respect of the
         principal amount of the Restructured Term Loans or Supplemental Term
         Loans of each Lender. Any such recordation shall be conclusive and
         binding on Company and each Lender, absent manifest error; provided
         that failure to make any such recordation, or any error in such
         recordation, shall not affect Company's Obligations in respect of the
         applicable Loans.

                     (iii) Each Lender shall record on its internal records
         (including, without limitation, the Notes held by such Lender) the
         amount of each Restructured Term Loan and

                                       40
<PAGE>

         Supplemental Term Loan made by it and each payment in respect thereof.
         Any such recordation shall be conclusive and binding on Company, absent
         manifest error; provided that failure to make any such recordation, or
         any error in such recordation, shall not affect Company's Obligations
         in respect of the applicable Loans; and provided, further that in the
         event of any inconsistency between the Register and any Lender's
         records, the recordations in the Register shall govern.

                    (iv) Company, Administrative Agent and Lenders shall deem
         and treat the Persons listed as Lenders in the Register as the holders
         and owners of the corresponding Restructured Term Loan Commitments and
         Loans listed therein for all purposes hereof, and no assignment or
         transfer of any such Restructured Term Loan Commitment or Loan shall be
         effective, in each case unless and until an Assignment Agreement
         effecting the assignment or transfer thereof shall have been accepted
         by Administrative Agent and recorded in the Register as provided in
         subsection 10.1B(ii). Prior to such recordation, all amounts owed with
         respect to the applicable Restructured Term Loan Commitment or Loan
         shall be owed to the Lender listed in the Register as the owner
         thereof, and any request, authority or consent of any Person who, at
         the time of making such request or giving such authority or consent, is
         listed in the Register as a Lender shall be conclusive and binding on
         any subsequent holder, assignee or transferee of the corresponding
         Restructured Term Loan Commitments or Loans.

                    (v) Company hereby designates Administrative Agent to serve
         as Company's agent solely for purposes of maintaining the Register as
         provided in this subsection 2.1D, and Company hereby agrees that, to
         the extent Administrative Agent serves in such capacity, Administrative
         Agent and its officers, directors, employees, agents and affiliates
         shall constitute Indemnitees for all purposes under subsection 10.3.

                  E. Notes. Company shall execute and deliver to each applicable
         Lender (or to Administrative Agent for that Lender) (i) on the Closing
         Date, a Restructured Term Note substantially in the form of Exhibit
         III-A annexed hereto to evidence that Lender's Restructured Term Loans,
         in the principal amount of that Lender's Restructured Term Loan and
         with other appropriate insertions and (ii) on the date of the making of
         each Supplemental Term Loan, a Supplemental Term Note substantially in
         the form of Exhibit III-B annexed hereto to evidence that Lender's
         Supplemental Term Loan, in the principal amount of that Lender's
         Supplemental Term Loan and with other appropriate insertions.

                  2.2 INTEREST ON THE LOANS.

                  A. Rate of Interest. Subject to the provisions of subsections
         2.6 and 2.7, each Loan shall bear interest on the unpaid principal
         amount thereof from the date made through maturity (whether by
         acceleration or otherwise) at a rate determined by reference to the
         Base Rate or the Adjusted Eurodollar Rate; provided that Supplemental
         Term Loans may bear a fixed rate of interest as permitted by subsection
         2.1A(ii)(a) and the provisions of this subsection 2.2 shall not be
         applicable to the extent they relate to Loans bearing floating rates of
         interest. The applicable basis for determining the rate of interest
         with respect to any Loan shall be selected by Company initially at the
         time a Notice of Borrowing is given with respect to such Loan pursuant
         to subsection 2.1B, and the basis for determining the interest rate
         with respect to any Loan may be changed from time to time pursuant to
         and in accordance with subsection 2.2D. If on any day

                                       41
<PAGE>

         a Loan is outstanding with respect to which notice has not been
         delivered to Administrative Agent in accordance with the terms of this
         Agreement specifying the applicable basis for determining the rate of
         interest, then for that day that Loan shall bear interest determined by
         reference to the Base Rate.

                           (i) Restructured Term Loans. Subject to the
         provisions of subsections 2.2E and 2.7, Restructured Term Loans shall
         bear interest through maturity based on the Applicable Leverage Ratio
         as follows:

                                    (a) if a Base Rate Loan, then at the sum of
                           the Base Rate then in effect plus the Applicable Base
                           Rate Margin per annum then in effect; or

                                    (b) if a Eurodollar Rate Loan, then at the
                           sum of the Adjusted Eurodollar Rate then in effect
                           plus the Applicable Eurodollar Rate Margin per annum
                           then in effect.

                  "APPLICABLE BASE RATE MARGIN" and "APPLICABLE EURODOLLAR RATE
         MARGIN" means for each Base Rate Loan or Eurodollar Rate Loan,
         respectively, the percentage per annum set forth below for that type of
         Loan based upon the Applicable Leverage Ratio for the applicable
         period:

<TABLE>
<CAPTION>
                                                                              APPLICABLE
                                                                           EURODOLLAR RATE   APPLICABLE BASE
                        APPLICABLE LEVERAGE RATIO                               MARGIN         RATE MARGIN
<S>                                                                        <C>                <C>
(A)      Greater than or equal to 6.50:1.00                                    4.50%             3.50%
(B)      Greater than or equal to 6.00:1.00 but less than 6.50:1.00            4.375%            3.375%
(C)      Greater than or equal to 5.50:1.00 but less than 6.00:1.00            4.25%             3.25%
(D)      Greater than or equal to 5.00:1.00 but less than 5.50:1.00            4.125%            3.125%
(E)      Greater than or equal to 4.50:1.00 but less than 5.00:1.00            4.00%             3.00%
(F)      Greater than or equal to 4.00:1.00 but less than 4.50:1.00            3.875%            2.875%
(G)      Greater than or equal to 3.50:1.00 but less than 4.00:1.00            3.625%            2.625%
(H)      Less than 3.50:1.00                                                   3.50%             2.50%
</TABLE>

                           (ii) Supplemental Term Loans. Subject to the
         provisions of subsections 2.2E and 2.7, Supplemental Term Loans shall
         bear interest determined at the date of incurrence as agreed among
         Company, the Lenders making Supplemental Term Loans and Administrative
         Agent and as permitted by subsection 2.1A(ii)(a) and this subsection
         2.2A(ii) shall be deemed amended on each date Supplemental Term Loans
         are made to set forth herein the interest rates borne by such Loans.

                                       42
<PAGE>

                  B. Interest Periods. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three, six or, if available to all
Lenders, twelve month period; provided that:

                     (i) the initial Interest Period for any such Loan shall
commence on the Funding Date of such Loan, in the case of a Loan initially made
as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate
Loan;

                     (ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;

                     (iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would otherwise
expire on a day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;

                     (iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (v) of this subsection 2.2B, end on the last Business
Day of a calendar month;

                     (v) no Interest Period shall extend beyond the scheduled
maturity date of the applicable Loans;

                     (vi) there shall be no more than 10 Interest Periods
outstanding at any time; and

                     (vii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan, in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.

                  C. Interest Payments. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).

                  D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Loans equal to $1,000,000 and integral multiples of
$1,000,000 in excess of that amount from Base Rate Loans to Eurodollar Rate
Loans; or (ii) upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$1,000,000 and

                                       43
<PAGE>

integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan; or (iii) subject to the payment of all amounts due under subsection 2.6D,
to convert a Eurodollar Rate Loan into a Base Rate Loan at any time.

                  Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 11:00 A.M. (New York time) on the proposed
conversion date (in the case of a conversion to a Base Rate Loan) or at least
three Business Days in advance of the proposed conversion/continuation date (in
the case of a conversion to, or a continuation of, a Eurodollar Rate Loan). A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan, the requested Interest Period, and (v) in the case
of a conversion to, or a continuation of, a Eurodollar Rate Loan, that no
Potential Event of Default or Event of Default has occurred and is continuing.
In lieu of delivering the above-described Notice of Conversion/Continuation,
Company may give Administrative Agent telephonic notice by the required time of
any proposed conversion or continuation under this subsection 2.2D; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Conversion/Continuation to Administrative Agent on or before the proposed
conversion or continuation date.

                  Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.

                  Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of,
a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.

                  E. Default Rate. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable Insolvency Laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.

                  F. Computation of Interest. Interest on the Loans shall be
computed (i) in the case of Base Rate Loans, on the basis of a 365-day or
366-day year, as the case may be, and (ii)

                                       44
<PAGE>

in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each
case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, (i) the date of the making of such
Loan or the first day of an Interest Period applicable to such Loan or, with
respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the
date of conversion of such Eurodollar Rate Loan to such Base Rate Loan shall be
included, and (ii) the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.

                  2.3 FEES.

                  A. Debt Extension Fee. Company agrees to pay to Administrative
Agent on the Closing Date for distribution to each Lender having a Restructured
Term Loan Commitment (other than the Sponsors, any Affiliate of any Sponsor and
any Affiliate of Company) in accordance with subsection 2.3D a debt extension
fee equal to 1.50% of the aggregate amount of the Restructured Term Loans made
on the Closing Date by such Lenders.

                  B. Post-Default Advances Sublimit Extension Fee. Company
agrees to pay to Administrative Agent on the Closing Date for distribution to
each Lender having a Restructured Term Loan Commitment (other than the Sponsors,
any Affiliate of any Sponsor and any Affiliate of Company) in accordance with
subsection 2.3D a Post-Default Advances Sublimit extension fee equal to 2.50% of
the aggregate amount of loans made under the Post-Default Advances Sublimit and
refinanced with the Restructured Term Loans made on the Closing Date by such
Lenders.

                  C. Credit Approval Fee. Company agrees to pay to
Administrative Agent on the Closing Date for distribution to each Lender having
a Restructured Term Loan Commitment (other than the Sponsors, any Affiliate of
any Sponsor and any Affiliate of Company) in accordance with subsection 2.3D a
credit approval fee in an aggregate amount equal to $18,612.37.

                  D. Allocation of Fees. The aggregate amount of fees payable by
Company pursuant to subsections 2.3A, 2.3B and 2.3C shall be allocated among,
and distributed by Administrative Agent to, the Lenders having a Restructured
Term Loan Commitment (other than the Sponsors, any Affiliate of any Sponsor and
any Affiliate of Company) in the amounts set forth on Schedule 2.3D.

                  E. Supplemental Term Loan Fee. Company agrees to pay to
Administrative Agent on each date of the making of Supplemental Term Loans for
distribution to each Lender making a Supplemental Term Loan on such date in
accordance with its Pro Rata Share a fee in an amount agreed upon by Company and
the Lenders making Supplemental Term Loans on such date.

                                       45
<PAGE>

                  F. Administrative Agent's Fees. Company agrees to pay to
Administrative Agent such other fees in the amounts and at the times separately
agreed upon between Company and Administrative Agent.

                  2.4 SCHEDULED PAYMENTS OF LOANS; PREPAYMENTS OF LOANS; GENERAL
PROVISIONS REGARDING PAYMENTS.

                  A. Scheduled Payments.

                      (i) Restructured Term Loans. Company shall make principal
payments on the Restructured Term Loans in installments on the dates and in the
amounts set forth below:

<TABLE>
<CAPTION>
                          DATE                     SCHEDULED REPAYMENT OF RESTRUCTURED TERM LOANS
                          ----                     ----------------------------------------------
<S>                                                <C>
          May 31, 2002                                                 $1,250,000.00
          August 31, 2002                                               1,250,000.00
          November 30, 2002                                             1,250,000.00
          February 28, 2003                                             1,250,000.00

          May 31, 2003                                                  3,750,000.00
          August 31, 2003                                               3,750,000.00
          November 30, 2003                                             3,750,000.00
          February 29, 2004                                             3,750,000.00

          May 31, 2004                                                  5,000,000.00
          August 31, 2004                                               5,000,000.00
          November 30, 2004                                             5,000,000.00
          February 28, 2005                                             5,000,000.00

          May 31, 2005                                                  5,000,000.00
          August 31, 2005                                               5,000,000.00
          November 30, 2005                                             5,000,000.00
          February 28, 2006                                             5,000,000.00

          May 31, 2006                                                  6,250,000.00
          August 31, 2006                                               6,250,000.00
          November 30, 2006                                             6,250,000.00
          February 28, 2007                                             6,250,000.00

          May 31, 2007                                                  7,500,000.00
          August 31, 2007                                               7,500,000.00
          November 30, 2007                                             7,500,000.00
          February 29, 2008                                           322,432,498.68

          Total                                                      $429,932,498.68
</TABLE>

                                       46

<PAGE>

provided that the scheduled installments of principal of the Restructured Term
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Restructured Term Loans in accordance with
subsection 2.4B(iii); and provided, further, that the Restructured Term Loans
and all other amounts owed hereunder with respect to the Restructured Term Loans
shall be paid in full no later than February 29, 2008 and the final installment
payable by Company in respect of the Restructured Term Loans on such date shall
be in an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this Agreement with
respect to the Restructured Term Loans.

                  (ii) Supplemental Term Loans. If any Supplemental Term Loans
are made, Company shall make principal payments on the Supplemental Term Loans
in installments on the dates and in the amounts agreed between Company and the
Lenders making such Supplemental Term Loans at the time such Loans are made, and
this subsection 2.4A(ii) shall be deemed amended on each date Supplemental Term
Loans are made to set forth herein such dates and such amounts.

               B. Prepayments.

                  (i) Voluntary Prepayments. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case given to Administrative Agent by 11:00
A.M. (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to time prepay any Loans
on any Business Day without premium or penalty in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount; provided, however, that a Eurodollar Rate Loan may only
be prepaid on the expiration of the Interest Period applicable thereto unless
Company complies with subsection 2.6D with respect to any breakage costs
resulting from such prepayment being made on a date prior to the expiration of
the applicable Interest Period. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in subsection 2.4B(iii).

                  (ii) Mandatory Prepayments. Subject to subsection 2.4B(iii)(e)
regarding the prepayment of the Loans and the Priority Secured Loans upon the
occurrence and during the continuation of a Specified Priority Secured Loan
Default, the Loans shall be prepaid in the amounts and under the circumstances
set forth below, all such prepayments and/or reductions to be applied as set
forth below or as more specifically provided in subsection 2.4B(iii):

                                       47
<PAGE>

                  (a) Prepayments from Net Asset Sale Proceeds.

                      (1) Minor Asset Sale Proceeds. No later than the third
         Business Day following the date of receipt by Company or any of its
         Subsidiaries of any Net Asset Sale Proceeds in respect of any Minor
         Asset Sale (other than Deemed Major Asset Sale Proceeds), (A) Company
         shall prepay the Loans in an amount equal to 75% of such Net Asset Sale
         Proceeds (the "MINOR ASSET SALE PREPAYMENT AMOUNT") and (B) to the
         extent the Minor Asset Sale Prepayment Amount exceeds the aggregate
         outstanding principal amount of the Loans, Company shall prepay the
         Priority Secured Loans, and/or the Priority Secured Revolving Loan
         Commitments shall be permanently reduced, in an amount equal to such
         excess in accordance with the Priority Secured Credit Agreement;
         provided, however, that so long as no Event of Default or Potential
         Event of Default has occurred and is continuing at the time of such
         sale, Company may retain the first $10,000,000 of Net Asset Sale
         Proceeds in respect of Minor Asset Sales in each Fiscal Year (in
         addition to the 25% of such proceeds not required to be applied to
         prepay the Loans) and any unused amount of such $10,000,000 retention
         amount for any Fiscal Year shall be added to the retention amount
         provided in this subsection for the next succeeding Fiscal Year.

                      (2) Major Asset Sale Proceeds. No later than the third
         Business Day following the date of receipt by Company or any of its
         Subsidiaries of any Net Asset Sale Proceeds in respect of any Major
         Asset Sale or Deemed Major Asset Sale Proceeds, (A) Company shall
         prepay the Loans in an amount equal to 100% of such Net Asset Sale
         Proceeds or Deemed Major Asset Sale Proceeds (the "MAJOR ASSET SALE
         PREPAYMENT AMOUNT") and (B) to the extent the Major Asset Sale
         Prepayment Amount exceeds the aggregate outstanding principal amount of
         the Loans, Company shall prepay the Priority Secured Loans, and/or the
         Priority Secured Revolving Loan Commitments shall be permanently
         reduced, in an amount equal to such excess in accordance with the
         Priority Secured Credit Agreement.

                      (3) Notwithstanding anything to the contrary contained in
         subsections 2.4B(ii)(a)(1) and (2), Company shall not be required to
         use Net Asset Sale Proceeds from Asset Sales of assets listed on
         Schedule 1.1C to prepay the Loans to the extent such Net Asset Sale
         Proceeds (A) do not exceed the West 34th Street Loan Amount and (B) are
         applied in accordance with subsection 7.7(iv).

                  (b) Prepayments from Net Insurance/Condemnation Proceeds. No
later than the third Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds in excess of $500,000 (determined with respect
to each occurrence or event giving rise to such Net Insurance/Condemnation
Proceeds), (A) Company shall prepay the Loans in an amount equal to 100% of such
Net Insurance/Condemnation Proceeds (the "INSURANCE/CONDEMNATION PREPAYMENT
AMOUNT") and (B) to the extent the Insurance/Condemnation Prepayment Amount
exceeds the aggregate outstanding

                                       48
<PAGE>

principal amount of the Loans, Company shall prepay the Priority Secured Loans,
and/or the Priority Secured Revolving Loan Commitments shall be permanently
reduced, in an amount equal to such excess in accordance with the Priority
Secured Credit Agreement; provided, however, that so long as no Event of Default
or Potential Event of Default has occurred and is continuing, no such prepayment
shall be required to the extent Company determines to utilize such Net
Insurance/Condemnation Proceeds to repair, restore or replace the assets in
respect of which such Net Insurance/Condemnation Proceeds were received and
Company so utilizes or contractually commits to utilize such Net
Insurance/Condemnation Proceeds within 360 days of the receipt thereof; provided
further, however, that, unless otherwise required by the terms of the lease for
a Leasehold Property with respect to which such Net Insurance/Condemnation
Proceeds were received, pending such utilization, such proceeds shall be applied
to repay US Tranche Revolving Loans and CN Tranche Revolving Loans (each as
defined in the Priority Secured Credit Agreement) under the Priority Secured
Credit Agreement (but not reduce the Priority Secured Revolving Loan
Commitments) and, after payment in full thereof, deposited into the Collateral
Account.

                  (c) Prepayments Due to Issuance of Debt. No later than the
third Business Day following the date of receipt by Company or any of its
Subsidiaries of any Net Debt Securities Proceeds, (A) Company shall prepay the
Loans in an amount equal to 100% of such Net Debt Securities Proceeds (the "DEBT
SECURITIES PREPAYMENT AMOUNT") and (B) to the extent the Debt Securities
Prepayment Amount exceeds the aggregate outstanding principal amount of the
Loans, Company shall prepay the Priority Secured Loans, and/or the Priority
Secured Revolving Loan Commitments shall be permanently reduced, in an amount
equal to such excess in accordance with the Priority Secured Credit Agreement.

                  (d) Prepayments Due to Issuance of Equity Securities.

                           (1) Proceeds of Public Equity Offerings. No later
                  than the third Business Day following the date of receipt by
                  Company or any of its Subsidiaries of Net Equity Securities
                  Proceeds from a Public Equity Offering, (A) Company shall
                  prepay the Loans in an amount equal to 75% of such Net Equity
                  Securities Proceeds (the "PUBLIC EQUITY PREPAYMENT AMOUNT")
                  and (B) to the extent the Public Equity Prepayment Amount
                  exceeds the aggregate outstanding principal amount of the
                  Loans, Company shall prepay the Priority Secured Loans, and/or
                  the Priority Secured Revolving Loan Commitments shall be
                  permanently reduced, in an amount equal to such excess in
                  accordance with the Priority Secured Credit Agreement;
                  provided, however, that so long as no Event of Default or
                  Potential Event of Default has occurred and is continuing at
                  the time Company or any of its Subsidiaries receives such Net
                  Equity Securities Proceeds (y) if the Applicable Leverage
                  Ratio is less than 3.50:1.00 but greater than or equal to
                  3.00:1.00 at the time of such issuance (after giving pro forma
                  effect to the application of such Net Equity Securities
                  Proceeds), the Public Equity Prepayment Amount shall be 50% of
                  such Net Equity Securities Proceeds, and (z) if the Applicable
                  Leverage Ratio is less than 3.00:1.00 at the time of such

                                       49
<PAGE>

                  issuance (after giving such pro forma effect), no portion of
                  such Net Equity Securities Proceeds shall be required to be so
                  applied.

                  (2) Proceeds of Private Non-Sponsor Equity Offerings. No later
                  than the third Business Day following the date of receipt by
                  Company or any of its Subsidiaries of Net Equity Securities
                  Proceeds from a Private Non-Sponsor Equity Offering,

                           (A) if, on the date of receipt of such Net Equity
                        Securities Proceeds, Sponsors own or manage 51% or more
                        of the common equity of Company, (x) Company shall be
                        entitled to retain the first $25,000,000 of such Net
                        Equity Securities Proceeds and (y) (i) Company shall
                        prepay the Loans in an amount equal to 75% of the
                        cumulative amount of such Net Equity Securities Proceeds
                        in excess of $25,000,000 (the "PRIVATE EQUITY PREPAYMENT
                        AMOUNT") and (ii) to the extent the Private Equity
                        Prepayment Amount exceeds the aggregate outstanding
                        principal amount of the Loans, Company shall prepay the
                        Priority Secured Loans, and/or the Priority Secured
                        Revolving Loan Commitments shall be permanently reduced,
                        in an amount equal to such excess in accordance with the
                        Priority Secured Credit Agreement; provided, however, so
                        long as no Event of Default or Potential Event of
                        Default has occurred and is continuing at the time
                        Company or any of its Subsidiaries receives such Net
                        Equity Securities Proceeds, (a) if the Applicable
                        Leverage Ratio is less than 3.50:1.00 but greater than
                        or equal to 3.00:1.00 at the time of such issuance
                        (after giving pro forma effect to the application of
                        such Net Equity Securities Proceeds), the Private Equity
                        Prepayment Amount shall be 50% of the cumulative amount
                        of such Net Equity Securities Proceeds in excess of
                        $25,000,000, and (b) if the Applicable Leverage Ratio is
                        less than 3.00:1.00 at the time of such issuance (after
                        giving such pro forma effect), no portion of such Net
                        Equity Securities Proceeds shall be required to be so
                        applied; and

                           (B) if, on the date of receipt of such Net Equity
                        Securities Proceeds, Sponsors own or manage less than
                        51% of the common equity of Company, (x) Company shall
                        prepay the Loans in an amount equal to 75% of such Net
                        Equity Securities Proceeds (the "ALTERNATIVE PRIVATE
                        EQUITY PREPAYMENT AMOUNT") and (y) to the extent the
                        Alternative Private Equity Prepayment Amount exceeds the
                        aggregate outstanding principal amount of the Loans,
                        Company shall prepay the Priority Secured Loans, and/or
                        the Priority Secured Revolving Loan Commitments shall be
                        permanently reduced, in an amount equal to such excess
                        in accordance with the Priority Secured Credit
                        Agreement; provided, however, so long as no Event of
                        Default or Potential Event of Default has occurred and
                        is continuing at the time Company or any of its
                        Subsidiaries receives such Net Equity Securities
                        Proceeds, (a) if the Applicable Leverage Ratio is less
                        than 3.50:1.00 but greater than or equal to 3.00:1.00 at
                        the time of such issuance (after giving pro forma effect
                        to

                                       50
<PAGE>

                  the application of such Net Equity Securities Proceeds), the
                  Alternative Private Equity Prepayment Amount shall be 50% of
                  such Net Equity Securities Proceeds, and (b) if the Applicable
                  Leverage Ratio is less than 3.00:1.00 at the time of such
                  issuance (after giving such pro forma effect), no portion of
                  such Net Equity Securities Proceeds shall be required to be so
                  applied.

                  (e) Prepayments from Excess Cash Flow. If there shall be
Excess Cash Flow of Company and its Subsidiaries for any Fiscal Year (commencing
with the Fiscal Year ending February 28, 2003), no later than 90 days after the
end of such Fiscal Year, (A) Company shall prepay the Loans in an amount equal
to the sum of (x) 100% of the first $25,000,000 of Excess Cash Flow of that
Fiscal Year plus (y) 75% of such Excess Cash Flow in excess of $25,000,000 (such
sum, the "EXCESS CASH FLOW PREPAYMENT AMOUNT") and (B) to the extent the Excess
Cash Flow Prepayment Amount exceeds the aggregate outstanding principal amount
of the Loans, Company shall prepay the Priority Secured Loans, and/or the
Priority Secured Revolving Loan Commitments shall be permanently reduced, in an
amount equal to such excess in accordance with the Priority Secured Credit
Agreement; provided that such mandatory prepayment and/or reduction in the
Priority Secured Revolving Loan Commitment for the Fiscal Year ending February
28, 2003, if any, shall be apportioned to relate solely to the period from the
Closing Date until February 28, 2003; and provided further that so long as no
Event of Default or Potential Event of Default has occurred and is continuing,
Company may retain all Excess Cash Flow with respect to any Fiscal Year if (1)
the Leverage Ratio at the last day of such Fiscal Year is 3.50:1.00 or less and
(2) the Leverage Ratio at the last day of the immediately preceding Fiscal Year
was 3.50:1.00 or less.

                  (f) Prepayments from Permitted Cure Securities. If Company
issues Permitted Cure Securities and the proceeds thereof are required to be
applied to reduce Wholly Owned Total Debt pursuant to subsection 7.6C, on the
date of receipt of such proceeds, Company shall use 100% of the proceeds of such
Permitted Cure Securities first to prepay the Priority Secured Term Loans in
accordance with the Priority Secured Credit Agreement to the full extent
thereof, second, to the extent of any remaining proceeds, to prepay the Priority
Secured Revolving Loans to the full extent thereof (but not reduce the Priority
Secured Revolving Loan Commitments) in accordance with the Priority Secured
Credit Agreement and third, to the extent of any remaining proceeds, to prepay
the Loans.

                  (g) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations. Concurrently with
any prepayment of the Loans pursuant to subsections 2.4B(ii)(a)-(f), Company
shall deliver to Administrative Agent an Officer's Certificate demonstrating the
calculation of (1) the amount (the "NET PROCEEDS AMOUNT") of the applicable Net
Asset Sale Proceeds, the applicable Net Insurance/Condemnation Proceeds, the
applicable Net Equity Securities Proceeds, the applicable Net Debt Securities
Proceeds, the applicable Excess Cash Flow or the required reduction of Wholly
Owned Total Debt that gave rise to such prepayment and/or reduction, (2) in the
case of a prepayment under subsection 2.4B(ii)(a), the amount of Net Asset Sale
Proceeds in respect of any Minor Asset Sale, the amount of Net Asset

                                       51
<PAGE>

Sale Proceeds in respect of any Major Asset Sale, and the amount of any Deemed
Major Asset Sale Proceeds, and (3) in the case of a prepayment under subsection
2.4B(ii)(d), the amount of Net Equity Securities Proceeds from a Public Equity
Offering and the amount of Net Equity Securities Proceeds from a Private
Non-Sponsor Equity Offering. If Company shall subsequently determine that the
actual Net Proceeds Amount was greater than the amount set forth in such
Officer's Certificate, Company shall promptly make an additional prepayment of
the Loans in an amount equal to the amount of such excess, and Company shall
concurrently therewith deliver to Administrative Agent an Officer's Certificate
demonstrating the derivation of the additional Net Proceeds Amount resulting in
such excess.

             (iii) Application of Prepayments.

                  (a) Application of Voluntary Prepayments by Type of Loan. Any
voluntary prepayments pursuant to subsection 2.4B(i) shall be applied ratably
between the Restructured Term Loans and the Supplemental Term Loans in
accordance with the respective amounts thereof.

                  (b) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of the Loans shall be applied first to
Base Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in a manner that minimizes the amount of any payments required to be made
by Company pursuant to subsection 2.6D.

                  (c) Application of Mandatory Prepayments by Type of Loan.
Subject to subsection 2.4B(iii)(e), any amount required to be applied as a
mandatory prepayment of the Loans pursuant to subsections 2.4B(ii)(a)-(f) shall
be applied ratably between Restructured Term Loans and Supplemental Term Loans
in accordance with the respective amounts thereof.

                  (d) Application of Prepayments by Maturity of Installment of
Loans. Any voluntary prepayments pursuant to subsection 2.4B(i) and any amount
required to be applied to a mandatory prepayment of the Loans pursuant to
subsections 2.4B(ii)(a)-(f) shall be applied to each unpaid installment of the
applicable Loan set forth or deemed set forth in subsection 2.4A(i) or 2.4A(ii)
on a pro rata basis in accordance with the respective amounts thereof as of the
date of such prepayment.

                  (e) Application of Mandatory Prepayment upon Specified
Priority Secured Loan Default. Notwithstanding anything to the contrary
contained herein, upon the occurrence and during the continuation of a Specified
Priority Secured Loan Default, any amount Company is required to apply first as
a mandatory prepayment of the Loans under any of subsections 2.4B(ii)(a)-(e)
shall instead be applied first to prepay the Priority Secured Loans (without a
permanent reduction of the Priority Secured Revolving Loan Commitments) in
accordance with the Priority Secured Credit Agreement, and second to the extent
such amount exceeds the aggregate outstanding principal amount of the Priority
Secured Loans to prepay the Loans.

                                       52
<PAGE>

                  (f) Waiver of Certain Mandatory Prepayments. Notwithstanding
anything contained herein to the contrary, so long as any Restructured Term
Loans are outstanding, if Company is required to make any mandatory prepayment
or elects to grant an option with respect to any voluntary prepayment (a
"WAIVABLE PREPAYMENT") of the Supplemental Term Loans pursuant to subsection
2.4B(i) or (ii), then (1) not less than three Business Days prior to the date
(the "REQUIRED PREPAYMENT DATE") on which Company is required to make such
Waivable Prepayment, Company shall notify Administrative Agent of the amount of
such Waivable Prepayment, and Administrative Agent will promptly thereafter
notify each Lender holding an outstanding Supplemental Term Loan of the amount
of such Lender's Pro Rata Share of such Waivable Prepayment and such Lender's
option to refuse such amount, (2) each such Lender may exercise such option by
giving written notice to Company and Administrative Agent of its election to do
so on or before the first Business Day (the "CUTOFF DATE") prior to the Required
Prepayment Date (it being understood that any Lender that does not notify
Company and Administrative Agent of its election to exercise such option on or
before the Cutoff Date shall be deemed to have elected, as of the Cutoff Date,
not to exercise such option), and (3) on the Required Prepayment Date, Company
shall pay to Administrative Agent the amount of the Waivable Prepayment, which
amount shall be applied (x) in an amount equal to that portion of the Waivable
Prepayment payable to those Lenders that have elected not to exercise such
option, to prepay the Supplemental Term Loans of such Lenders (which prepayment
shall be applied to the scheduled installments of principal of the Supplemental
Term Loans in accordance with subsection 2.4B(iii)(d)) and (y) in an amount
equal to that portion of the Waivable Prepayment otherwise payable to those
Lenders that have elected to exercise such option, first to prepay the
Restructured Term Loans (which prepayment shall be applied to the scheduled
installments of principal of the Restructured Term Loans in accordance with
subsection 2.4B(iii)(d)), second, to the extent such portion of the Waivable
Prepayment exceeds the aggregate outstanding principal amount of the
Restructured Term Loans, to prepay the Supplemental Term Loans held by those
Lenders that have elected not to exercise such option (which prepayment shall be
applied to the scheduled installments of principal of the Supplemental Term
Loans in accordance with subsection 2.4B(iii)(d)), third, to the extent such
portion of the Waivable Prepayment exceeds the aggregate outstanding principal
amount of the Supplemental Term Loans held by those Lenders that have elected
not to exercise such option and the Restructured Term Loans, to prepay Priority
Secured Term Loans in accordance with the Priority Secured Credit Agreement,
fourth, to the extent such portion of the Waivable Prepayment exceeds the
aggregate outstanding principal amount of the Priority Secured Term Loans, the
Supplemental Term Loans held by those Lenders that have elected not to exercise
such option and the Restructured Term Loans, to prepay the Supplemental Term
Loans held by those Lenders that have elected not to exercise such option, and
fifth, to the extent such portion of the Waivable Prepayment exceeds the
aggregate outstanding principal amount of the Priority Secured Term Loans, the
Supplemental Term Loans and the Restructured Term Loans, to prepay the Priority
Secured Revolving Loans and to permanently reduce the Priority Secured Revolving
Loan Commitments in accordance with the Priority Secured Credit Agreement.

                                       53

<PAGE>

                  C. General Provisions Regarding Payments.

                  (i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in U.S. Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon (New York time) on the date due
at the Funding and Payment Office for the account of Lenders. Funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Company on the next succeeding Business Day. In order to effect
timely payment of any interest, fees, commissions or other amounts due
hereunder, Company hereby authorizes Administrative Agent to charge its accounts
with Administrative Agent to make Loans for its own account.

                  (ii) Application of Payments to Principal and Interest. Except
as provided in subsection 2.2C, all payments in respect of the principal amount
of any Loan shall include payment of accrued interest on the principal amount
being repaid or prepaid, and all such payments (and, in any event, any payments
in respect of any Loan on a date when interest is due and payable with respect
to such Loan) shall be applied to the payment of interest before application to
principal.

                  (iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to which such
payments relate, in each case proportionately to Lenders' respective Pro Rata
Shares of such Loans; provided that payments of interest in respect of Loans
which are Base Rate Loans shall be apportioned ratably among Lenders in
proportion to the average daily amount of such Base Rate Loans of each Lender
outstanding during the period in which such interest shall have accrued.
Administrative Agent shall promptly distribute to each Lender, at its primary
address set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent in respect of Loans. Notwithstanding
the foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate
Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative
Agent shall give effect thereto in apportioning payments received thereafter.

                  (iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.

                  (v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and of
the date to which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made under such Note

                                       54
<PAGE>

shall not limit or otherwise affect the obligations of Company hereunder or
under such Note with respect to any Loan or any payments of principal or
interest on such Note.

                  D. Application of Proceeds of Collateral and Payments Under
Subsidiary Guaranty.

                      (i) Application of Proceeds of Collateral. Except as
provided in subsection 2.4B(ii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
under any Collateral Document upon the occurrence and during the continuation of
an Event of Default or Potential Event of Default, may, in the discretion of
Collateral Agent, be held by Collateral Agent as Collateral for, and/or (then or
at any time thereafter) applied in full or in part by Collateral Agent against,
the applicable Secured Obligations (as defined in such Collateral Document) in
accordance with the terms of the Intercreditor Agreement.

                      (ii) Application of Payments Under Subsidiary Guaranty.
All payments received by Collateral Agent under the Subsidiary Guaranty shall be
applied promptly from time to time by Collateral Agent in accordance with the
terms of the Intercreditor Agreement.

                  2.5 USE OF PROCEEDS.

                  A. Restructured Term Loans. The proceeds of the Restructured
Term Loans shall be deemed to have been used to repay unpaid revolving loans,
unpaid interest thereon and unpaid letter of credit fees under the Pre-Petition
Credit Agreement held by the Lenders having Restructured Term Loan Commitments
and the loans made pursuant to the Post-Default Advances Sublimit under the DIP
Credit Agreement held by the Lenders having Restructured Term Loan Commitments.

                  B. Supplemental Term Loans. The proceeds of the Supplemental
Term Loans shall be used solely to refinance Acquired Indebtedness in Permitted
Supplemental Term Loan Acquisitions.

                  C. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.

                  2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

                  Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:

                                       55
<PAGE>

                  A. Determination of Applicable Interest Rate. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate is
then being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.

                  B. Inability to Determine Applicable Interest Rate. If
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and such Lenders that the circumstances
giving rise to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Company.

                  C. Illegality or Impracticability of Eurodollar Rate Loans. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market
or the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection

                                       56
<PAGE>

2.6D, to rescind such Notice of Borrowing or Notice of Conversion/Continuation
as to all Lenders by giving notice (by telefacsimile or by telephone confirmed
in writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar
Rate Loans in accordance with the terms of this Agreement.

                  D. Compensation For Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.

                  E. Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.

                  F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.

                  G. Eurodollar Rate Loans After Default. After the occurrence
of and during the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by

                                       57
<PAGE>

Company with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by Company.

                  2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.

                  A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B, if any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
Governmental Authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other Governmental
Authority or quasi-governmental authority (whether or not having the force of
law):

                  (i) subjects such Lender (or its applicable lending office) to
any Covered Tax with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;

                  (ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or

                  (iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than twenty-four months prior to the time
it gives notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such
twenty-four month period so long as such Lender has given such notice to Company
no later than twenty-four months from the time circumstance became applicable to
such Lender. Such Lender

                                       58
<PAGE>

shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

                  B. Withholding of Taxes.

                  (i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Term Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Covered Tax imposed, levied, collected, withheld
or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction from
or to which a payment is made by or on behalf of Company or by any federation or
organization of which the United States of America or any such jurisdiction is a
member at the time of payment.

                  (ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of any
Covered Tax from any sum paid or payable by Company to Administrative Agent or
any Lender under any of the Term Loan Documents:

                  (a) Company shall notify Administrative Agent of any such
         requirement or any change in any such requirement as soon as Company
         becomes aware of it;

                  (b) Company shall pay any such Covered Tax before the date on
         which penalties attach thereto, such payment to be made (if the
         liability to pay is imposed on Company) for its own account or (if that
         liability is imposed on Administrative Agent or such Lender, as the
         case may be) on behalf of and in the name of Administrative Agent or
         such Lender;

                  (c) the sum payable by Company in respect of which the
         relevant deduction or withholding with respect to such Covered Tax is
         required shall be increased to the extent necessary to ensure that,
         after the making of that deduction or withholding, Administrative Agent
         or such Lender, as the case may be, receives on the due date a net sum
         equal to what it would have received had no such deduction or
         withholding been required or made; and

                  (d) within 30 days after the due date of payment of any such
         Covered Tax which it is required by clause (b) above to pay, Company
         shall deliver to Administrative Agent evidence reasonably satisfactory
         to the Administrative Agent of such deduction, withholding or payment
         and of the remittance of such Covered Tax to the relevant taxing or
         other authority;

         provided that Company will not be required to pay any additional amount
         to Administrative Agent or any Lender under clause (c) above with
         respect to the deduction, withholding or payment of any Covered Tax or
         under clause (i) of subsection 2.7A in respect of any Covered Tax
         unless, after the date hereof (in the case of each Lender listed

                                       59
<PAGE>

         on Schedule 2.1) or after the date of the Assignment Agreement pursuant
         to which such Lender became a Lender (in the case of each other Lender)
         there has been a Change in Law which shall result in a required
         increase in the rate of such deduction, withholding or payment with
         respect to such Covered Tax from that in effect at the date of this
         Agreement or at the date of such Assignment Agreement, as the case may
         be, in respect of payments to such Lender or its applicable lending
         office on such date.

                  (iii) Evidence of Exemption from Withholding Taxes.

                  (a) Each Lender that is not a United States Person within the
         meaning of Section 7701(a)(30) of the Internal Revenue Code (for
         purposes of this subsection 2.7B(iii), a "NON-US LENDER") shall deliver
         to Administrative Agent and Company, on or prior to the Closing Date
         (in the case of each Lender listed on the signature pages hereof) or on
         or prior to the date of the Assignment Agreement pursuant to which it
         becomes a Lender (in the case of each other Lender), and at such other
         times as may be necessary in the determination of Company or
         Administrative Agent (each in the reasonable exercise of its
         discretion), (X) two original copies of Internal Revenue Service Form
         W-8BEN or W-8ECI (or any successor forms), properly completed and duly
         executed by such Lender, together with any other form, certificate or
         statement of exemption required under the Internal Revenue Code or the
         regulations issued thereunder, in each case establishing that such
         Lender is not subject to any deduction or withholding of United States
         federal income tax with respect to any payments to such Lender of
         principal, interest, fees or other amounts payable under any of the
         Term Loan Documents or (Y) if such Lender is not a "bank" or other
         Person described in Section 881(c)(3) of the Internal Revenue Code and
         cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI
         pursuant to clause (X) above, a Certificate re Non-Bank Status together
         with two original copies of the appropriate Internal Revenue Service
         Form W-8 (or any successor form), properly completed and duly executed
         by such Lender, together with any other form, certificate or statement
         of exemption required under the Internal Revenue Code or the
         regulations issued thereunder, in each case establishing that such
         Lender is not subject to any deduction or withholding of United States
         federal income tax with respect to any payments to such Lender of
         interest payable under any of the Term Loan Documents; provided,
         however, that if a Non-U.S. Lender is an entity that is not a
         corporation for U.S. federal income tax purposes, such Non-U.S. Lender
         agrees, for purposes of clause (X) or (Y) of this subsection
         2.7B(iii)(a), to take any actions necessary, and to deliver all
         additional (or alternative) Internal Revenue Service forms necessary to
         establish in accordance with the Internal Revenue Code and the Treasury
         Regulations promulgated thereunder that such Non-U.S. Lender is not
         subject to any deduction or withholding of United States federal income
         tax with respect to any payments to such Lender of principal, interest,
         fees or other amounts payable under any of the Loan Documents
         (including causing its partners, members, beneficiaries or owners, and
         their beneficial owners, to take any actions and deliver any forms
         necessary to establish such exemption).

                  (b) Each Lender required to deliver any forms, certificates or
         other evidence with respect to United States federal income tax
         withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
         from time to time after the initial

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         delivery by such Lender of such forms, certificates or other evidence,
         whenever a lapse in time or change in circumstances renders such forms,
         certificates or other evidence obsolete or inaccurate in any material
         respect, that such Lender shall (1) promptly deliver to Administrative
         Agent and Company, two new original copies of Internal Revenue Service
         Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two
         original copies of the appropriate Internal Revenue Service Form W-8,
         as the case may be, and any such other or additional Internal Revenue
         Service forms required to be delivered pursuant to the proviso of
         subsection 2.7B(iii)(a) properly completed and duly executed by such
         Lender, together with any other form, certificate or statement of
         exemption confirming or establishing that such Lender is not subject to
         any deduction or withholding of United States federal income tax with
         respect to payments to such Lender under the Term Loan Documents
         (provided that in the case of a new form or certificate to be provided
         under this section 2.7B(iii)(b)(1) due to a lapse in time, Company
         shall have first notified the Lender and Administrative Agent in
         writing at least 60 days prior to the expiration of such obsolete form
         or certificate that such Lender will be required to comply with such
         requirements) or (2) notify Administrative Agent and Company of its
         inability to deliver any such forms, certificates or other evidence.

                  (c) Company shall not be required to pay any additional amount
         to any Lender in respect of any Covered Tax under clause (c) of
         subsection 2.7B(ii) or clause (i) of subsection 2.7A or make any
         payments pursuant to subsection 2.7C, (x) in the case of a Non-U.S.
         Lender, if (1) such Lender shall have failed to satisfy the
         requirements of clause (a) or (b) of this subsection 2.7B(iii) and such
         Covered Tax would not have been required to be imposed, deducted or
         withheld but for such failure or (2) to the extent such amount results
         from any Lender being treated as a "conduit entity" within the meaning
         of Treasury Regulation Section 1.881-3 or any successor provision
         thereto or (y) in the case of any Lender, to the extent that such
         Covered Tax would not have been required to be imposed, deducted or
         withheld but for the failure of such Lender to comply with any
         certification, information or other reporting requirement as to
         nationality, residence or identity of such Lender which requirement
         such Lender would otherwise be able to comply with on the date
         requested by Company, provided that at least 60 days prior to the first
         payment date with respect to which Company shall apply this clause (y),
         Company shall have notified such Lender, in writing, that such Lender
         will be required to comply with such certification, information or
         other reporting requirement and provided further that such compliance
         is expressly required by law, statute, treaty, ruling regulation or
         administrative practice of jurisdiction imposing such Covered Tax as a
         necessary precondition to reduction in the rate of, or exemption from,
         such Covered Tax; provided that, if any Lender shall have satisfied the
         requirements of subsection 2.7B(iii) on the Closing Date (in the case
         of each Lender listed on the signature pages hereof) or on the date of
         the Assignment Agreement pursuant to which it became a Lender or the
         date of request by Company (in the case of each other Lender) and
         thereafter the requirements of subsection 2.7B(iii)(b), nothing in this
         subsection 2.7B(iii)(c) shall relieve Company of its obligation to pay
         any additional amounts pursuant to clause (c) of subsection 2.7B(ii) in
         the event that, as a result of any Change in Law occurring after the
         date hereof (in the case of each Lender listed on the signature pages
         hereof) or after the date of the Assignment Agreement pursuant to which
         such Lender becomes a Lender (in the case of each other Lender), such
         Lender is no longer

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<PAGE>

               properly entitled to deliver any forms, certificates, statements
               or other evidence at a subsequent date establishing the fact that
               such Lender is not subject to withholding as described in
               subsection 2.7B(iii)(a).

                  C. Indemnification By Borrower. Subject to subsection
         2.7B(iii)(c), Company shall indemnify Administrative Agent and each
         Lender, within 10 days after written demand therefor, for the full
         amount of any Covered Taxes imposed with respect to this Agreement or
         any obligations of such Lender or Administrative Agent hereunder or any
         payments to such Lender (or its applicable lending office) or
         Administrative Agent hereunder (including Covered Taxes imposed or
         asserted on or attributable to amounts payable under this Section) that
         are paid by Administrative Agent or such Lender, as the case may be,
         and any penalties, interest and reasonable expenses arising therefrom
         or with respect thereto, whether or not such Covered Taxes were
         correctly or legally imposed or asserted by the relevant Governmental
         Authority. A certificate as to the amount of such payment or liability
         delivered to Company by a Lender, or by Administrative Agent on its own
         behalf or on behalf of a Lender, shall be conclusive absent manifest
         error.

                  D. Incorrectly Assessed Taxes. Upon the reasonable request of
         Company, each Lender shall use reasonable efforts to cooperate with
         Company with a view to obtain a refund of any indemnified Taxes or
         other Taxes which were not correctly or legally imposed or asserted by
         the relevant Governmental Authority and for which Company has
         indemnified such Lender under this subsection 2.7 and, to the extent
         any such refund is paid to or to the account of such Lender, such
         Lender shall promptly refund such amount to Company.

                  E. Capital Adequacy Adjustment. If any Lender shall have
         reasonably determined that the adoption, effectiveness, phase-in or
         applicability after the date hereof of any law, rule or regulation (or
         any provision thereof) regarding capital adequacy, or any change
         therein or in the interpretation or administration thereof by any
         Governmental Authority, central bank or comparable agency charged with
         the interpretation or administration thereof, or compliance by any
         Lender (or its applicable lending office) with any guideline, request
         or directive regarding capital adequacy (whether or not having the
         force of law) of any such Governmental Authority, central bank or
         comparable agency, has or would have the effect of reducing the rate of
         return on the capital of such Lender or any corporation controlling
         such Lender as a consequence of, or with reference to, such Lender's
         Loans or other obligations hereunder with respect to the Loans, in the
         case of any Lender to a level below that which such Lender or such
         controlling corporation could have achieved but for such adoption,
         effectiveness, phase-in, applicability, change or compliance (taking
         into consideration the policies of such Lender or such controlling
         corporation with regard to capital adequacy), then from time to time,
         within five Business Days after receipt by Company from such Lender of
         the officer's certificate referred to in the next sentence, Company
         shall pay to such Lender such additional amount or amounts as will
         compensate such Lender or such controlling corporation on an after-tax
         basis for such reduction. Such Lender shall deliver to Company (with a
         copy to Administrative Agent) an officer's certificate, setting forth
         in reasonable detail the basis of the calculation of such additional
         amounts, which statement shall be conclusive and binding upon all
         parties hereto absent manifest error.

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<PAGE>

                  2.8 OBLIGATION OF LENDERS TO MITIGATE.

                  Each Lender agrees that, as promptly as practicable after the
officer of such Lender or Issuing Lender responsible for administering the Loans
of such Lender, becomes aware of the occurrence of an event or the existence of
a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive any payments under subsection 2.7, it will,
to the extent not inconsistent with the internal policies of such Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i) to make,
issue, fund or maintain the affected Loans of such Lender through another
lending office of such Lender, or (ii) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances that would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts that would otherwise be required to be paid to such Lender or Issuing
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Loans through such other lending office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Loans or the interests of such Lender; provided that such
Lender will not be obligated to utilize such other lending office pursuant to
this subsection 2.8 unless Company agrees to pay all incremental expenses
incurred by such Lender as a result of utilizing such other lending as described
in clause (i) above. An officer's certificate as to the amount of any such
expenses payable by Company pursuant to this subsection 2.8 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.

                  If any such Lender does not make, issue, fund or maintain such
Loans through such other lending office or take such other measures, as the case
may be, then Company shall have the right, but not the obligation, upon notice
to such Lender and Administrative Agent, either to terminate such Lender's
Restructured Term Loan Commitment and prepay (without premium or penalty) the
then outstanding Loans, together with all unpaid interest and fees in respect
thereof, and all other Obligations owed to such Lender or to cause such Lender
to transfer and assign (without representation or warranty) the then outstanding
Loans and other Obligations owed to such Lender at a purchase price that is no
less than the aggregate amount of such Lender's Loans, together with all accrued
and unpaid interest and fees in respect thereof, plus all other Obligations,
owing to such Lender, to an Eligible Assignee, in accordance with the provisions
of subsection 10.1B(i) and (ii), that is able to make, issue, fund and maintain
such Loans through a lending office that will avoid the need for, or minimize
the amount of, additional amounts or other payments which would otherwise be
required to be paid by Company under subsection 2.7.

SECTION 3. [INTENTIONALLY OMITTED]

SECTION 4. CONDITIONS TO LOANS

                  The obligations of Lenders to make Loans are subject to the
satisfaction of the following conditions.

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<PAGE>

                  4.1 CONDITIONS TO RESTRUCTURED TERM LOANS.

                  The obligations of Lenders to make the Restructured Term Loans
are, in addition to the conditions precedent specified in subsection 4.3,
subject to prior or concurrent satisfaction of the following conditions:

                  A. Loan Party Documents. On or before the Closing Date,
Company shall have delivered and shall have caused each other Loan Party to
deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to Company or such Loan Party, as the case may be,
each, unless otherwise noted, dated the Closing Date:

                  (i) Certified copies of the constating documents of such
Person, together, except as set forth on Schedule 4.1A(i), with a good standing
certificate (or equivalent thereto) from its jurisdiction of organization and,
except where failure to be in good standing, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, each
other state or province in which it is qualified as a foreign organization to do
business and, except where failure to be in good standing, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each dated a recent date prior to the Closing Date;

                  (ii) Copies of the Bylaws or limited liability company
agreement of such Person, as applicable, certified as of the Closing Date by its
secretary or an assistant secretary;

                  (iii) Resolutions of the Board of Directors or members of such
Person approving and authorizing the execution, delivery and performance of the
Term Loan Documents to which it is a party, certified as of the Closing Date by
its secretary or an assistant secretary as being in full force and effect
without modification or amendment;

                  (iv) Signature and incumbency certificates of the officers of
such Person executing this Agreement and the other Term Loan Documents to which
it is a party;

                  (v) Executed originals of this Agreement, the Restructured
Term Notes (duly executed in accordance with subsection 2.1E, drawn to the order
of each applicable Lender and with appropriate insertions) and the other Term
Loan Documents to which such Person is a party; and

                  (vi) Such other documents as Administrative Agent may
reasonably request.

                  B. Organizational and Capital Structure, Ownership,
Management, Etc.

                  (i) Capital Structure and Ownership. The capital and tax
structure and ownership of Company and its Subsidiaries, before and after giving
effect to the effectiveness of the Plan of Reorganization and the CCAA Plan of
Arrangement, shall be as set forth on Schedule 4.1B(i) annexed hereto. After
giving effect to the effectiveness of the Plan of Reorganization

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<PAGE>

and the CCAA Plan of Arrangement, (a) the Sponsors shall beneficially own 100%
of the voting stock of the Company and (b) on the Closing Date Company shall
beneficially own 100% of the equity interests of Cineplex Odeon.

                      (ii) Management; Employment Contracts. The management
structure of Company after giving effect to the effectiveness of the Plan of
Reorganization shall be as set forth on Schedule 4.1B(ii) annexed hereto (except
to the extent that any members of senior management voluntarily decide not to
continue their employment with Company), and Administrative Agent shall have
received copies of, and shall be reasonably satisfied with the form and
substance of, any and all employment contracts with senior management of each of
Company and its Subsidiaries.

                  C. Necessary Consents. Company shall have obtained all
Governmental Authorizations and consents of other Persons, in each case that are
necessary or advisable in connection with the effectiveness of the Plan of
Reorganization or the CCAA Plan of Arrangement, as the case may be, the
transactions contemplated by the Term Loan Documents and the continued operation
of the business conducted by Company and its Subsidiaries in substantially the
same manner as conducted prior to the effectiveness of either of the Plan of
Reorganization and the CCAA Plan of Arrangement, and each of the foregoing shall
be in full force and effect. All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the
effectiveness of the Plan of Reorganization or the CCAA Plan of Arrangement, as
the case may be, or the financing thereof, and no action, request for stay,
petition for review or rehearing, reconsideration or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
Company shall have delivered an Officer's Certificate in form and substance
reasonably satisfactory to Administrative Agent confirming the foregoing matters
and any other evidence requested by Administrative Agent in support thereof.

                  D. Plan of Reorganization; Confirmation Order; Discharge of
Pre-Petition Credit Agreement, DIP Credit Agreement and Intercompany Debt.

                      (i) The Plan of Reorganization shall have been approved by
the creditors of Company and the Subsidiary Debtors and confirmed by the
Bankruptcy Court pursuant to the Confirmation Order. The Confirmation Order
shall (a) have been entered by the Bankruptcy Court and (b) grant Second
Priority Liens in the Collateral and the Closing Date Mortgaged Properties
securing the Obligations in favor of the Collateral Agent for the benefit of the
Lenders. There shall have been no determination that Company, the Subsidiary
Debtors or Sponsors did not solicit approvals of the Plan of Reorganization in
good faith pursuant to Section 1125(e) of the Bankruptcy Code. The Confirmation
Order shall be in full force and effect and shall not have been reversed,
modified, amended or stayed pending any appeal, and at least eleven days shall
have elapsed since the entry of the Confirmation Order.

                      (ii) The Plan of Reorganization and the CCAA Plan of
Arrangement shall have become simultaneously effective in accordance with their
respective terms no later than March 31, 2002 and shall have been substantially
consummated.

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<PAGE>

                      (iii) (a) Indebtedness under the Pre-Petition Credit
Agreement shall be satisfied by application of the Restructured Term Loans
hereunder and the issuance of equity of Company to Sponsors, (b) all Existing
Letters of Credit issued thereunder shall be deemed issued under the Priority
Secured Credit Agreement, (c) commitments to lend and make other extensions of
credit thereunder shall be terminated, (d) Liens securing Indebtedness and the
other obligations thereunder shall be terminated and (e) all documents or
instruments necessary to release and evidence the release of all Liens
thereunder shall be delivered to Collateral Agent.

                      (iv) (a) Indebtedness under the Post-Default Advances
Sublimit under the DIP Credit Agreement shall be satisfied by application of
Restructured Term Loans hereunder and the issuance of equity to the Sponsors,
(b) all Existing Letters of Credit issued thereunder shall be deemed issued
under the Priority Secured Credit Agreement, (c) all other Indebtedness
thereunder shall have been repaid in full in cash, (d) commitments to lend and
make other extensions of credit thereunder shall be terminated and (e) all
documents or instruments necessary to release and evidence the release of all
Liens thereunder shall be delivered to Collateral Agent.

                      (v) All Indebtedness of Company to any of its Wholly Owned
Subsidiaries and all Indebtedness of each Wholly Owned Subsidiary of Company to
Company or any other Wholly Owned Subsidiary of Company shall have been
cancelled pursuant to the Plan of Reorganization, and such cancellation shall be
further evidenced by a payoff letter in form and substance satisfactory to
Administrative Agent.

                  E. CCAA Proceedings; Canadian CCAA Credit Agreement.

                      (i) The CCAA Plan of Arrangement shall (a) have been
approved by the creditors of Cineplex Odeon and sanctioned by the Canadian Court
and (b) consummated to the satisfaction of Administrative Agent. The aggregate
amount of Cash used to pay allowed claims of Persons that are not Affiliates of
Cineplex Odeon under the CCAA Plan of Arrangement shall not exceed $30,000,000.

                      (ii) Cineplex Odeon shall have (a) repaid in full all
Indebtedness outstanding under the Canadian CCAA Credit Agreement, (b)
terminated any commitments to lend or make other extensions of credit thereunder
and delivered to Administrative Agent all documents and instruments necessary or
advisable to evidence such termination, in form and substance satisfactory to
Administrative Agent, (c) released all Liens securing Indebtedness or other
obligations of Cineplex Odeon and its Subsidiaries thereunder and delivered to
Administrative Agent all documents and instruments necessary or advisable to
evidence such release, in form and substance satisfactory to Administrative
Agent, and (d) made arrangements satisfactory to Administrative Agent with
respect to the cancellation of any letters of credit outstanding thereunder or
the issuance of letters of credit under the Priority Secured Credit Agreement to
support the obligations of Company and its Subsidiaries with respect thereto.

                  F. Closing Date Leverage Ratio. Administrative Agent shall
have received an Officer's Certificate reasonably satisfactory to it setting
forth the Leverage Ratio as of the Closing Date, based on the preliminary
February 28, 2002 financial statements and after giving effect to the
effectiveness of the Plan of Reorganization and the CCAA Plan of Arrangement.

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<PAGE>

                  G. Closing Date Mortgages; Closing Date Mortgage Policies;
Etc. Collateral Agent shall have received from Company and each applicable
Subsidiary Guarantor:

                      (i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "CLOSING DATE MORTGAGE" and, collectively, the "CLOSING DATE
MORTGAGES"), duly recorded in all appropriate places in all applicable
jurisdictions, encumbering each fee or leasehold Real Property Asset listed in
Schedule 4.1G annexed hereto (each of the foregoing a "CLOSING DATE MORTGAGED
PROPERTY" and, collectively, the "CLOSING DATE MORTGAGED PROPERTIES");

                      (ii) Opinions of Local Counsel. An opinion of counsel
(which counsel shall be reasonably satisfactory to Collateral Agent) in each
jurisdiction in which a Closing Date Mortgaged Property is located with respect
to the enforceability of the form(s) of Closing Date Mortgages to be recorded in
such jurisdiction and such other matters as Collateral Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Collateral Agent;

                      (iii) Landlord Consents and Estoppels; Recorded Leasehold
Interests. In the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property located in the United States, the lessor of which has filed
an objection to the confirmation of the Plan of Reorganization, and in the case
of each Closing Date Mortgaged Property consisting of a Leasehold Property
located in Canada, a landlord consent and estoppel with respect thereto in form
and substance satisfactory to Administrative Agent and evidence that such
Leasehold Property is a Recorded Leasehold Interest;

                      (iv) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property is a
Flood Hazard Property located in the United States and (2) the community in
which any such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification from
Collateral Agent (1) as to the existence of each such Flood Hazard Property and
(2) as to whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program, and (c) in the
event any such Flood Hazard Property is located in a community that participates
in the National Flood Insurance Program, evidence that such Loan Party has
obtained flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of the
Federal Reserve System; and

                      (v) Environmental Indemnity. An environmental indemnity
agreement, satisfactory in form and substance to Collateral Agent and its
counsel, with respect to the indemnification of Collateral Agent and Lenders for
any liabilities that may be imposed on or incurred by any of them as a result of
any Hazardous Materials.

                  H. Security Interests in Personal Property. Collateral Agent
shall have received evidence satisfactory to it that Company and Subsidiary
Guarantors have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such

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<PAGE>

agreements, documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of items described in
clauses (iii) and (iv) below) that may be necessary or, in the opinion of
Collateral Agent, desirable to create in favor of Collateral Agent, for the
benefit of Lenders, a valid and (upon such filing and recording) perfected
Second Priority security interest in the entire personal and mixed property
Collateral. Such actions shall include the following:

                      (i) Schedules to Collateral Documents. Delivery to
Collateral Agent of accurate and complete schedules to all of the applicable
Collateral Documents;

                      (ii) Stock Certificates and Instruments. Delivery to
Collateral Agent of (a) certificates, if any, (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Collateral Agent) representing
all of the capital stock pledged pursuant to the Security Agreement and (b) all
promissory notes or other instruments (duly endorsed, where appropriate, in a
manner satisfactory to Collateral Agent) evidencing any Collateral;

                      (iii) Lien Searches; UCC and PPSA Termination Statements.
Delivery to Collateral Agent of (a) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing statements and
fixture filings, PPSA registrations and all other similar filings, recordings
and registrations and all judgment and Tax lien filings which may have been made
with respect to any personal or mixed property of any Loan Party, together with
copies of all such filings disclosed by such search and (b) UCC termination
statements duly executed by all applicable Persons and financing change
statements or other similar releases and discharges for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements or fixture filings, PPSA registrations and all other similar filings,
recordings and registrations disclosed in such search (other than any such
financing statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement);

                      (iv) UCC and PPSA Financing Statements and Fixture
Filings. (a) Delivery to Collateral Agent of UCC financing statements and, where
appropriate, fixture filings with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as may be
necessary or, in the opinion of Collateral Agent, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents and (b) registration of personal property financing statements and all
similar filings, recordings and registrations in each jurisdiction in Canada in
which Company or any of its Subsidiaries (including Cineplex Odeon and its
Subsidiaries) carries on business or in which any assets of such Person are
located with respect to all personal property of such Person as may be necessary
or, in the opinion of Collateral Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral Documents;

                      (v) PTO Cover Sheets, Etc. (a) Delivery to Collateral
Agent of all cover sheets or other documents or instruments required to be filed
with the United States Patent and Trademark Office to create or perfect Liens in
respect of any Intellectual Property Collateral and (b) delivery to Collateral
Agent of such information as may be necessary to create or perfect

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<PAGE>
Liens in Canada in respect of any Intellectual Property Collateral with the
Canadian Intellectual Property Office; and

                      (vi) Opinions of Counsel. Delivery to Collateral Agent of
an opinion of counsel (which counsel shall be reasonably satisfactory to
Collateral Agent) under the laws of each jurisdiction in which any Loan Party is
organized with respect to the creation and perfection of the security interests
in favor of Collateral Agent in such Collateral and such other matters governed
by the laws of such jurisdiction regarding such security interests as Collateral
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Collateral Agent.

                  I. Opinions of Company's Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of (i)
Fried, Frank, Harris, Shriver & Jacobson, counsel for the Loan Parties, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
dated as of the Closing Date and setting forth substantially the matters in the
opinions designated in Exhibit VI-A annexed hereto and as to such other matters
as Administrative Agent acting on behalf of Lenders may reasonably request, and
(ii) Davies, Ward, Phillip & Vineberg LLP, Canadian counsel for the Company, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit VI-B annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.

                  J. Opinions of O'Melveny & Myers LLP. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, dated as of the Closing Date, substantially in the form
of Exhibit VII annexed hereto and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request.

                  K. Evidence of Insurance. Company shall have delivered to
Administrative Agent an Officer's Certificate in form and substance reasonably
satisfactory to Administrative Agent certifying as to an attached schedule
setting forth each casualty, liability and business interruption insurance
policy maintained by Company and its Subsidiaries, the expiration date of each
such insurance policy, the amount of insurance coverage provided pursuant to
each such policy, any applicable deductibles and any other information
reasonably requested by the Administrative Agent with respect to such insurance
policies. Collateral Agent shall have received a certificate from Company's
insurance broker or other evidence satisfactory to it that all insurance
required to be maintained pursuant to subsection 6.4 is in full force and effect
and that Collateral Agent on behalf of the Lenders and the Priority Secured
Lenders has been named as additional insured and/or loss payee thereunder to the
extent required under subsection 6.4.

                  L. Fees. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.

                  M. Priority Secured Credit Agreement. All conditions to the
making of the initial Priority Secured Loans under the Priority Secured Credit
Agreement shall have been satisfied or waived and such initial Priority Secured
Loans shall have been made.

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                  N. Payment of Certain Amounts. Company shall have paid

                      (i) all adequate protection payments to which Lenders are
entitled pursuant to the final borrowing order entered by the Bankruptcy Court
on April 4, 2001 for the period ending on the Closing Date; and

                      (ii) all accrued but unpaid administrative agent's fees
and letter of credit fees under the Pre-Petition Credit Agreement and the DIP
Credit Agreement.

                  O. Representations and Warranties; Performance of Agreements.
Company shall have delivered to Administrative Agent an Officers' Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 hereof are true, correct and
complete on and as of the Closing Date (after giving effect to the effectiveness
of the Plan of Reorganization and the CCAA Plan of Arrangement) to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete on and as of such
earlier date) and that Company shall have performed in all material respects all
agreements and satisfied all conditions that this Agreement provides shall be
performed or satisfied by it on or before the Closing Date except as otherwise
disclosed to and agreed to in writing by Administrative Agent.

                  P. Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.

                  Q. Estimate of Company-Funded Unsecured Settlement Amount.
Company shall have delivered to Administrative Agent on the Closing Date an
Officer's Certificate setting forth a good faith estimate of the Company-Funded
Unsecured Settlement Amount and each amount described in the definition of
Company-Funded Unsecured Settlement Amount, all in a level of detail and
otherwise in form and substance satisfactory to Administrative Agent.

                  R. Cash Contribution; Unsecured Settlement Distribution.

                      (i) [Intentionally Omitted].

                      (ii) The Sponsors shall have purchased for cash common
equity of Company, to fund the Unsecured Settlement Distribution (as defined in
the Plan of Reorganization) in accordance with the Plan of Reorganization, in an
amount not less than the difference between (a) $45,000,000 and (b) the
Company-Funded Unsecured Settlement Amount; provided that, notwithstanding
anything to the contrary contained herein, the Company-Funded Unsecured
Settlement Amount shall not exceed 80% of the amount of cash common equity
contributed by the Sponsors to Company to fund the Unsecured Settlement
Distribution.

                      (iii) Company shall have paid the Unsecured Settlement
Distribution (as defined in the Plan of Reorganization) in accordance with the
Plan of Reorganization.

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                      (iv) Company shall have delivered to Administrative Agent
on the Closing Date an Officer's Certificate certifying that the conditions in
subsections 4.1R(ii) and (iii) have been satisfied.

                  S. No Material Adverse Change. Since August 31, 2001, there
shall have occurred no material adverse change in the business, operations,
properties, assets, liabilities, condition (financial or otherwise) or prospects
of Company and its Subsidiaries, taken as a whole, other than as set forth in
the Plan of Reorganization or the CCAA Plan of Arrangement, determined by the
Administrative Agent in its sole discretion.

                  T. No Litigation. On the Closing Date, there shall not be any
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental instrumentality that purports
to affect the Plan of Reorganization, the CCAA Plan of Arrangement, any of the
Priority Secured Loan Documents (as defined in the Priority Secured Credit
Agreement) or any of the Term Loan Documents that could reasonably be expected
to have a material adverse effect on the Plan of Reorganization, the CCAA Plan
of Arrangement, any of the Priority Secured Loan Documents, any of the Term Loan
Documents or any of the other transactions contemplated hereby or on the
business, assets, liabilities, results of operations, condition (financial or
otherwise), properties or prospects of Company and its Subsidiaries, taken as a
whole.

                  U. Delivery of Financial Information. Company shall have
delivered financial information, budgets and projections regarding the
confirmation of the Plan of Reorganization and the CCAA Plan of Arrangement and
the reorganization of Company and Cineplex Odeon in form and substance
satisfactory to Administrative Agent; provided that Administrative Agent
acknowledges and agrees that such financial information, budgets and projections
shall be prepared consistent with the methodology set forth on Schedule 4.1U.

                  V. Merger of Merged Subsidiaries. Company shall have filed or
caused to be filed with the appropriate office of each applicable state all
documents and certificates necessary to cause the merger of each Merged
Subsidiary with and into the Wholly Owned North American Subsidiary of Company
shown opposite its name on Schedule 5.21.

                  4.2 CONDITIONS TO SUPPLEMENTAL TERM LOANS.

                  The obligations of the Lenders making Supplemental Term Loans
to make Supplemental Term Loans shall be, in addition to the conditions
precedent specified in subsection 4.3, subject to prior or concurrent
satisfaction of each condition agreed to by Company, all Lenders making
Supplemental Term Loans and Administrative Agent in writing prior to the Funding
Date for such Supplemental Term Loans.

                  4.3 CONDITIONS TO ALL LOANS.

                  The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:

                  A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing,

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in each case signed by the chief executive officer, the chief financial officer
or the treasurer of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent.

                  B. As of that Funding Date:

                      (i) The representations and warranties contained herein
and in the other Term Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;

                      (ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by such Notice
of Borrowing that would constitute an Event of Default or a Potential Event of
Default;

                      (iii) Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that Funding Date;

                      (iv) No order, judgment or decree of any court, arbitrator
or Governmental Authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date; and

                      (v) The making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System.

SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES

                  In order to induce Lenders to enter into this Agreement and to
make the Loans, Company represents and warrants to each Lender, on the date of
this Agreement and, except as otherwise provided, on each Funding Date, that the
following statements are true, correct and complete:

                   5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS AND SUBSIDIARIES.

                  A. Organization and Powers. Each Loan Party is an organization
duly organized, validly existing and, except as set forth on Schedule 5.1A, in
good standing under the laws of its jurisdiction of organization. Each Loan
Party has all requisite corporate or limited liability company power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Term Loan Documents
to which it is a party and to carry out the transactions contemplated hereby and
thereby and, in the case of Company, to issue and pay the Notes.

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<PAGE>

                  B. Qualification and Good Standing. Each Loan Party is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect.

                  C. Conduct of Business. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.12.

                  D. Subsidiaries. All of the Subsidiaries of Company are
identified in Schedule 5.1D annexed hereto, as said Schedule 5.1D may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvii). The capital stock or limited liability company interests of Company
and of each of the Subsidiaries of Company identified in Schedule 5.1D annexed
hereto (as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock or limited liability company
interests constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 5.1D annexed hereto (as so supplemented) is a corporation
or limited liability company duly organized, validly existing and, except as set
forth in Schedule 5.1D annexed hereto, in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
corporate or limited liability company power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate or limited liability
company power and authority has not had and will not have a Material Adverse
Effect. Schedule 5.1D annexed hereto (as so supplemented) correctly sets forth
the ownership interest of Company and each of its Subsidiaries in each of the
Subsidiaries of Company identified therein. The capital and ownership structure
of Company and its Subsidiaries, both before and after giving effect to the
effectiveness of the Plan of Reorganization and the CCAA Plan of Arrangement and
the related transactions contemplated in connection therewith, are as set forth
on Schedule 4.1B(i) annexed hereto.

                  5.2 AUTHORIZATION OF BORROWING, ETC.

                  A. Authorization of Borrowing. The execution, delivery and
performance of each Term Loan Document have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.

                  B. No Conflict. The execution, delivery and performance by any
Loan Party of the Term Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Term Loan Documents do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to any Loan Party, the constating documents, bylaws or any
shareholders agreement of any Loan Party or any order, judgment or decree of any
court or other agency of government binding on any Loan Party, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of any Loan Party, except for
such conflicts, breaches or defaults that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any of the

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properties or assets of any Loan Party (other than any Liens created under any
of the Term Loan Documents in favor of Collateral Agent on behalf of Lenders),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of any Loan Party, except for such
approvals or consents that will be obtained on or before the Closing Date and
such approvals or consents the failure of which to obtain, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

                  C. Governmental Consents. The execution, delivery and
performance by any Loan Party of the Term Loan Documents to which it is a party,
the issuance, delivery and payment of the Notes and the consummation of the
transactions contemplated by the Term Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state, provincial or other Governmental Authority or
regulatory body, except for (i) filings required by federal or state securities
laws, (ii) such other registrations, consents, approvals, notices or other
actions which have been made, obtained, given or taken on or before the Closing
Date and (iii) such other filings the failure of which to make, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

                  D. Binding Obligation. Each of the Term Loan Documents has
been duly executed and delivered by each Loan Party that is a party thereto and
is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

                  5.3 FINANCIAL CONDITION.

                  Company has heretofore delivered to Lenders, at Lenders'
request, (i) audited financial statements of Company and its Subsidiaries for
Fiscal Year ending February 28, 2001, consisting of a balance sheet and the
related consolidated statements of operations, stockholders' equity and cash
flows for such Fiscal Year, and (ii) unaudited, condensed, combined,
consolidated financial statements of Company and its Subsidiaries for the eleven
months ended January 31, 2002, consisting of a balance sheet and related
statements of operations and cash flow. All such statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position (on a consolidated basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated basis) of the entities described therein for each
of the periods then ended, subject, in the case of any such unaudited financial
statements, to the changes resulting from audit and normal year-end adjustments
and absence of footnotes. None of the Loan Parties has (and none of the Loan
Parties will have following the making of the Restructured Term Loans) any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is required by GAAP to be,
but is not, or to the extent not required by GAAP which is known to or
reasonably should be known to Company, but is not, reflected in the foregoing
financial statements or the most recent financial statements delivered pursuant
to subsection 6.1 or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Subsidiaries, taken as a whole.

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<PAGE>

                  5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.

                  Since February 28, 2001, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Except as set forth on Schedule 5.4, since February 28, 2001,
neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.

                  5.5 TITLE TO PROPERTIES; LIENS.

                  Company and each of its Subsidiaries have (i) good and
indefeasible title to (in the case of fee interests in real property), (ii)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7. All
such properties and assets are free and clear of Liens other than Liens
permitted under subsection 7.2A.

                  5.6 LITIGATION; ADVERSE FACTS.

                  Except as described in Schedule 5.6, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of Company's Subsidiaries) at law or in
equity or before or by any federal, state, provincial, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, pending or, to the knowledge of Company, threatened against
or affecting Company or any of Company's Subsidiaries or any property of Company
or any of Company's Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither Company
nor any of Company's Subsidiaries is (i) in violation of any applicable laws
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect or (ii) subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.

                  5.7 PAYMENT OF TAXES.

                  Except to the extent permitted by subsection 6.3, all material
Tax returns and reports of Company and its Subsidiaries required to be filed by
any of them have been timely filed, and all material Taxes, assessments, fees
and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company does not know of any
proposed material Tax assessment against Company or any of its Subsidiaries
which is not being actively contested by Company or such Subsidiary in good
faith and by

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appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.

                  5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS;
MATERIAL CONTRACTS.

                  A. Neither Company nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.

                  B. Neither Company nor any of its Subsidiaries is a party to
or is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.

                  C. All Material Contracts of each of Company and each of its
Subsidiaries are in full force and effect and no defaults currently exist
thereunder, except where the consequences, direct or indirect, of such default
or defaults, if any, would not have a Material Adverse Effect.

                  5.9 GOVERNMENTAL REGULATION.

                  Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.

                  5.10 SECURITIES ACTIVITIES.

                  A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.

                  B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only or of Company
and its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument between Company and any Lender or any Affiliate of any Lender
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.

                  5.11 EMPLOYEE BENEFIT PLANS.

                  A. Company and each of its ERISA Affiliates are in compliance
in all material respects with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder and the terms
of each Employee Benefit Plan, and have performed all their material obligations
under each Employee Benefit Plan, except where such

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<PAGE>

noncompliance or nonperformance would not reasonably be expected to have a
Material Adverse Effect.

                  B. No ERISA Event has occurred or is reasonably expected to
occur which would reasonably be expected to have a Material Adverse Effect.

                  C. Except to the extent required under Section 4980B of the
Internal Revenue Code or as disclosed on Schedule 5.11(c) annexed hereto, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employees of Company or any
of its ERISA Affiliates.

                  D. In accordance with the most recent actuarial valuation for
any Pension Plan, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), does not exceed $15,000,000.

                  E. The Canadian Pension Plans are duly registered under the
Income Tax Act (Canada), as amended, and any successor thereto, and any
regulations promulgated thereunder, as in effect on the Closing Date and all
other applicable laws which require registration and no event has occurred which
is reasonably likely to cause the loss of such registered status. All material
obligations of Cineplex Odeon, Company and its Subsidiaries (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with the Canadian Pension Plans and the funding
agreements therefor have been performed in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian Pension Plans
or the Canadian Benefit Plans. There are no outstanding disputes concerning the
assets of the Canadian Pension Plans or the Canadian Benefit Plans. Each of the
Canadian Pension Plans is fully funded both on an ongoing basis and on a
solvency basis (using actuarial methods and assumptions which are consistent
with the valuations last filed with the applicable governmental authorities and
which are consistent with generally accepted actuarial principles).

                  5.12 CERTAIN FEES.

                  Except as set forth in Schedule 5.12 annexed hereto, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.

                  5.13 ENVIRONMENTAL PROTECTION.

                  Except as set forth in Schedule 5.13 annexed hereto:

                      (i) the operations of Company and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in the
Facilities) comply with all

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Environmental Laws except for any such noncompliance which would not reasonably
be expected to have a Material Adverse Effect;

                      (ii) Company and each of its Subsidiaries have obtained
all Governmental Authorizations under Environmental Laws necessary to conduct
their respective operations, and all such Governmental Authorizations are being
maintained in good standing, and Company and each of its Subsidiaries are in
compliance with such Governmental Authorizations except for any such failure to
obtain, maintain or comply which would not reasonably be expected to have a
Material Adverse Effect;

                      (iii) neither Company nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be liable to
any Person as a result of or in connection with any Hazardous Materials or (b)
any letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9604)
or comparable state laws, and, to the best of Company's knowledge, none of the
operations of Company or any of its Subsidiaries is the subject of any federal
or state investigation relating to or in connection with any Hazardous Materials
at any Facility or at any other location except for such of the foregoing which
would not reasonably be expected to have a Material Adverse Effect;

                      (iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative proceeding alleging
the violation of or liability under any Environmental Laws which if adversely
determined could reasonably be expected to have a Material Adverse Effect;

                      (v) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any outstanding written
order or agreement with any Governmental Authority or private party relating to
(a) any actual or potential violation of or liability under Environmental Laws
or (b) any Environmental Claims except for such of the foregoing which would not
reasonably be expected to have a Material Adverse Effect;

                      (vi) neither Company nor any of its Subsidiaries has any
contingent liability in connection with any Release of any Hazardous Materials
by Company or any of its Subsidiaries except for such of the foregoing which
would not reasonably be expected to have a Material Adverse Effect;

                      (vii) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or
present treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent, except for such of the foregoing
which could not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;

                      (viii) no Hazardous Materials exist on, under or about any
Facility in a manner that would reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect, and neither Company nor
any of its Subsidiaries has filed any notice or

                                       78
<PAGE>

report of a Release of any Hazardous Materials that would reasonably be expected
to give rise to an Environmental Claim having a Material Adverse Effect;

                      (ix) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any of their respective predecessors has disposed
of any Hazardous Materials in a manner that would reasonably be expected to give
rise to an Environmental Claim having a Material Adverse Effect;

                      (x) to the best knowledge of Company, no underground
storage tanks or surface impoundments are on or at any Facility, except which
underground storage tanks or surface impoundments could not reasonably be
expected to result in a Material Adverse Effect; and

                      (xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been attached to
any Facility except for any such Lien which would not reasonably be expected to
have a Material Adverse Effect.

                  5.14 EMPLOYEE MATTERS.

                  Except as set forth in Schedule 5.14 annexed hereto, there is
no strike or work stoppage in existence or, to the knowledge of Company or any
of its Subsidiaries, threatened involving Company or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect.

                  5.15 SOLVENCY.

                  Each Loan Party is and, upon the incurrence of any Obligations
by such Loan Party on any date on which this representation is made, will be,
Solvent.

                  5.16 DISCLOSURE.

                  No representation or warranty of Company or any of its
Subsidiaries contained in the Plan of Reorganization, the Disclosure Statements,
the CCAA Plan of Arrangement, any Term Loan Document or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results and that such projections are subject to
significant uncertainties and contingencies, many of which are beyond Company's
control, and that no assurance can be given that such projections will be
realized. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to Company (other than matters of a general economic
nature) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect and that have

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not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

                  5.17 MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.

                  A. Plan of Reorganization; Confirmation Order. There have been
no material modifications, amendments, revisions or restatements of the Plan of
Reorganization. All representations and warranties made by Company or any
Subsidiary Debtor in the Plan of Reorganization are accurate, true, correct and
complete in all material respects as of the Closing Date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were accurate, true, correct and complete in all
material respects as of such earlier date). The Confirmation Order has been
entered by the Bankruptcy Court and has not been stayed pending any appeal.

                  B. CCAA Plan of Arrangement; Sanctioning. (i) There have been
no material modifications, amendments, revisions or restatements of the CCAA
Plan of Arrangement, and (ii) the CCAA Plan of Arrangement has been sanctioned
by order of the Canadian Court and such order has not been stayed, varied or
overturned, is not subject to any appeal and remains in full force and effect.

                  5.18 INSURANCE.

                  Company and its Subsidiaries maintain, with financially sound
and reputable insurers, insurance with respect to its properties and business
and the properties and business of its Subsidiaries, against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations all
as determined by the officers of the Company in their reasonable discretion.
Attached as Schedule 5.18 hereto is a complete and accurate description of all
policies of insurance that are in effect for Company and its Subsidiaries.

                  5.19 INTELLECTUAL PROPERTY.

                  A. Company and its Subsidiaries possess all of the trademarks,
tradenames, designs, copyrights, patents and licenses reasonably necessary for
the conduct of their respective businesses. Company and its Subsidiaries own, or
are licensed to use, the Intellectual Property and all such Intellectual
Property is fully protected and duly and properly registered, filed or issued in
the appropriate office and jurisdictions for such registrations, filing or
issuances, except for such filings the failure of which to make, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

                  5.20 CASH MANAGEMENT SYSTEM.

                  The summary of the Cash Management System set forth in
Schedule 6.11 is accurate and complete in all material respects as of the
Closing Date and does not omit to state any material fact necessary to make the
statements set forth therein not misleading. Neither Company nor any of the
Subsidiary Guarantors owns any Deposit Account that is not subject to the Liens
granted under the Security Agreement or the Collateral Account Agreement. There
has

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been no material change to the Cash Management System since the Closing Date
except such changes as have been disclosed to and approved by Administrative
Agent in writing.

                  5.21 MERGED SUBSIDIARIES.

                  On or before the Closing Date, Company has caused each of the
Subsidiaries of Company listed on Schedule 5.21 (each a "MERGED SUBSIDIARY" and
collectively, the "MERGED SUBSIDIARIES") to be merged with and into the Wholly
Owned North American Subsidiary of Company set forth on Schedule 5.21. The total
value of each Merged Subsidiary's assets immediately prior to the effectiveness
of the merger of such Merged Subsidiary with and into the applicable Wholly
Owned North American Subsidiary of Company did not exceed $5,000.

SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS

                  Company covenants and agrees that, so long as any of the
Restructured Term Loan Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations, unless Requisite
Lenders shall otherwise give prior written consent, Company shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
6.

                  6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.

                  Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent:

                      (i) Monthly Financials: as soon as possible and in any
event within 45 days after the end of each month, the consolidated balance sheet
as at the end of such month and the related consolidated statements of income
and cash flows of (x) Company and its Subsidiaries and (y) Company and its
Wholly Owned Subsidiaries for such month, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figure from the Financial Plan for
such Fiscal Year;

                      (ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three Fiscal Quarters,
the consolidated balance sheets of (x) Company and its Subsidiaries and (y)
Company and its Wholly Owned Subsidiaries as at the end of such Fiscal Quarter
and the related consolidated statements of income, stockholders' equity and cash
flows of (x) Company and its Subsidiaries and (y) Company and its Wholly Owned
Subsidiaries for such Fiscal Quarter, and for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Quarter (including
segment information regarding Company's Canadian and international operations in
accordance with GAAP), setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments and the

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absence of footnotes, and (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter;

                      (iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, the consolidated balance
sheets of (x) Company and its Subsidiaries and (y) Company and its Wholly Owned
Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of (x) Company and its
Subsidiaries and (y) Company and its Wholly Owned Subsidiaries for such Fiscal
Year, (including segment information regarding Company's Canadian and
international operations in accordance with GAAP), setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of Company
and its Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) in the case of such consolidated financial
statements of Company and its Subsidiaries, a report thereon of a nationally
recognized independent accounting firm, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of Company and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;

                      (iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of Company
stating that the signers have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its Subsidiaries during
the accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the date of
such Officers' Certificate, of any condition or event that constitutes an Event
of Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance with
such restrictions is required to be tested at the end of the applicable
accounting period;

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                      (v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii), (iii) or
(xiii) of this subsection 6.1 following such change, consolidated financial
statements of Company and its Subsidiaries for (y) the current Fiscal Year to
the effective date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial officer of
Company setting forth the differences (including without limitation any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such change;

                      (vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that their
audit examination has included a review of the terms of this Agreement and the
other Term Loan Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or event that
constitutes an Event of Default or Potential Event of Default with respect to
the covenants set forth in Section 7, has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit examination nothing
has come to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant to
subdivision (iv) above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to clause (b) of
subdivision (iv) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;

                      (vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in connection
with each annual, interim or special audit of the financial statements of
Company and its Subsidiaries made by such accountants, including, without
limitation, any comment letter submitted by such accountants to management in
connection with their annual audit;

                      (viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its security
holders or by any Subsidiary of Company to its security holders other than
Company or another Subsidiary of Company, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar form) and

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prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases and
other statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company or any
of its Subsidiaries;

                      (ix) Events of Default, etc.: promptly upon any
Responsible Officer of Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or becoming
aware that any Lender has given any notice (other than to Administrative Agent)
or taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to Company
or any of its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2, (c) of
any condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on Form 8-K
(Items 1, 2, 4, 5 and 6 of such Form as in effect on the date hereof) if Company
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person and
the nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company have taken, are taking and
propose to take with respect thereto;

                      (x) Litigation or Other Proceedings: (a) promptly upon any
Responsible Officer of Company obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any non-frivolous action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries (collectively, "PROCEEDINGS") not
previously disclosed in writing by Company to Lenders or (2) any material
development in any Proceeding that, in any case:

                           (x) if adversely determined, has a reasonable
     possibility of giving rise to a Material Adverse Effect; or

                           (y) seeks to enjoin or otherwise prevent the
     consummation of, or to recover any damages or obtain relief as a result of,
     the transactions contemplated hereby;

written notice thereof together with such other information as may be reasonably
available to Company to enable Lenders and their counsel to evaluate such
matters; and (b) within twenty days after the end of each Fiscal Quarter, a
schedule of all Proceedings involving an alleged liability of, or claims against
or affecting, Company or any of its Subsidiaries equal to or greater than
$5,000,000 or the Equivalent Amount in any other currency, and promptly after
request by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its counsel
to evaluate any of such Proceedings;

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                      (xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company or any of its ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;

                      (xii) ERISA and Pension Notices: with reasonable
promptness, copies of (a) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by Company or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan; (b) all material
notices received by Company or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; (c) a copy of any notice received by
Company or any of its Subsidiaries that it has failed to deliver to the funding
agent of any Canadian Pension Plan a summary of contributions or that any
contributions have not been paid when due; and (d) such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;

                      (xiii) Financial Plans: as soon as practicable and in any
event no later than 30 days prior to the first day of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the "FINANCIAL
PLAN" for such Fiscal Year), including without limitation (a) a forecasted
consolidated balance sheet and forecasted consolidated statements of income and
cash flows of Company and its Subsidiaries for such Fiscal Year, together with a
pro forma Compliance Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, and (b) budgeted consolidated
statements of income and cash flows of Company and its Subsidiaries for each
month of such Fiscal Year, together with an explanation of the assumptions on
which such forecasts are based;

                      (xiv) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, an Officer's Certificate of Company
attaching a schedule in form and substance reasonably satisfactory to
Administrative Agent outlining all material insurance coverage maintained as of
the date of such Officer's Certificate by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;

                      (xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, with respect to significant environmental matters at
any Facility or which relate to an Environmental Claim in either case which
could reasonably be expected to result in a Material Adverse Effect; provided
that the delivery of such reports would not in the opinion of counsel to Company
adversely affect the availability of any privilege to which it may be entitled
in respect of such audits or reports; provided, further, that Company shall give
Administrative Agent prompt written notice of any audits or reports not
delivered in accordance with the preceding proviso.

                      (xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Company; provided that
delivery of a current SEC Report (to the extent that Company is an SEC
registrant) containing a disclosure of such change

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in the Board of Directors of Company shall be deemed to satisfy the requirements
of this subsection 6.1(xvi).

                      (xvii) New Subsidiaries: promptly upon any Person becoming
a Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company and (b)
all of the data required to be set forth in Schedule 5.1D annexed hereto with
respect to all Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 5.1D annexed hereto for all
purposes of this Agreement);

                      (xviii) Material Contracts: promptly, and in any event
within 10 Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially adverse to
Company or such Subsidiary, as the case may be, or any new Material Contract is
entered into, a written statement describing such event with copies of such
material amendments or new contracts, and an explanation of any actions being
taken with respect thereto; provided that Company shall have no obligation to
deliver such written notice to the extent that disclosure of such event would
not be required to be disclosed in an SEC Report (if Company were an SEC
registrant); and provided further that delivery of an SEC Report (to the extent
that Company is an SEC registrant) containing a disclosure of any such event
shall be deemed to satisfy the requirements of this subsection 6.1(xviii);

                      (xix) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent; and

                      (xx) Joint Venture Financial Statements: within ten days
of Company's receipt thereof, any audited financial statements for any Joint
Venture of Company or any of its Subsidiaries.

                  6.2 CORPORATE AND LIMITED LIABILITY COMPANY EXISTENCE, ETC.

                  Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate or limited liability company existence and all
rights and franchises material to its business; provided, however, that neither
Company nor any of its Subsidiaries shall be required to preserve any such right
or franchise and, solely with respect to Company's Subsidiaries, such existence,
if the Board of Directors or members of Company or such Subsidiary determines in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of Company or such Subsidiary, as the case may be, and that the
loss thereof, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.

                  6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.

                  A. Company will, and will cause each of its Subsidiaries to,
pay all material Taxes, assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any material penalty accrues thereon, and all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may

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become a Lien upon any of its properties or assets, prior to the time when any
material penalty or fine shall be incurred with respect thereto; provided that
no such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.

                  B. Company will not, and will not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income Tax
return with any Person (other than Company or any of its Subsidiaries).

                  6.4 MAINTENANCE OF PROPERTIES; INSURANCE.

                  Company will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all of their respective material properties
used or useful in the business of Company and its Subsidiaries (including,
without limitation, Intellectual Property) and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof;
provided, however, that (A) Company and its Subsidiaries may dispose of obsolete
equipment in the ordinary course of business and (B) Company and its
Subsidiaries may (i) close, terminate, surrender, reject in bankruptcy or reduce
the term of leases, (ii) amend or otherwise modify leases in a manner that does
not materially and adversely affect Company, any of its Subsidiaries,
Administrative Agent or Lenders or (iii) otherwise cease to operate theatres and
remove fixtures and personalty therefrom upon the expiration or other
termination of the applicable lease if, in the case of clause (i) and (iii)
(other than upon expiration), the Board of Directors of Company or such
Subsidiary, as the case may be, determines in good faith that the maintenance
and continued operation thereof is no longer desirable in the conduct of the
business of Company or such Subsidiary, as the case may be, and that the loss
thereof, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. Company will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and businesses of its
Subsidiaries against loss or damage of the kinds customarily carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses. Each such policy of insurance shall (a) name
Collateral Agent for the benefit of the Lenders and the Priority Secured Lenders
as an additional insured thereunder as its interest may appear and (b) in the
case of each casualty insurance policy, except as otherwise provided for in this
Agreement, contain a loss payable clause or endorsement, satisfactory in form
and substance to Collateral Agent, that names Collateral Agent for the benefit
of the Lenders and the Priority Secured Lenders as the loss payee thereunder for
any covered loss in excess of $500,000 and (c) provide for at least 30 days
prior written notice to Collateral Agent of any modification or cancellation of
such policy.

                  6.5 INSPECTION; LENDER MEETING.

                  Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of Company or any of its Subsidiaries once during
each Fiscal Year, including its and their financial and accounting records, and
to make copies and take extracts therefrom, and to discuss its and their

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affairs, finances and accounts with its and their officers and independent
public accountants (provided that Company may, if it so chooses, be present at
or participate in any such discussion) upon reasonable notice and at such
reasonable times during normal business hours as may be reasonably requested;
provided that, at any time after the occurrence and during the continuance of an
Event of Default, Company shall, and shall cause each of its Subsidiaries to
permit such additional audits as Administrative Agent may deem necessary or
advisable, upon reasonable notice and at such reasonable times during normal
business hours as may be reasonably requested. Without in any way limiting the
foregoing, Company will, upon the request of Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and Lenders once
during each Fiscal Year to be held at Company's corporate offices (or such other
location as may be agreed to by Company and Administrative Agent) at such time
as may be agreed to by Company and Administrative Agent.

                  6.6 COMPLIANCE WITH LAWS, ETC.

                  Company shall, and shall cause each of its Subsidiaries to,
comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority, noncompliance with which could reasonably
be expected to cause, individually or in the aggregate at any time, a Material
Adverse Effect.

                  6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.

                  A. Company shall, and shall cause each of its Subsidiaries to,
exercise commercially reasonable due diligence in order to comply in all
material respects, and cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities and (ii) all other Persons on
or occupying such property to comply in all material respects, with all
Environmental Laws, except where failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

                  B. Company agrees that Administrative Agent may, upon a
reasonable belief that Company has breached any covenant or representation with
respect to environmental matters set forth herein or that there has been a
violation of Environmental Laws at any Facility or by Company which breach or
violation could reasonably be expected to have a Material Adverse Effect,
retain, at Company's reasonable expense, an independent professional consultant
(the selection of which shall be subject to Company's reasonable consent) to
review any report relating to Hazardous Materials prepared by or for Company in
connection with such potential breach or violation and to conduct its own
reasonable investigation of such matter at such Facility currently owned,
leased, operated or used by Company or any of its Subsidiaries which is the
subject of such potential breach or violation, and Company agrees to use its
commercially reasonable efforts to obtain permission for Administrative Agent's
professional consultant to conduct its own investigation of any such matter at
any Facility previously owned, leased, operated or used by Company or any of its
Subsidiaries which is the subject of such potential breach or violation. Company
hereby grants to Administrative Agent and its agents, employees, consultants and
contractors the right to enter into or onto the aforementioned Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
upon reasonable notice to Company to perform such assessments on such property
as are reasonably necessary to conduct such a review and/or investigation. Any
such investigation of any such Facility shall be

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conducted, unless otherwise agreed to by Company and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at any such
Facility or to cause any damage or loss to any property at such Facility.
Company and Administrative Agent hereby acknowledge and agree that any report of
any investigation conducted at the request of Administrative Agent pursuant to
this subsection 6.7B may be obtained and may be used by Administrative Agent and
Lenders only for the purposes of Lenders' internal credit decisions, to monitor
and police the Loans and to protect Lenders' security interests, if any, created
by the Term Loan Documents. Administrative Agent agrees to deliver a copy of any
such report to Company with the understanding that Company acknowledges and
agrees that (i) it will indemnify and hold harmless Administrative Agent and
each Lender from any reasonable costs, losses or liabilities relating to
Company's use of or reliance on such report, (ii) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such report,
and (iii) by delivering such report to Company, neither Administrative Agent nor
any Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report. In addition to, and without limiting
the generality of the foregoing, Company shall, at Administrative Agent's
reasonable request and at Company's expense, conduct such investigation of the
Facility located at 183-15 Horace Harding Blvd., Fresh Meadows, New York as is
reasonably necessary to determine whether Hazardous Materials may exist in soil
or ground water in the vicinity. Administrative Agent shall have the right to
reasonably approve consultants to be engaged by Company, and the scope of
investigation proposed by such consultant. Company agrees Administrative Agent
shall be deemed reasonable in disapproving any consultant who is not member of a
nationally-recognized environmental consulting firm or who does not have five or
more years experience with remediation of Hazardous Materials contamination.

                  C. Company shall promptly advise Lenders in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state, provincial or local governmental or regulatory
agency under any applicable Environmental Laws, which Release has a reasonable
possibility of giving rise to a Material Adverse Effect, (ii) any and all
written communications with respect to any Environmental Claims that have a
reasonable possibility of giving rise to a Material Adverse Effect or with
respect to any Release of Hazardous Materials required to be reported to any
federal, state, provincial or local governmental or regulatory agency which
Release has a reasonable possibility of giving rise to a Material Adverse
Effect, (iii) any remedial action taken by Company or any other Person in
response to (x) any Hazardous Materials on, under or about any Facility, the
existence of which has a reasonable possibility of resulting in an Environmental
Claim having a Material Adverse Effect, or (y) any Environmental Claim that has
a reasonable possibility of having a Material Adverse Effect, (iv) Company's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any Facility that could reasonably be expected to cause such
Facility or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws which restriction would have a reasonable possibility of having a Material
Adverse Effect, and (v) any request for information from any governmental agency
that suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for a Release of Hazardous
Materials, which Release has a reasonably possibility of giving rise to a
Material Adverse Effect. In addition to, and without limiting the generality of
the foregoing, Company shall, within 120 days after the Closing Date, deliver to
Administrative Agent either (i) confirmation reasonably

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satisfactory to Administrative Agent that all underground storage tanks owned or
operated by Company and its Subsidiaries are in material compliance with all
Environmental Laws or (ii) with respect to any underground storage tanks owned
or operated by Company or any of its Subsidiaries that are not in material
compliance with all Environmental Laws, Company shall use its commercially
reasonable best efforts to cause such underground storage tanks to be in
material compliance with all Environmental Laws.

                  D. Company shall promptly notify Administrative Agent of any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have a Material Adverse Effect.

                  E. Company shall, at its own expense, provide copies of such
documents or information as Administrative Agent may reasonably request in
relation to any matters disclosed pursuant to this subsection 6.7.

                  6.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.

                  Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all remedial action in connection with
the presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility to the extent required under all
applicable Environmental Laws and Governmental Authorizations except where
failure to comply, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. In the event Company or any of
its Subsidiaries undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, Company or such Subsidiary shall
conduct and complete such remedial action in compliance with applicable
Environmental Laws, except where failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

                  6.9 EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS
BY FUTURE SUBSIDIARIES.

                  A. Execution of Subsidiary Guaranty and Collateral Documents.
If any Person becomes a Wholly Owned North American Subsidiary of Company after
the date hereof, or if any Merged Subsidiary fails to be merged with and into
the Wholly Owned North American Subsidiary of Company set forth opposite its
name on Schedule 5.21 within three Business Days after the Closing Date, Company
will promptly notify Collateral Agent of that fact and cause such Subsidiary or
Merged Subsidiary, as the case may be, to execute and deliver to Collateral
Agent a counterpart of the Subsidiary Guaranty and the Security Agreement and to
take all such further action and execute all such further documents and
instruments as may be reasonably required to grant and perfect in favor of
Collateral Agent, for the benefit of Lenders, a Second Priority security
interest in all of the personal property assets of such Subsidiary or Merged
Subsidiary described in the applicable Collateral Documents. With respect to (i)
any Person that becomes a Subsidiary of Company or a Joint Venture of Company or
any of its Wholly Owned North American Subsidiaries after the date hereof and
(ii) any Merged Subsidiary that fails to be merged with and into the Wholly
Owned North American Subsidiary of Company set forth opposite its name on
Schedule 5.21 within three Business Days after the Closing Date, Company

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shall also deliver to Collateral Agent a pledge amendment to the Security
Agreement, granting to Collateral Agent on behalf of Lenders a Second Priority
security interest in one hundred percent (100%) of the equity interests in such
Subsidiary or Merged Subsidiary, as the case may be (sixty-five percent (65%) of
such equity interests if such Subsidiary is a Foreign Subsidiary), or one
hundred percent (100%) of the equity interests owned by Company or any of its
Wholly Owned North American Subsidiaries in such Joint Venture, as the case may
be, and Company shall take, or cause to be taken, all such other actions as
Collateral Agent shall deem necessary or desirable to perfect such security
interest.

                  B. Subsidiary Charter Documents, Legal Opinions, Etc. Company
shall deliver to Collateral Agent, together with the counterpart to the
Subsidiary Guaranty and such Collateral Documents to which it is a party, (i)
certified copies of such Subsidiary's or Merged Subsidiary's constating
documents, together with a good standing certificate (or equivalent thereof)
from the jurisdiction of its organization, each to be dated a recent date prior
to their delivery to Collateral Agent, (ii) a copy of such Subsidiary's or
Merged Subsidiary's Bylaws or limited liability company agreement, as
applicable, certified by its secretary or an assistant secretary as of a recent
date prior to their delivery to Collateral Agent, (iii) a certificate executed
by the secretary or an assistant secretary of such Subsidiary or Merged
Subsidiary as to (a) the incumbency and signatures of the officers of such
Subsidiary or Merged Subsidiary executing the Subsidiary Guaranty and the
Collateral Documents to which such Subsidiary or Merged Subsidiary is a party
and (b) the fact that the attached resolutions of the Board of Directors of such
Subsidiary or Merged Subsidiary authorizing the execution, delivery and
performance of the Subsidiary Guaranty and such Collateral Documents are in full
force and effect and have not been modified or rescinded, (iv) an Intercompany
Note executed and delivered by such Subsidiary or Merged Subsidiary evidencing
all intercompany Indebtedness permitted with respect to such Subsidiary or
Merged Subsidiary pursuant to subsection 7.1(iv) and cause such Intercompany
Note to be pledged to Collateral Agent on behalf of Lenders under the applicable
Collateral Document, and (v) a favorable opinion of counsel to such Subsidiary
or Merged Subsidiary, in form and substance satisfactory to Collateral Agent and
its counsel, as to (a) the due organization and good standing of such Subsidiary
or Merged Subsidiary, (b) the due authorization, execution and delivery by such
Subsidiary or Merged Subsidiary of the Subsidiary Guaranty and such Collateral
Documents, (c) the enforceability of the Subsidiary Guaranty and such Collateral
Documents against such Subsidiary or Merged Subsidiary, and (d) such other
matters as Collateral Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Collateral Agent and its counsel.

                  6.10 MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.

                  A. Recorded Leasehold Interests. To the extent Company shall
not have delivered to Collateral Agent a fully executed and notarized Mortgage
on the Closing Date with respect to any Leasehold Property designated as a
Closing Date Mortgaged Property, Company shall continue to use its reasonable
best efforts to obtain a Mortgage on such Leasehold Property. If Company or any
of its Subsidiaries acquires any Leasehold Property, Company shall, or shall
cause such Subsidiary to, cause such Leasehold Property to be a Recorded
Leasehold Interest (unless otherwise permitted by Collateral Agent in its
reasonable discretion).

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                  B. Additional Mortgages, Etc. From and after the Closing Date,
if (i) any Loan Party acquires any fee or leasehold interest in real property or
any Leasehold Property (unless otherwise permitted by Collateral Agent in its
reasonable discretion) or (ii) at the time any Person becomes a Loan Party, such
Person owns or holds any fee or leasehold interest in real property or any
Leasehold Property, in the case of clause (ii) above, excluding any such Real
Property Asset the encumbrancing of which requires the consent of any applicable
lessor or then-existing senior lienholder, where Company and its Subsidiaries
are unable to obtain such lessor's or senior lienholder's consent (any such
non-excluded Real Property Asset described in the foregoing clauses (i) or (ii)
being an "ADDITIONAL MORTGAGED PROPERTY"), such Loan Party shall deliver to
Collateral Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property or becomes a Loan Party, as the case may be, a
fully executed and notarized Mortgage (an "ADDITIONAL MORTGAGE"), in proper form
to be duly recorded in all appropriate places in all applicable jurisdictions,
encumbering the interest of such Loan Party in such Additional Mortgaged
Property; and such opinions, appraisal, documents, title insurance,
environmental reports that may be reasonably required by Collateral Agent that
would have been delivered on the Closing Date if such Additional Mortgaged
Property were a Closing Date Mortgaged Property.

                  C. Real Estate Appraisals. Company shall, and shall cause each
of its Subsidiaries to, permit an independent real estate appraiser satisfactory
to Collateral Agent, upon reasonable notice, to visit and inspect any Additional
Mortgaged Property for the purpose of preparing an appraisal of such Additional
Mortgaged Property satisfying the requirements of any applicable laws and
regulations (in each case to the extent such appraisal is required under such
laws and regulations as determined by Collateral Agent in its discretion).

                  6.11 CASH MANAGEMENT SYSTEM.

                  Company and Subsidiary Guarantors shall maintain the Cash
Management System (including through timely compliance with their obligations to
pay returned items and other Obligations arising in the ordinary course of
operation of the Cash Management System) as described in Schedule 6.11 annexed
hereto. Company shall, and shall cause each Subsidiary Guarantor to, (i) use and
maintain its Deposit Accounts and cash management systems in a manner reasonably
satisfactory to Administrative Agent and (ii) obtain and maintain a deposit
account control agreement in form and substance reasonably satisfactory to
Administrative Agent for each Deposit Account of Company and Subsidiary
Guarantors. Upon Administrative Agent's request, Company shall, and shall cause
each Subsidiary Guarantor to, make such modifications to the Cash Management
System as Administrative Agent shall reasonably request, including, without
limitation, moving any Deposit Account to a different bank, savings and loan
association, credit union or like organization on terms and conditions, and
subject to arrangements, reasonably satisfactory to Administrative Agent.
Company shall not permit the aggregate amount of money or currency held by its
Foreign Subsidiaries in a Deposit Account or otherwise at any time to exceed the
equivalent of $50,000.

                  6.12 UNSECURED SETTLEMENT DISTRIBUTION.

                  Company shall pay the Unsecured Settlement Distribution (as
defined in the Plan of Reorganization) in accordance with the Plan of
Reorganization and shall apply the proceeds of

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common equity contributions made by the Sponsors to Company and Company's own
cash-on-hand to the payment of the Unsecured Settlement Distribution prior to
applying the proceeds of any Priority Secured Loans to such payment. Within 90
days after the Closing Date, Company shall deliver to Administrative Agent an
Officer's Certificate setting forth the final calculation of the Company-Funded
Unsecured Settlement Amount, and each amount described in the definition of the
Company-Funded Unsecured Settlement Amount all in a level of detail and
otherwise in form and substance satisfactory to Administrative Agent. In no
event shall Company permit the Company-Funded Unsecured Settlement Amount to
exceed 80% of the amount of common equity contributed by the Sponsors to Company
to fund the Unsecured Settlement Distribution.

                  6.13 RATINGS.

                  Upon the request of Administrative Agent, Company shall obtain
ratings of the Restructured Term Loans from S&P and/or Moody's.

                  6.14 EMPLOYEE BENEFIT PLANS.

                  Company and Cineplex Odeon shall and shall cause each of their
respective Subsidiaries to ensure that each Canadian Pension Plan and Canadian
Benefit Plan is administered in a timely manner in all respects in accordance
with the applicable pension plan text, funding agreement, the Income Tax Act
(Canada) and all other applicable laws.

                  6.15 DISSOLVED OR DISPOSED SUBSIDIARIES.

                  With respect to each Person listed on Schedule 6.15, Company
shall have either caused such Person to be dissolved, liquidated, or merged out
of existence or sold, transferred, rejected or otherwise disposed of all equity
interests of such Person owned by Company or any of its Subsidiaries, in each
case within 45 days after the Closing Date.

SECTION 7. COMPANY'S NEGATIVE COVENANTS

                  Company covenants and agrees that, so long as any of the
Restructured Term Loan Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations, unless Requisite
Lenders shall otherwise give prior written consent, Company shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
7.

                  7.1 INDEBTEDNESS.

                  Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

                      (i) Company may become and remain liable with respect to
the Obligations;

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                      (ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;

                      (iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;

                      (iv) Company may become and remain liable with respect to
Indebtedness to any of its Wholly Owned North American Subsidiaries, and any
Wholly Owned North American Subsidiary of Company may become and remain liable
with respect to Indebtedness to Company or any other Wholly Owned North American
Subsidiary of Company; provided that (a) all such intercompany Indebtedness
shall be evidenced by an Intercompany Note that is pledged to Collateral Agent
pursuant to the terms of the applicable Collateral Document; (b) all such
intercompany Indebtedness shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the Intercompany
Note; (c) any payment by any Wholly Owned North American Subsidiary of Company
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any intercompany Indebtedness owed by such Wholly Owned North
American Subsidiary to Company or to any of its Wholly Owned North American
Subsidiaries for whose benefit such payment is made and (d) in the case of
Indebtedness of Cineplex Odeon and/or any of its Wholly Owned North American
Subsidiaries to Company or any of its Wholly Owned North American Subsidiaries
(other than Cineplex Odeon and its North American Subsidiaries), such
intercompany Indebtedness shall be secured by Third Priority Liens on all of the
assets of Cineplex Odeon and its Wholly Owned Subsidiaries, which Third Priority
Liens are (1) granted pursuant to documentation reasonably satisfactory in form
and substance to Collateral Agent and its counsel and (2) collaterally assigned
to Collateral Agent for the benefit of Lenders pursuant to the applicable
Collateral Document;

                      (v) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness secured by Liens permitted under subsection
7.2A(iii); provided that the aggregate amount of Indebtedness permitted under
this subsection 7.1(v) outstanding at any time shall not exceed $20,000,000 or
the Equivalent Amount in any other currency;

                      (vi) Company and its Subsidiaries may remain liable with
respect to Indebtedness existing on the Closing Date set forth in Schedule
7.1(vi);

                      (vii) Company and its Wholly Owned North American
Subsidiaries may become and remain liable with respect to Indebtedness of a
Person existing at the time such Person is merged into or consolidated with
Company or any Wholly Owned North American Subsidiary of Company or becomes a
Wholly Owned North American Subsidiary of Company; provided that such
Indebtedness was not incurred in connection with, in contemplation of, or with
the purpose of financing such merger, consolidation or acquisition; provided
further that Company can demonstrate in form and substance satisfactory to
Administrative Agent that, immediately before and after giving effect to the
incurrence of such Indebtedness, (a) Company is in compliance on a pro forma
basis with all covenants set forth in Section 7 of this Agreement and (b) there
is no Potential Event of Default or Event of Default; provided still further
that the

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aggregate amount of Indebtedness permitted under this subsection 7.1(vii)
outstanding at any time shall not exceed $20,000,000 or the Equivalent Amount in
any other currency;

                      (viii) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal amount not
to exceed $5,000,000 at any time outstanding;

                      (ix) non-Wholly Owned Subsidiaries of Company may become
and remain liable with respect to Investments by the Company and its Wholly
Owned Subsidiaries in such non-Wholly Owned Subsidiaries of Company to the
extent permitted by subsection 7.3A(viii)(a);

                      (x) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in an aggregate principal amount not
exceeding $140,000,000 under the Priority Secured Credit Agreement and any
refinancings or renewals thereof;

                      (xi) if Company exercises its Cure Rights pursuant to
subsection 7.6C, Company may become and remain liable with respect to
Indebtedness under Permitted Cure Securities;

                      (xii) Off-Balance Sheet Subsidiaries may become and remain
liable with respect to Indebtedness used solely to finance Off-Balance Sheet
Capital Expenditures; and

                      (xiii) Company may issue Subordinated Indebtedness;
provided that the proceeds of such Subordinated Indebtedness are used as a
mandatory prepayment pursuant to subsection 2.4B(ii)(c).

                  7.2 LIENS AND RELATED MATTERS.

                  A. Prohibition on Liens. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State, the PPSA of any province
or territory in Canada or under any similar filing, recording or notice statute,
except:

                      (i) Permitted Encumbrances;

                      (ii) Liens granted pursuant to the Collateral Documents;

                      (iii) (A) Liens securing Indebtedness incurred to finance
the acquisition, construction or improvement of any real property assets
acquired or held by Company or any of its Subsidiaries in the ordinary course of
business (hereinafter referred to individually as a "PURCHASE MONEY MORTGAGE"),
and (B) purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests, on motor vehicles

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and equipment acquired by Company or any Subsidiary (hereinafter referred to
individually as a "PURCHASE MONEY SECURITY INTEREST"); provided, however, that:

                  (a) the aggregate amount of Indebtedness outstanding at any
         time secured by Purchase Money Mortgages and Purchase Money Security
         Interests shall not exceed $20,000,000 or the Equivalent Amount in any
         other currency;

                  (b) the transaction in which any Purchase Money Mortgage or
         Purchase Money Security Interest is proposed to be created is not then
         prohibited by this Agreement;

                  (c) any Purchase Money Mortgage or Purchase Money Security
         Interest shall attach only to the property or asset acquired,
         constructed or improved (in the case of a Purchase Money Mortgage) or
         acquired (in the case of a Purchase Money Security Interest) in such
         transaction and, in each case, shall not extend to or cover any other
         assets or properties of Company, or, as the case may be, a Subsidiary;

                  (d) the Indebtedness secured or covered by any Purchase Money
         Mortgage or Purchase Money Security Interest shall not exceed the
         lesser of the cost or fair market value of the property or asset
         acquired and shall not be renewed, extended or prepaid from the
         proceeds of any borrowing by Company or any Subsidiary;

              (iv) Other Liens securing Indebtedness in an aggregate amount not
to exceed $10,000,000 or the Equivalent Amount in any other currency at any time
outstanding;

              (v) Liens existing on the Closing Date set forth on Schedule
7.2A(v) or extending (without increasing the amount of Indebtedness secured by
such Lien at the time of such extension) any of the Liens set forth on Schedule
7.2A(v);

              (vi) Liens securing Indebtedness permitted by subsection 7.1(vii)
on property or assets of a Person existing at the time such Person is merged
into or consolidated with Company or any Wholly Owned North American Subsidiary
of Company or becomes a Wholly Owned North American Subsidiary of Company;
provided that such Liens were not incurred in connection with, in contemplation
of, or for the purpose of facilitating the financing of, such merger,
consolidation or acquisition;

              (vii) Liens securing payment of Currency Agreements or Interest
Rate Agreements, in each case to the extent the counterparty to any such
agreement is (or at the time such agreement was entered into, was) a Lender or
an Affiliate of a Lender;

              (viii) Third Priority Liens securing Indebtedness of Cineplex
Odeon and/or any of its Wholly Owned North American Subsidiaries due and owing
to Company; provided that (a) such Indebtedness is permitted by subsection
7.1(iv), (b) (1) such Indebtedness is pledged to Collateral Agent for the
benefit of Lenders pursuant to the applicable Collateral Document and (2) such
Third Priority Liens are collaterally assigned to Collateral Agent for the
benefit of Lenders pursuant to the applicable Collateral Document and (c) such
Liens are granted

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pursuant to documentation reasonably satisfactory in form and substance to
Collateral Agent and its counsel;

                      (ix) First Priority Liens on assets of Company and its
Subsidiaries securing obligations of (a) Company and/or Cineplex Odeon under the
Priority Secured Credit Agreement, (b) Company under the Company Guaranty and
(c) Subsidiary Guarantors under the Subsidiary Guaranty; and

                      (x) Liens on assets of any Off-Balance Sheet Subsidiary
securing Indebtedness of such Off-Balance Sheet Subsidiary used solely to
finance Off-Balance Sheet New Build Capital Expenditures of such Off-Balance
Sheet Subsidiary.

                  B. Equitable Lien in Favor of Lenders. If Company or any of
its Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.

                  C. No Further Negative Pledges. Except with respect to (i)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale and (ii)
Liens on properties leased in the ordinary course of business with respect to
the property so leased, none of Company or any of its Subsidiaries (other than
any Off-Balance Sheet Subsidiary) shall enter into any agreement prohibiting the
creation or assumption of any Lien for the benefit of the Lenders upon any of
its properties or assets, whether now owned or hereafter acquired.

                  D. No Restrictions on Subsidiary Distributions to Company or
Other Subsidiaries. Except (i) as provided herein and in the Priority Secured
Credit Agreement, (ii) as provided in any loan agreement or other document
evidencing Indebtedness of (x) any of Company's Wholly Owned North American
Subsidiaries permitted under subsection 7.1(vi) or (vii) or (y) any Off-Balance
Sheet Subsidiary used solely to finance Off-Balance Sheet New Build Capital
Expenditures, (iii) for any agreement that has been entered into for the sale or
disposition of all or substantially all of the equity ownership interests or
assets of such Subsidiary (provided that (x) the consummation of such sale or
disposition is permitted by this Agreement, (y) such restriction only applies to
the equity ownership interests or assets to be sold pursuant to such agreement
and (z) such restriction terminates upon consummation or abandonment of such
disposition and upon termination of such agreement), (iv) for any security
agreement or other similar document creating or evidencing a Lien permitted by
subsection 7.2A(iii), (iv), (v), (vi), (vii), (viii), (ix) or (x) securing
Indebtedness permitted to be incurred under subsection 7.1, in each case to the
extent that such security agreement or other document imposes restrictions of
the nature described in clause (d) below on the property subject to such Lien,
(v) for restrictions on non-Wholly Owned Subsidiaries, (vi) for customary
provisions restricting subletting or assignment of leases, licenses and other
contractual rights and obligations, and (vii) by reason of applicable law,
Company will not, and will not permit any of

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its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (a) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Company or any other Subsidiary
of Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (c) make loans or advances to
Company or any other Subsidiary of Company, or (d) transfer any of its property
or assets to Company or any other Subsidiary of Company.

                  7.3 INVESTMENTS; JOINT VENTURES.

                  A. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:

                      (i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;

                      (ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of Company;

                      (iii) Company and its Wholly Owned North American
Subsidiaries may make intercompany loans to the extent permitted under
subsection 7.1(iv);

                      (iv) Company and its Wholly Owned North American
Subsidiaries may make and continue to own equity Investments in any Person
which, prior to the making of such Investments, is a Wholly Owned North American
Subsidiary of Company;

                      (v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3A(v) annexed hereto;

                      (vi) Company and its Subsidiaries may make Investments
constituting (a) accounts receivable arising in the ordinary course of business,
(b) prepaid film rentals, (c) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of business or
(d) refundable construction advances made with respect to the construction of
properties that are to be used in the business of Company or its Wholly Owned
North American Subsidiaries and that are not outstanding more than one year from
the date made; provided that any Investments made pursuant to the preceding
clause (d) that are not repaid within one year of being made shall be deemed to
be Permitted Investments for the purpose of calculating compliance with
subsection 7.3A(viii) and subsection 7.7(iii);

                      (vii) Company and its Subsidiaries may make Investments
constituting (a) payroll advances, (b) travel and entertainment advances and (c)
relocation loans to officers and employees of Company or any of its Subsidiaries
in the ordinary course of business; provided, that the aggregate amount of
Investments permitted under this clause shall not exceed $2,500,000 or the
Equivalent Amount in any other currency at any time outstanding;

                      (viii) Company and its Wholly Owned North American
Subsidiaries may make and continue to own Permitted Investments and Permitted
Acquisitions; provided that Company and its Wholly Owned North American
Subsidiaries shall not (a) make Permitted

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Investments in an aggregate amount (net of the amount of loans, advances and
Contingent Obligations constituting Permitted Investments that are repaid,
released or cancelled, as the case may be, during the term of this Agreement) in
excess of $8,000,000 or the Equivalent Amount in any other currency in any
Fiscal Year (the amount of such Permitted Investments made in such Fiscal Year
being the "INVESTMENT EXPENDITURE AMOUNT") and (b) make Permitted Acquisitions
in any Fiscal Year in an aggregate amount in excess of the difference between
(1) $25,000,000 or the Equivalent Amount in any currency and (2) the sum of (A)
the Investment Expenditure Amount for such Fiscal Year plus (B) the amount of
Consolidated New Build Capital Expenditures for such Fiscal Year (the amount of
such Permitted Acquisitions made in such Fiscal Year being the "ACQUISITION
EXPENDITURE AMOUNT," and together with the Investment Expenditure Amount, the
"INVESTMENT/ACQUISITION EXPENDITURE AMOUNT");

                      (ix) Company and its Wholly Owned Subsidiaries may make
Investments constituting loans and/or advances to Joint Ventures directly owned
by any of them in an aggregate amount not to exceed at any time $2,000,000 for
the operating needs in the ordinary course of business of such Joint Ventures;

                      (x) Company and its Wholly Owned North American
Subsidiaries may make and continue to own Investments in Megabox Cineplex, Inc.;
provided that (a) the aggregate amount of such Investments does not exceed
$25,000,000 and (b) the sole source of funds for such Investments is Cash common
equity contributions to Company by Sponsors; and

                      (xi) any Off-Balance Sheet Subsidiary may make and
continue to own Investments in other Off-Balance Sheet Subsidiaries.

provided that the foregoing shall not prohibit any Subsidiary of Company from
making dividends or distributions to Company or any Wholly Owned North American
Subsidiary of Company; and provided further that any Investment which when made
complies with the requirements of the definition of the term Cash Equivalent may
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements.

                  B. Notwithstanding anything to the contrary contained in
subsection 7.3A, Company and its Subsidiaries shall not (i) make any Investment
in any Joint Venture if, upon the making of such Investment, such Joint Venture
is or becomes a Subsidiary of Company or any of its Subsidiaries or (ii) make
any Investment in any Person listed on Schedule 7.3B.

                  7.4 CONTINGENT OBLIGATIONS.

                  Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:

                      (i) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of letters of credit
issued under the Priority Secured Credit Agreement;

                      (ii) Company may become and remain liable with respect to
Contingent Obligations arising under the Company Guaranty, and each Subsidiary
Guarantor

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may become and remain liable with respect to Contingent Obligations arising
under the Subsidiary Guaranty;

                      (iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in connection
with Asset Sales or other sales of assets;

                      (iv) (a) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of any
Indebtedness of Company or any of its Wholly Owned North American Subsidiaries
and (b) Company and its Subsidiaries may become and remain liable with respect
to Contingent Obligations in respect of any Indebtedness, Operating Leases or
other obligations of any Joint Venture or non-Wholly Owned Subsidiary (other
than an Off-Balance Sheet Subsidiary); provided that the aggregate maximum
liability of Company and its Subsidiaries with respect to the Contingent
Obligations permitted under the preceding clause (b) shall not exceed $8,000,000
or the Equivalent Amount in any other currency at any time; provided further
that the aggregate maximum liability of Company and its Subsidiaries with
respect to the Contingent Obligations permitted under the preceding clause (b)
shall be deemed to be a "Permitted Investment" for purposes of calculating
compliance with subsection 7.3A(viii) and subsection 7.7(iii) but shall cease to
be included in such calculation upon the permanent release or cancellation of
such Contingent Obligations.

                      (v) Company and its Subsidiaries may remain liable with
respect to the Contingent Obligations existing on the Closing Date set forth in
Schedule 7.4(v);

                      (vi) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations (other than Contingent
Obligations in respect of any Indebtedness or other obligation of any
Off-Balance Sheet Subsidiary); provided that the maximum aggregate liability,
contingent or otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations shall at no time exceed $20,000,000 or the Equivalent
Amount in any other currency;

                      (vii) Company and its Subsidiaries may become and remain
liable with respect to guarantees of Operating Leases, construction contracts
and other contracts and agreements of Company and its Wholly Owned North
American Subsidiaries entered into the ordinary course of business of Company
and its Wholly Owned North American Subsidiaries;

                      (viii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of Currency Agreements
and Interest Rate Agreements (other than Currency Agreements and Interest Rate
Agreements of any Off-Balance Sheet Subsidiary), in each case to the extent the
counterparty to any such Currency Agreements and Interest Rate Agreements is (or
at the time such Currency Agreement or Interest Rate Agreement was entered into,
was) a Lender or an Affiliate of a Lender;

                      (ix) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of leases assumed by
other Persons (other than Off-Balance Sheet Subsidiaries) in connection with
theatres that are sold or closed by Company or

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<PAGE>
any of its Subsidiaries, in each case to the extent Company or any of its
Subsidiaries remains liable for any deficiencies thereunder; and

                      (x) Company's Subsidiaries may become and remain liable
with respect to Contingent Obligations, on a subordinated basis, with respect to
Subordinated Indebtedness incurred by Company pursuant to subsection 7.1(xiii).

                  7.5 RESTRICTED JUNIOR PAYMENTS; CERTAIN OTHER PAYMENTS.

                  Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that so long as no Potential
Event of Default or Event of Default has occurred and is continuing or would
result therefrom, Company may purchase, redeem, acquire, cancel or otherwise
retire for value shares of capital stock of Company, or warrants or options on
any such shares or related stock appreciation rights, phantom shares or similar
securities, in each case that are owned by officers or employees (or their
estates or beneficiaries under their estates), upon the death, disability,
retirement, termination of employment or pursuant to the terms of the stock
option plan or any other agreement under which such shares of capital stock,
warrants, options, related rights, phantom shares or similar securities were
issued or under which they may be put or called; provided further that the
aggregate cash consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement for value of such shares of capital stock,
options, related rights or similar securities shall not exceed $10,000,000
during the term of this Agreement.

                  7.6 FINANCIAL PERFORMANCE COVENANTS.

                  A. Maximum Leverage Ratio. Company shall not permit the
Leverage Ratio, calculated on a Pro Forma Basis, for any four Fiscal Quarter
period ending during any of the periods set forth below to exceed the
correlative ratio indicated:

<TABLE>
<CAPTION>
                     PERIOD                                 MAXIMUM LEVERAGE RATIO
<S>                                                              <C>
Closing Date - August 31, 2003                                   5:15 : 1:00
September 1, 2003 - August 31, 2004                              4:50 : 1.00
September 1, 2004 - August 31, 2005                              4.00 : 1.00
September 1, 2005 - August 31, 2006                              3.25 : 1.00
September 1, 2006 and thereafter                                 2.75 : 1.00
</TABLE>

                  B. Minimum Debt Service Coverage Ratio. Company shall not
permit the Debt Service Coverage Ratio, calculated on a Pro Forma Basis, for any
four Fiscal Quarter period ending during any of the periods set forth below to
be less than the correlative ratio indicated.

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<PAGE>
<TABLE>
<CAPTION>
                                                                   MINIMUM DEBT
                      PERIOD                                  SERVICE COVERAGE RATIO
<S>                                                           <C>
       Closing Date - February 28, 2006                             1.25 : 1.00
       March 1, 2006 and thereafter                                 1.10 : 1.00
</TABLE>

                  C. Company's Rights to Cure.

                    (i) Financial Performance Covenants. If Company fails to
comply with the requirements of a Financial Performance Covenant, until the
expiration of the 10th day subsequent to the date the Compliance Certificate
calculating such covenant is due pursuant to subsection 6.1(iv) and so long as
no Cure Rights Prohibition Period shall be in effect, Company shall have Cure
Rights, and upon the receipt by Company of Cash following the exercise of such
Cure Rights, the Financial Performance Covenants shall be recalculated giving
effect to one of the following pro forma adjustments specified by Company:

                        (a) Wholly Owned EBITDA shall be increased by the lesser
          of (1) the Cure Amount and (2) an amount equal to 10% of Wholly Owned
          EBITDA for the four Fiscal Quarter period utilized in determining
          compliance with the Financial Performance Covenant (before giving
          effect to the increase in Wholly Owned EBITDA made by the addition of
          the Cure Amount); or

                        (b) provided that the Cure Amount is applied to prepay
          the Loans in accordance with subsection 2.4B(ii)(f), Wholly Owned
          Total Debt shall be reduced by the amount of the Cure Amount.

If, after giving effect to the foregoing recalculations, Company shall then be
in compliance with the requirements of all Financial Performance Covenants,
Company shall be deemed to have satisfied the requirements of the Financial
Performance Covenants as of the relevant date of determination with the same
effect as though there was no failure to comply therewith at such date, and any
breach or default of the Financial Performance Covenants theretofore occurring
as of the relevant date of determination (but not with respect to any preceding
date of determination) shall be deemed cured for all purposes of this Agreement.
If Company shall have satisfied the requirements of the Financial Performance
Covenants by deeming the Cure Amount to increase Wholly Owned EBITDA pursuant to
subsection 7.6C(i)(a), until such time as Company is in compliance with the
Financial Performance Covenants without the making of any Cure Contribution,
Company may not borrow US Tranche Revolving Loans (as defined in the Priority
Secured Credit Agreement) or CN Tranche Revolving Loans (as defined in the
Priority Secured Credit Agreement) during the period from the date of the making
of such Cure Contribution through the time of such compliance in excess of an
aggregate amount (determined without giving effect to any repayments or
prepayments) equal to two times such Cure Contribution.

                    (ii) Limitation on Exercise of Cure Rights. Company shall
have the right to exercise Cure Rights during up to two consecutive Fiscal
Quarters and not again thereafter until the expiration of the Cure Rights
Prohibition Period; provided that in no event

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<PAGE>
shall Company be entitled to exercise Cure Rights more than four times during
the term of this Agreement.

                  7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.

                  Company shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of its Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sub-lessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any portion of its business, property or fixed assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise all
or any portion of the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:

                      (i) any Wholly Owned North American Subsidiary of Company
may be merged with or into Company or any Wholly Owned North American Subsidiary
of Company, or may be liquidated, wound up or dissolved, or all or any part of
its business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Company or any Wholly Owned North American Subsidiary of Company; provided that,
in the case of such a merger, Company or such Wholly Owned North American
Subsidiary shall be the continuing or surviving corporation;

                      (ii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales; provided
that the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;

                      (iii) Company and its Subsidiaries may make Permitted
Acquisitions and Permitted Investments to the extent permitted by subsection
7.3A(viii);

                      (iv) Company and its Subsidiaries may make Asset Sales of
the assets listed on Schedule 1.1C; provided that (a) until the aggregate,
cumulative amount of Net Asset Sale Proceeds from such Asset Sales exceeds the
West 34th Street Loan Amount, (1) Company shall use such Net Asset Sale Proceeds
to repay Priority Secured Revolving Loans (but not reduce the Priority Secured
Revolving Loan Commitments) in accordance with the Priority Secured Credit
Agreement and (2) to the extent such Net Asset Sale Proceeds exceed the amount
of Priority Secured Revolving Loans outstanding at the time Company receives
such Net Asset Sale Proceeds, Company may retain such excess, and (b) the
aggregate, cumulative amount of Net Asset Sale Proceeds from such Asset Sales in
excess of the West 34th Street Loan Amount shall be applied as a mandatory
prepayment in accordance with subsection 2.4B(ii)(a);

                      (v) Company and its Subsidiaries may make Asset Sales of
assets having a fair market value not in excess of $10,000,000 in any individual
case or $30,000,000 in the aggregate, in each case in compliance with subsection
2.4B(ii)(a); provided that (a) the consideration received for such assets shall
be in an amount at least equal to the fair market value thereof, (b) at least
90% of the consideration received shall be cash and (c) the proceeds of such
Asset Sales shall be applied as required by subsection 2.4B(ii)(a);

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<PAGE>
                      (vi) Company may cause the dissolution of any Subsidiary
to the extent permitted by subsection 6.2; and

                      (vii) Company and its Wholly-Owned North American
Subsidiaries may make Asset Swaps; provided that each of the following
conditions is satisfied: (a) the aggregate fair market value (as determined in
good faith by the Board of Directors of Company) of such Asset Swaps shall not
exceed $25,000,000 in any Fiscal Year or $75,000,000 during the life of this
Agreement; (b) the fair market value of the assets received (including Cash not
exceeding 5% of such value) pursuant to such Asset Swap (the "ACQUIRED ASSETS")
shall be equal to at least the fair market value (as determined in good faith by
the Board of Directors of Company) of the assets transferred pursuant to such
Asset Swap (the "TRANSFERRED ASSETS"); (c) the cash portion of any consideration
received by Company or any of its Subsidiaries shall be used to make a mandatory
prepayment in accordance with subsection 2.4B(ii)(a); (d) the Acquired Assets
shall at all times be subject to a Second Priority Lien of Lenders pursuant to
the Collateral Documents; (e) immediately prior to the consummation of such
Asset Swap, Company shall certify to Administrative Agent, and Administrative
Agent shall be satisfied in its sole discretion, that, after giving effect to
such Asset Swap on a pro forma basis, Company and its Wholly-Owned North
American Subsidiaries will be Solvent; and (f) both before and immediately after
consummation of such Asset Swap, no Default or Potential Event of Default shall
have occurred and be continuing.

                  7.8 FISCAL YEAR.

                  Company shall not change its Fiscal Year-end from February 28
or February 29, as the case may be, of each calendar year.

                  7.9 SALE OR DISCOUNT OF RECEIVABLES.

                  Except as set forth in Schedule 7.9, Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable other than (A) sales for collection of
defaulted receivables over 120 days past due, (B) fees and expenses incurred in
the ordinary course of business in connection with the processing of credit card
transactions and (C) the monetization of receivables received by Company or any
of its Subsidiaries in connection with any Asset Sale.

                  7.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.

                  Except for the transactions described on Schedule 7.10,
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any material transaction (including,
without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of equity
Securities of Company, any Affiliate of Company or of any such holder or any of
Company's Off-Balance Sheet Subsidiaries or Joint Ventures, on terms that are
less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time in a comparable arms-length transaction from
Persons who are not such a holder, Affiliate, Off-Balance Sheet Subsidiary or
Joint Venture; provided that the foregoing restriction shall not apply to (i)
any

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<PAGE>
transaction between Company and any of its Wholly Owned North American
Subsidiaries or between any of its Wholly Owned North American Subsidiaries;
(ii) reasonable and customary fees paid to members of the Boards of Directors of
Company and its Subsidiaries to Persons not employed by or associated with the
Sponsors or their respective Affiliates; (iii) Restricted Junior Payments
permitted by subsection 7.5, or (iv) the issuance of Permitted Cure Securities
upon the exercise of Cure Rights pursuant to subsection 7.6C and the payment of
non-cash pay-in-kind dividends and interest on such Permitted Cure Securities.
Notwithstanding the foregoing sentence, provided that the Applicable Leverage
Ratio is less than 3.50:1.00 and no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby, Company may
pay Management Fees in an aggregate amount of up to $5,000,000 in any Fiscal
Year, and any Management Fees not paid in cash because of the foregoing
restrictions or otherwise may accrue pursuant to provisions approved by
Administrative Agent subordinating such Management Fees to the prior payment in
full of the Obligations and the obligations relating to the Priority Secured
Credit Agreement and such accrued Management Fees may thereafter be paid in Cash
so long as (x) after paying such Management Fees and giving pro forma effect
thereto, Company is in compliance with all covenants under this Agreement, (y)
the Applicable Leverage Ratio after giving pro forma effect to such payment does
not exceed 3.50:1.00, and (z) Company shall deliver to Administrative Agent an
Officer's Certificate executed by its chief financial officer certifying as to
the matters in clauses (x) and (y) above and further stating that, after giving
effect to the Cash payment of such Management Fees, Company shall be able to
make the scheduled payments of principal and interest hereunder and under the
Priority Secured Credit Agreement.

                  7.11 DISPOSAL OF SUBSIDIARY STOCK.

                  Except pursuant to the Collateral Documents and except for any
sale (x) of 100% of the capital stock or other equity Securities of any of its
Subsidiaries in compliance with the provisions of subsections 2.4B(ii) and 7.7
and (y) in connection with the formation or sale of interests in Joint Ventures
and non-Wholly Owned Subsidiaries in compliance with subsections 2.4B(ii) and
7.7, Company shall not:

                      (i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if required
by applicable law; or

                      (ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except to Company, to a Wholly Owned North American Subsidiary
of Company, or to qualify directors if required by applicable law.

                  7.12 CONDUCT OF BUSINESS.

                  From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i) the
business of operating movie theatres and similar or related businesses and (ii)
such other lines of business as may be consented to in writing by Requisite
Lenders.

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<PAGE>
                  7.13 CAPITAL EXPENDITURES.

                  A. Maximum Maintenance Capital Expenditures. Company shall
not, and shall not permit any of its Subsidiaries to, make Maintenance Capital
Expenditures in any Fiscal Year in excess of $10,000,000; provided that if the
aggregate amount of Maintenance Capital Expenditures made by Company and its
Subsidiaries in any Fiscal Year is less than $10,000,000, the amount of
Maintenance Capital Expenditures Company and its Subsidiaries shall be permitted
to make in the immediately succeeding Fiscal Year shall be increased by such
difference.

                  B. Maximum Consolidated New Build Capital Expenditures.

                      (i) Company shall not, and shall not permit any of its
Subsidiaries to, make Consolidated New Build Capital Expenditures in any Fiscal
Year in excess of the difference between (x) $25,000,000 (the "CONSOLIDATED NEW
BUILD CAPITAL EXPENDITURE ALLOWANCE") and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of subsection 7.3A(vi); provided that:

                           (a) the Consolidated New Build Capital Expenditure
                  Allowance for any particular Fiscal Year shall be increased to
                  (1) if the CapEx Referenced Leverage Ratio is less than
                  3.50:1.00 but greater than or equal to 3.00:1.00, $40,000,000,
                  (2) if the CapEx Referenced Leverage Ratio is less than
                  3.00:1.00 but greater than or equal to 2.50:1.00, $60,000,000
                  and (3) if the CapEx Referenced Leverage Ratio is less than
                  2.50:1.00, $75,000,000; and

                           (b) the Consolidated New Build Capital Expenditure
                  Allowance for any particular Fiscal Year shall be increased by
                  an amount equal to (1) if the CapEx Referenced Leverage Ratio
                  is greater than or equal to 3.50:1.00, the first $25,000,000
                  of Retained Proceeds Available for CapEx or (2) if the CapEx
                  Referenced Leverage Ratio is less than 3.50:1.00, 100% of
                  Retained Proceeds Available for CapEx;

                      (ii) Notwithstanding subsection 7.13B(i), Company and its
Subsidiaries may make, during the Fiscal Year ending February 28, 2003, the
Scheduled 2003 New Build Capital Expenditures.

                  C. Maximum Off-Balance Sheet New Build Capital Expenditures.
Company shall not permit any of its Off-Balance Sheet Subsidiaries to incur
Off-Balance Sheet New Build Capital Expenditures in any Fiscal Year in an amount
exceeding 150% of the Consolidated New Build Capital Expenditure Allowance for
such Fiscal Year.

                  D. Maximum Aggregate New Build Capital Expenditures.
Notwithstanding anything in subsection 7.13B or 7.13C to the contrary, Company
shall not, and shall not permit any of its Subsidiaries to, incur New Build
Capital Expenditures during any Fiscal Year in an aggregate amount in excess of
(i) if the CapEx Referenced Leverage Ratio is equal to or greater than
3.50:1.00, the difference between (x) $75,000,000 and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of

                                      106
<PAGE>
subsection 7.3(A)(vi) or (ii) if the CapEx Referenced Leverage Ratio is less
than 3.50:1.00, the difference between (x) $100,000,000 and (y) the sum of the
Investment/Acquisition Expenditure Amount for such Fiscal Year and the aggregate
amount of Investments made by Company and its Subsidiaries pursuant to clause
(d) of subsection 7.3(A)(vi) (the maximum amount permitted in the foregoing
clause (i) or (ii), the "AGGREGATE CAPITAL EXPENDITURE LIMIT"); provided that if
the aggregate amount of New Build Capital Expenditures made in any Fiscal Year
is less than the amount set forth in the forgoing clause (i) or (ii), as
applicable, then the Aggregate Capital Expenditure Limit for the immediately
succeeding Fiscal Year shall be increased (a) if the CapEx Referenced Leverage
Ratio for such succeeding Fiscal Year is equal to or greater than 3.50:1.00, the
first $25,000,000 of such difference or (b) if such CapEx Referenced Leverage
Ratio is less than 3.50:1.00, by the first $40,000,000 of such difference.

                  7.14 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED
INDEBTEDNESS AND ORGANIZATIONAL DOCUMENTS.

                  A. Company shall not, nor shall it permit any of its
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness (or any documents, instruments or agreements pursuant to which such
Subordinated Indebtedness is issued) or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on such Subordinated Indebtedness, change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate any such event of default or increase
any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions thereof (or
of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change, together
with all other amendments or changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness (or a trustee or other representative
on their behalf) which would be adverse to any Loan Party, Administrative Agent
or any Lender.

                  B. Company shall not, and shall not permit any of its
Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, its Certificate or Articles of Incorporation, Certificate
of Formation, Bylaws, Operating Agreement, Limited Liability Company Agreement,
Certificate of Limited Partnership, Agreement of Limited Partnership or other
organizational documents (other than amendments or waivers that individually, or
together with all other amendments and waivers made, would not be adverse to any
Loan Party, Administrative Agent or any Lender) without, in each case, obtaining
the written consent of Administrative Agent and Requisite Lenders to such
amendment or waiver.

                  7.15 CCAA PLAN OF ARRANGEMENT.

                  Company shall not permit the aggregate amount of Cash used to
pay allowed claims of Persons that are not Affiliates of Cineplex Odeon under
the CCAA Plan of Arrangement to exceed $30,000,000.

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<PAGE>
SECTION 8. EVENTS OF DEFAULT

         If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:

                  8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.

                  Failure by Company to pay any installment of principal on any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
Company to pay any interest on any Loan or any fee or any other amount due under
this Agreement within five days after the date due; or

                  8.2 DEFAULT IN OTHER AGREEMENTS.

                  (i) Failure of Company or any of its Subsidiaries to pay when
due any principal of or interest on one or more items of Indebtedness (other
than Indebtedness referred to in subsection 8.1) or Contingent Obligations in an
individual principal amount of $5,000,000 or the Equivalent Amount in any other
currency or more or with an aggregate principal amount of $10,000,000 or the
Equivalent Amount in any other currency or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by Company or any
of its Subsidiaries with respect to any other material term of (a) one or more
items of Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above or (b) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness
or Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or

                  8.3 BREACH OF CERTAIN COVENANTS.

                  Failure of Company to perform or comply with any term or
condition contained in subsection 2.4, 2.5, 6.2, 6.11, 6.15 or Section 7 of this
Agreement; or

                  8.4 BREACH OF WARRANTY.

                  Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Term Loan Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or

                  8.5 OTHER DEFAULTS UNDER TERM LOAN DOCUMENTS.

                  Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Term
Loan Documents, other than any such term referred to in any other subsection of
this Section 8, and such default shall not have been remedied or waived within
30 days after the earlier of (i) an officer of such Loan Party becoming

                                      108
<PAGE>
aware of such default or (ii) receipt by Company or such Subsidiary of notice
from Administrative Agent or any Lender of such default; or

                  8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

                  (i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its Significant
Subsidiaries in an involuntary case or similar proceeding under the Bankruptcy
Code or under any other Insolvency Laws which decree or order is not stayed; or
any other similar relief shall be granted under any applicable Insolvency Laws;
or (ii) an involuntary case or similar proceeding shall be commenced against
Company or any of its Significant Subsidiaries under the Bankruptcy Code or
under any other Insolvency Laws; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Company or any of its Significant Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment or similar proceeding of an interim receiver, trustee or
other custodian of Company or any of its Significant Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Significant Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days without being
dismissed, bonded or discharged; or

                  8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

                  (i) Company or any of its Significant Subsidiaries shall have
an order for relief entered with respect to it or commence a voluntary case or
similar proceeding under the Bankruptcy Code or under any other Insolvency Laws,
or shall consent to the entry of an order for relief in an involuntary case or
similar proceeding, or to the conversion of an involuntary case or similar
proceeding to a voluntary case or similar proceeding, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Company or
any of its Significant Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Company or any of its Significant Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of Company or any
of its Significant Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or

                  8.8 JUDGMENTS AND ATTACHMENTS.

                  Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5,000,000
or the Equivalent Amount in any other currency or (ii) in the aggregate at any
time an amount in excess of $10,000,000 or the Equivalent Amount in any other
currency (in either case not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against Company or any of its Significant Subsidiaries or any
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or

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                  8.9 DISSOLUTION.

                  Any order, judgment or decree shall be entered against Company
or any of its Significant Subsidiaries decreeing the dissolution or split up or
similar proceeding of Company or that Significant Subsidiary and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or

                  8.10 EMPLOYEE BENEFIT PLANS.

                  There shall occur one or more ERISA Events which individually
or in the aggregate results in or would reasonably be expected to result in
liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $15,000,000 or the Equivalent Amount in any other
currency during the term of this Agreement; or there shall exist an amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $20,000,000 or the Equivalent Amount in any
other currency; or

                  8.11 CHANGE IN CONTROL.

                  There shall have occurred a Change of Control; or

                  8.12 INVALIDITY OF SUBSIDIARY GUARANTY.

                  The Subsidiary Guaranty for any reason, other than the
satisfaction in full of all Obligations or the release of the Subsidiary
Guaranty in accordance with its terms and the terms of this Agreement, ceases to
be in full force and effect (other than in accordance with its terms) or is
declared to be null and void, or any Loan Party denies that it has any further
liability, including, without limitation, with respect to future advances by
Lenders, under any Term Loan Document to which it is a party, or gives notice to
such effect; or

                  8.13 FAILURE OF SECURITY.

                  Any Collateral Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral in
accordance with the terms thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Loan Party, or
Collateral Agent shall not have or cease to have a valid and perfected Second
Priority security interest in the Collateral securing the Obligations (other
than as a result of a failure by the relevant recording office to record or to
register any material Closing Date Mortgage or Additional Mortgage (such
materiality to be determined individually and in the aggregate):

                  THEN (i) upon the occurrence of any Event of Default described
in subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Company,
and the obligation of each Lender to make any Loan shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of

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Requisite Lenders, by written notice to Company, declare all or any portion of
the amounts described in clauses (a) through (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, shall thereupon terminate.

                  Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended to
benefit Company and do not grant Company the right to require Lenders to rescind
or annul any acceleration hereunder, even if the conditions set forth herein are
met.

SECTION 9. ADMINISTRATIVE AGENT

                  9.1 APPOINTMENT.

                  BTCo is hereby appointed Administrative Agent and Collateral
Agent hereunder by each Lender and each Lender hereby authorizes Administrative
Agent to act hereunder and under the other Term Loan Documents (including
without limitation the Subsidiary Guaranty, the Collateral Documents and the
Intercreditor Agreement) and authorizes Collateral Agent to act under the Term
Loan Documents (including, without limitation, the Subsidiary Guaranty, the
Collateral Documents and the Intercreditor Agreement). Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the
other Term Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Administrative Agent and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties as Administrative Agent under this
Agreement, Administrative Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
For the purposes of holding any security granted by any of Company or its
Subsidiaries pursuant to the laws of the Province of Quebec, Collateral Agent is
hereby appointed by each Lender as the holder of an irrevocable power of
attorney or fonde de pouvoir (within the meaning of Article 2692 of the Civil
Code of Quebec) for all present and future Lenders, and Collateral Agent hereby
accepts such appointment. By executing an Assignment Agreement, any future
Lender shall be deemed to ratify the power of attorney or fonde de pouvoir
(within the meaning of Article 2692 of the Civil Code of Quebec) granted to
Collateral Agent hereunder.

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                  9.2 POWERS AND DUTIES; GENERAL IMMUNITY.

                  A. Powers; Duties Specified. Each Lender irrevocably
authorizes Administrative Agent to take such action on such Lender's behalf and
to exercise such powers, rights and remedies hereunder and under the other Term
Loan Documents as are specifically delegated or granted to Administrative Agent
by the terms hereof and thereof, together with such powers, rights and remedies
as are reasonably incidental thereto. Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Term Loan Documents. Administrative Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees, including, without limitation, appointing an agent to act as
collateral agent in any jurisdiction where such appointment is necessary or
desirable to comply with local law. Administrative Agent shall not have, by
reason of this Agreement or any of the other Term Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Term Loan Documents, expressed or implied, is intended to or shall be
so construed as to impose upon Administrative Agent any obligations in respect
of this Agreement or any of the other Term Loan Documents except as expressly
set forth herein or therein.

                  B. No Responsibility for Certain Matters. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Term Loan Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statements or in any financial or other statements, instruments, reports
or certificates or any other documents furnished or made by Administrative Agent
to Lenders or by or on behalf of Company to Administrative Agent or any Lender
in connection with the Term Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of Company or any
other Person liable for the payment of any Obligations, nor shall Administrative
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Term Loan Documents or as to the use of the proceeds of the Loans or
the use of the Letters of Credit or as to the existence or possible existence of
any Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, Administrative Agent shall not have
any liability arising from confirmations of the amount of outstanding Loans or
the Letter of Credit Usage or the component amounts thereof.

                  C. Exculpatory Provisions. Neither Administrative Agent nor
any of its officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by Administrative Agent or any other agent under
or in connection with any of the Term Loan Documents except to the extent caused
by Administrative Agent's gross negligence or willful misconduct. If
Administrative Agent shall request instructions from Lenders with respect to any
act or action (including the failure to take an action) in connection with this
Agreement or any of the other Term Loan Documents, Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until
Administrative Agent shall have received instructions from Requisite Lenders.
Without prejudice to the generality of the foregoing, (i) Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on

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opinions and judgments of attorneys (who may be attorneys for Company and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Term
Loan Documents in accordance with the instructions of Requisite Lenders.
Administrative Agent shall be entitled to refrain from exercising any power,
discretion or authority vested in it under this Agreement or any of the other
Term Loan Documents unless and until it has obtained the instructions of
Requisite Lenders.

                  D. Administrative Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company or any of its Subsidiaries for services in connection with this
Agreement and otherwise without having to account for the same to Lenders.

                  9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.

                  Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.

                  9.4 RIGHT TO INDEMNITY.

                  Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent, to the extent that Administrative
Agent shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Administrative Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Term
Loan Documents or otherwise in its capacity as Administrative Agent in any way
relating to or arising out of this Agreement or the

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other Term Loan Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished to
Administrative Agent for any purpose shall, in the opinion of Administrative
Agent, be insufficient or become impaired, Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.

                  9.5 SUCCESSOR AGENT.

                  Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Company, and Administrative Agent
may be removed at any time with cause by an instrument or concurrent instruments
in writing delivered to Company and Administrative Agent and signed by Requisite
Lenders. Upon any such notice of resignation or any such removal, Requisite
Lenders shall have the right, upon five Business Days' notice to Company, to
appoint a successor Administrative Agent to the retiring or removed
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent to the retiring or removed
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as an Administrative Agent, the provisions of this Section
9 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement.

                  9.6 INTERCREDITOR AGREEMENT; COLLATERAL DOCUMENTS AND
SUBSIDIARY GUARANTY.

                  Each Lender hereby authorizes Administrative Agent and
Collateral Agent to enter into the Intercreditor Agreement on behalf of and for
the benefit of that Lender, and agrees to be bound by the terms of the
Intercreditor Agreement. Collateral Agent shall be entitled to all limitations
on liability and indemnification set forth in the Intercreditor Agreement, and
each Lender acknowledges it has provided such benefits to the Collateral Agent
to the extent such Lender is a "Secured Party" under the Intercreditor
Agreement. Each Lender hereby further authorizes Collateral Agent to enter into
each Collateral Document as secured party on behalf of and for the benefit of
Lenders and agrees to be bound by the terms of each Collateral Document;
provided that, subject to any provision of subsection 10.6 requiring the consent
of any additional Lenders, Collateral Agent shall not enter into or consent to
any amendment, modification, termination or waiver of any provision contained in
any Collateral Document, the Intercreditor Agreement or the Subsidiary Guaranty
without the prior consent of Administrative Agent (acting on behalf of Requisite
Lenders), but Collateral Agent may (i) release any Lien covering any items of
Collateral that are the subject of a sale or other disposition of assets
permitted by this Agreement or to which Requisite Lenders have consented and
(ii) release any Subsidiary Guarantor from the Subsidiary Guaranty if all of the
capital stock of such Subsidiary Guarantor is sold to a Person that is not any
Affiliate of Company pursuant to a sale or other disposition permitted hereunder
or to which Requisite Lenders have consented. Anything contained in any of the
Term Loan Documents to the contrary notwithstanding, each Lender agrees that no
Lender

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shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce the Subsidiary Guaranty, it being
understood and agreed that all rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Collateral
Agent for the benefit of Lenders in accordance with the terms of the Collateral
Documents and the Intercreditor Agreement.

SECTION 10. MISCELLANEOUS

                  10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.

                  A. General. Subject to subsection 10.1B, each Lender shall
have the right at any time to (i) sell, assign or transfer to any Eligible
Assignee, or (ii) sell participations to any Person in any Loan or Loans made by
it or any other interest herein or in any other Obligations owed to it; provided
that no such sale, assignment, transfer or participation shall, without the
consent of Company, require Company to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided
further that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an appropriate Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); provided still further that no Lender shall sell any participation to
a Person that is unable to comply with the requirements of subsection
2.7B(iii)(a). Except as otherwise provided in this subsection 10.1, no Lender
shall, as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of the Loans or the other Obligations owed to
such Lender.

                  B. Assignments.

                      (i) Amounts and Terms of Assignments. Each Loan or other
Obligation may (a) be assigned in any amount to another Lender, or to an
Affiliate or Affiliated Fund of the assigning Lender or another Lender, with the
giving of notice to Company and Administrative Agent or (b) be assigned in an
aggregate amount of not less than $1,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Loans and other Obligations of the
assigning Lender) to any other Eligible Assignee with the consent of
Administrative Agent (which consent shall not be unreasonably withheld) and, so
long as no Event of Default shall have occurred and be continuing, Company
(which consent shall not be unreasonably withheld); provided that it is hereby
acknowledged and agreed that (x) Company's right to consent to a proposed
assignment shall be limited to whether or not the proposed assignee is an
Eligible Assignee. To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be relieved of its
obligations with respect to its Loans or other Obligations or the portion
thereof so assigned. The parties to each such assignment shall execute and
deliver to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and recordation
fee of $3,500 and such forms, certificates or other evidence, if any, with
respect to United States federal income Tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to Administrative
Agent and Company pursuant to subsection 2.7B(iii)(a). Upon such execution,
delivery, acceptance and recordation, from and after the effective date
specified in

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such Assignment Agreement, (y) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment Agreement, shall have the rights and obligations
of a Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights and be released from its
obligations under this Agreement, subject to subsection 10.9B (and, in the case
of an Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). The Restructured Term Loan Commitments hereunder shall be
modified to reflect the Restructured Term Loan Commitment of such assignee and
any remaining Restructured Term Loan Commitment of such assigning Lender and, if
any such assignment occurs after the issuance of the Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative
Agent for cancellation, and thereupon new Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of Exhibit III-A or
Exhibit III-B annexed hereto, as the case may be, with appropriate insertions,
to reflect the Loans, of the assignee and/or the assigning Lender.

                      (ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection 10.1B(i) and
any forms, certificates or other evidence with respect to Tax withholding
matters that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment evidenced
thereby (in each case to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence any
required consent of Administrative Agent to such assignment), (b) record or
cause the recordation of the information contained therein in the Register, and
(c) give prompt notice thereof to Company. Administrative Agent shall maintain a
copy of each Assignment Agreement delivered to and accepted by it as provided in
this subsection 10.1B(ii).

                      (iii) If any Lender shall be or become a Competitor, then
Company shall have the right but not the obligation, upon notice to such Lender
and the Administrative Agent, to replace such Lender with an Eligible Assignee
(a "REPLACEMENT LENDER") acceptable to Company and the Administrative Agent
(such consent not to be unreasonably withheld or delayed; provided that no such
consent shall be required if the Replacement Lender is an existing Lender).
Subject to the preceding sentence, each such Lender which is a Competitor hereby
agrees to transfer and assign all of its Restructured Term Loan Commitments,
Loans or other Obligations owed to it to such Replacement Lender in accordance
with subsection 10.1B(i) and (ii); provided, however, that (a) such assignment
shall be without recourse, representation or warranty (other than to the effect
that such Lender owns the Restructured Term Loan Commitments and Loans or other
Obligations being assigned, free and clear of any Liens) and (b) the purchase
price paid by the Replacement Lender shall be in the aggregate amount of such
Lender's Loans, together with all accrued and unpaid interest and fees in
respect thereof, plus all other amounts, owing to such Lender hereunder. Upon
any such termination or assignment, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of any provisions of this
Agreement which by their terms survive the termination of this Agreement.

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                      (iv) Upon the effective date of an assignment described in
clause (iii), Company shall issue a replacement Note or Notes, as the case may
be, to such Replacement Lender and such Replacement Lender shall become a
"Lender" for all purposes under this Agreement and the other Term Loan
Documents.

                  C. Participations. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
and all amounts payable by Company hereunder (including, without limitation,
amounts payable to such Lender pursuant to subsections 2.6D and 2.7) shall be
determined as if such Lender had not sold such participation. Company and each
Lender hereby acknowledges and agrees that, solely for purposes of subsections
10.4 and 10.5, (a) any participation will give rise to a direct obligation of
Company to the participant and (b) the participant shall be considered to be a
"Lender."

                  D. Assignments to Federal Reserve Banks and Trustees. In
addition to the assignments and participations permitted under the foregoing
provisions of this subsection 10.1, any Lender may assign and pledge all or any
portion of its Loans, the other Obligations owed to such Lender, and its Notes
to (i) any Federal Reserve Bank as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve Bank and (ii) if such Lender is a fund,
(A) the trustee of such Lender as collateral security for the benefit of such
Lender's investors or (B) to a collateral agent providing credit or credit
support to such Lender; provided that (x) no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any such assignment and pledge and (y) in no event shall such Federal Reserve
Bank or trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.

                  E. Information. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.

                  10.2 EXPENSES.

                  Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Term Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the reasonable
costs of furnishing all opinions by counsel for Company (including, without
limitation, any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Term Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Administrative Agent
and Collateral Agent (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Term Loan Documents and any consents, amendments, waivers or other

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modifications thereto and any other documents or matters requested by Company;
(iv) all the actual costs and reasonable expenses of creating and perfecting
Liens in favor of Collateral Agent on behalf of Lenders pursuant to the Term
Loan Documents, including without limitation costs of conducting record
searches, examining Collateral, opening bank accounts and lockboxes, depositing
checks, receiving and transferring funds (including charges for checks for which
there are insufficient funds), and fees and Taxes in connection with the filing
of financing statements, costs of preparing and recording Term Loan Documents,
fees and expenses of counsel for providing such opinions as Administrative
Agent, Collateral Agent or Requisite Lenders may reasonably request, and fees
and expenses of legal counsel to Administrative Agent; (v) all other actual and
reasonable costs and expenses incurred by Administrative Agent and Collateral
Agent in connection with the negotiation, preparation and execution of the Term
Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (vi) after the occurrence
of an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent, Collateral Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Term Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.

                  10.3 INDEMNITY.

                  In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Administrative Agent
and Lenders, and the officers, directors, employees, agents and affiliates of
Administrative Agent and Lenders (collectively called the "INDEMNITEES") from
and against any and all other liabilities, obligations, losses, damages, Covered
Taxes, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including, without limitation, securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of this Agreement or the other Term Loan Documents or the
transactions contemplated hereby or thereby (including, without limitation,
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds of any of the Loans) or the statements contained in the commitment
letter delivered by any Lender to Company with respect thereto (collectively
called the "INDEMNIFIED LIABILITIES"); provided, however, that Company shall not
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay

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and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.

                  Without limiting the generality of the foregoing, Company
further agrees to fully and promptly pay, perform, discharge, defend (subject to
Indemnitee's selection of counsel), indemnify and hold harmless each Indemnitee
from and against any Indemnified Environmental Liabilities; provided that
Company shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Environmental Liabilities to the extent such Indemnified
Environmental Liabilities arise from the gross negligence or willful misconduct
of that Indemnitee as determined by a final judgment of a court of competent
jurisdiction. To the extent that the undertaking to defend, indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Company shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Environmental Liabilities
incurred by the Indemnitees or any of them. As used herein, "INDEMNIFIED
ENVIRONMENTAL LIABILITIES" means any liabilities, obligations, losses, damages
(including, without limitation, natural resource damages), penalties, actions,
judgments, suits, claims (including Environmental Claims), costs (including,
without limitation, the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation, or other response action necessary to
remove, remediate, clean up, or abate any Hazardous Materials or any activity
relating to Hazardous Materials that is in violation of any Environmental Laws
or that presents a material risk of giving rise to an Environmental Claim),
expenses and disbursements of any kind or nature whatsoever, whether direct,
indirect or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including, without limitation, securities
and commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of: (i) any Release, threatened Release or disposal of any
Hazardous Materials at any of the Facilities; (ii) the Release, threatened
Release, or disposal at any location of any Hazardous Materials generated at or
originating from any of the Facilities by or at the direction of Company or any
of its Subsidiaries; (iii) any Environmental Claim in connection with any of the
Facilities; or (iv) the operation of or violation of any Environmental Law at
any of the Facilities.

                  10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.

                  In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and after
consultation with Administrative Agent each Lender is hereby authorized by
Company at any time or from time to time, without prior notice to Company or to
any other Person, any such prior notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts) and any
other Indebtedness at any time held or owing by that Lender to or for the credit
or the account of Company against and on account of the obligations and
liabilities of Company to that Lender under this Agreement and the other Term
Loan Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement or any other Term
Loan Document, irrespective of whether or not (i) that

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Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Section 8 and although said obligations and liabilities,
or any of them, may be contingent or unmatured. Company hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.

                  10.5 RATABLE SHARING.

                  Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Term Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code or under any other Insolvency Laws, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to that Lender from Company hereunder or
under the other Term Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE
FROM COMPANY" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due From Company to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due From Company to the other Lenders so that all such
recoveries of Aggregate Amounts Due From Company shall be shared by all Lenders
in proportion to the Aggregate Amounts Due From Company to them; provided that
if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.

                  10.6 AMENDMENTS AND WAIVERS.

                  A. Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or of the Notes, and no
consent to any departure by Company or any of its Subsidiaries therefrom, shall
in any event be effective without the written concurrence of Company and
Requisite Lenders; provided that (i) any such amendment, modification,
termination, waiver or consent which: increases the amount of any of the
Restructured Term Loan Commitments or reduces the principal amount of any of the
Loans; changes in any manner the definitions of "Pro Rata Share," "Requisite
Lenders" or "Requisite Class Lenders" (it being understood that, with the
consent of Requisite Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of Pro Rata Share, Requisite
Lenders and Requisite Class Lenders on substantially the same basis as the
extensions of credit set forth in this Agreement on the date hereof); changes in
any manner any

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provision of this Agreement which, by its terms, expressly requires the approval
or concurrence of all Lenders; waives, reduces or postpones any scheduled
installment of principal of any of the Loans; waives (other than pursuant to
subsection 2.4B(iii)(f)), reduces or postpones the date on which any interest or
any fees are payable to Lenders; decreases the interest rate borne by any of the
Loans (other than any waiver of any increase in the interest rate applicable to
any of the Loans pursuant to subsection 2.2E) or the amount of any fees payable
to Lenders hereunder; increases the maximum duration of Interest Periods
permitted hereunder; releases any Lien granted in favor of Collateral Agent with
respect to all or substantially all of the Collateral (except as expressly
provided in the Term Loan Documents); or releases any Loan Party from its
obligations under the Subsidiary Guaranty in each case other than in accordance
with the terms of the Term Loan Documents or changes in any manner the
provisions contained in subsection 8.1 or this subsection 10.6 shall be
effective only if evidenced by a writing signed by or on behalf of all Lenders
affected thereby, provided, however, that no such amendment, modification,
termination, waiver or consent shall increase the Restructured Term Loan
Commitments of a Lender over the amount hereof then in effect without the
consent of such Lender. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent, Requisite Lenders and Company, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the concurrence of the Lender which is the holder of that
Note; (iii) no amendment, modification, termination or waiver of any provision
of Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of Administrative Agent shall be
effective without the written concurrence of Administrative Agent; and (iv) no
amendment, modification, termination or waiver of any provision of subsection
2.4 which has the effect of (x) extending or reducing any interim scheduled
payments applicable to either Class or (y) changing any interim scheduled
payments or voluntary and mandatory prepayments, applicable to either Class (the
"AFFECTED CLASS") in a manner that disproportionately disadvantages such Class
relative to the other Class, shall be effective without the written concurrence
of Requisite Class Lenders of such Class or such Affected Class (it being
understood and agreed that any amendment, modification, termination or waiver of
voluntary or mandatory prepayment, from those set forth in subsection 2.4 with
respect to one Class but not the other Class shall be deemed to disadvantage
such one Class but not to disproportionately disadvantage such other Class for
purposes of this clause (iv)). Administrative Agent may, but shall have no
obligation to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.

                  B. Replacement of Lender. If, in connection with any proposed
change, waiver, discharge or termination to any of the provisions of this
Agreement as contemplated by the first proviso to subsection 10.6A, the consent
of the Requisite Lenders is obtained but the consent of one or more of such
other Lenders whose consent is required is not obtained, then Company shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clauses (A) or (B) below, to either
(A) replace each such non-

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consenting Lender or Lenders with one or more Persons satisfying the
requirements of the definition of Eligible Assignee (each such Person being a
"REPLACEMENT LENDER") so long as at the time of such replacement each
outstanding Loan and other Obligation owed to each such Lender being replaced is
repaid in full and so long as each such Replacement Lender consents to the
proposed change, waiver, discharge or termination or (B) terminate such
non-consenting Lender's Restructured Term Loan Commitments and/or repay in full
each outstanding Loan and other Obligations owed to such Lender; provided that,
unless the Restructured Term Loan Commitments that are terminated, and Loans and
other Obligations repaid, pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of the Restructured Term Loan Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Requisite Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto; provided further that in any event Company shall not have the
right to replace a Lender, terminate its Restructured Term Loan Commitments or
repay its Loans and other Obligations owed to such Lender solely as a result of
the exercise of such Lender's rights (and the withholding of any required
consent by such Lender) pursuant to the first proviso to subsection 10.6A.

                  10.7 INDEPENDENCE OF COVENANTS.

                  All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.

                  10.8 NOTICES.

                  Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
or Canadian mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States or
Canadian mail with postage prepaid and properly addressed; provided that notices
to Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on Schedule 2.1 or (i) as to Company and Administrative Agent, such
other address as shall be designated by such Person in a written notice
delivered to the other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a written notice delivered
to Administrative Agent.

                  10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

                  A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.

                  B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Company set forth in subsections 2.6D,
2.7, 10.2, 10.3 and 10.4 and the

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agreements of Lenders set forth in subsections 9.2C, 9.4, 10.5 and 10.19
shall survive the payment of the Loans and the termination of this Agreement.

                  10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

                  No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Term Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Term Loan
Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

                  10.11 MARSHALLING; PAYMENTS SET ASIDE.

                  Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.

                  10.12 SEVERABILITY.

                  In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

                  10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS'
RIGHTS.

                  The obligations of Lenders hereunder are several, and no
Lender shall be responsible for the obligations or Restructured Term Loan
Commitments of any other Lender hereunder. Nothing contained herein or in any
other Term Loan Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

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                  10.14 HEADINGS.

                  Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

                  10.15 APPLICABLE LAW.

                  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

                  10.16 SUCCESSORS AND ASSIGNS.

                  This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the permitted successors and permitted assigns of Lenders (it
being understood that Lenders' rights of assignment are subject to subsection
10.1). None of Company's rights or obligations hereunder nor any interest
therein may be assigned or delegated by Company without the prior written
consent of all Lenders.

                  10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

                  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TERM LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT, SUCH OTHER TERM LOAN DOCUMENT OR SUCH OBLIGATION. Company hereby
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Company at
its address provided in subsection 10.8, such service being hereby acknowledged
by Company to be sufficient for personal jurisdiction in any action against
Company in any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Lender to bring
proceedings against Company in the courts of any other jurisdiction.

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                  10.18    WAIVER OF JURY TRIAL.

                  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER TERM LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER TERM LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.

                  10.19 CONFIDENTIALITY.

                  Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by Company that in any event a Lender may after the proposed recipient of such
information has agreed in writing to be bound by this subsection 10.19, make
disclosures to Affiliates (other than any Affiliate that is a Competitor) of
such Lender or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or
disclosures required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.

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                  10.20 COUNTERPARTS; EFFECTIVENESS.

                  This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of Company and Administrative Agent and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.

                  [Remainder of page intentionally left blank]

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                               TERM LOAN AGREEMENT

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                              COMPANY:

                              LOEWS CINEPLEX ENTERTAINMENT CORPORATION

                              By:         /s/
                                  ______________________________________________
                                      Name:
                                     Title:

                              Notice Address:

                              711 Fifth Avenue, 11th Floor
                              New York, New York 10022
                              Attention:  Lawrence J. Ruisi, President and
                                           Chief Executive Officer

                              With a copy to:

                              Loews Cineplex Entertainment Corporation
                              711 Fifth Avenue, 11th Floor
                              New York, New York 10022
                              Attention:  John C. McBride, Jr., General Counsel

                                      S-1
<PAGE>
                              LENDERS:

                              BANKERS TRUST COMPANY,
                              as Administrative Agent and as a Lender

                              By:         /s/
                                  ______________________________________________
                                      Name:
                                     Title:

                              Notice Address:

                              31 West 52nd Street
                              New York, New York 100019
                              Attention: Gregory Shefrin
                              Telephone: (646) 324-2185
                              Facsimile: (646) ____________

                                      S-2

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