THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of June 6, 2003 (the "Closing Date") between United Artists Theatre Circuit, Inc., a Maryland corporation ("Seller"), and United Artists Theatre Group, a Delaware corporation ("Buyer").

        WHEREAS, Seller operates the movie theatres identified on Schedule 1 attached hereto (the "Theatres");

        WHEREAS, in connection with its operation of the Theatres, Seller is the owner of the Theatre Assets (defined below); and

        WHEREAS, Seller desires to sell, and Buyer desires to purchase from Seller, all of the Theatre Assets at the price and upon the terms and conditions hereinafter set forth.

        NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

1.     DEFINITIONS

        For all purposes of this Agreement, the capitalized terms specified in Exhibit A shall have the meanings set forth in that Exhibit A, except as otherwise expressly provided herein.

2.     SALE AND PURCHASE OF ASSETS

2.1.  Sale and Purchase of Assets

        On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions hereof, Seller agrees to sell, transfer and assign to Buyer, and Buyer agrees to purchase, accept and assume from Seller, the Theatre Assets at the purchase price specified in Section 2.4 free and clear of all Encumbrances.

2.2.  Assumption of Liabilities

        At the Closing, Buyer shall assume the Assumed Liabilities to be performed on or after the Closing Date.

2.3.  Excluded Liabilities

        Except for the Assumed Liabilities, Buyer does not assume, and shall not be deemed by virtue of this Agreement or any other action or inaction to assume, and Seller shall remain liable for any liability or obligation, direct or indirect, absolute or contingent, of Seller or any Subsidiary, division, associate or Affiliate of Seller, or of any Person, arising out of or relating to (i) Taxes with respect to or attributable to the Theatre Assets for all taxable periods through and including the Closing Date (including all Taxes associated with the transfer of the Theatre Assets to Buyer), (ii) Taxes with respect to or attributable to the properties, business or operations of Seller or any Subsidiary, division, associate or Affiliate of Seller, (iii) Taxes of Seller with respect to or attributable to the transactions contemplated hereby, (iv) any liability arising out of or relating to any Litigation or any other claim or cause of action relating to Seller's business, operations, assets or liabilities arising out of facts or circumstances existing prior to the Closing, or (v) any other liabilities or obligations of Seller or any Subsidiary, division, associate or Affiliate of Seller, or of any Person (collectively, the "Excluded Liabilities").

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2.4.  Purchase Price

        In consideration of the Theatre Assets, Buyer shall at the Closing pay Seller Two Hundred Ninety One Million Two Hundred Ninety Eight Thousand Six Hundred Fifty Dollars ($291,298,650.00) in immediately available funds plus the Assumed Liabilities (the "Purchase Price").

2.5.  Assignment of Theatre Leases, Contracts and Permits

        (a)   To the extent that the assignment of all or any portion of any Contract or Permit shall require the consent of the other party thereto or any other third party and such consent has not been obtained as of the Closing Date, this Agreement shall not constitute an agreement to assign any such Contract or Permit included in the Theatre Assets if an attempted assignment without any such consent would constitute a breach or violation thereof.

        (b)   If one or more of such consents have not been obtained at or prior to the Closing Date, Seller shall use its best efforts to:

        (1)   provide Buyer the benefits of each such applicable Contract and Permit;

        (2)   cooperate in any reasonable and lawful arrangement designed to provide such benefits to Buyer, without incurring any financial obligations to Buyer; and

        (3)   enforce to the fullest extent permitted by any applicable law for the account of Buyer any and all rights of Seller against all other parties thereto (including the termination of such applicable Contract or Permit, as the case may be, in accordance with the terms thereof on the advice of Buyer).

2.6.  Prorations

        (a)   Personal property taxes for the Theatre Assets for 2003 shall be prorated, based on property taxes assessed for 2002, and allocated among (i) Seller for the period prior to and including the Closing Date and (ii) Buyer for the period after the Closing Date.

        (b)   If final readings are not obtained for utility services in connection with the Theatre Leases for which the lessee is liable (such as gas, electric, water, or sewer), the charges therefore shall be prorated and allocated among (i) Seller for the period prior to and including the Closing Date and (ii) Buyer for the period after the Closing Date. All rent, Taxes, insurance and other costs payable by the lessee in connection with the Theatre Leases shall be prorated and allocated among (i) Seller for the period prior to and including the Closing Date and (ii) Buyer for the period after the Closing Date.

        (c)   Any bill, invoice or similar statement which is received after the Closing Date but which pertains to any services rendered or goods provided to Seller which is used in or for the operation of the Theatres shall be prorated and allocated among (i) Seller for the period prior to and including the Closing Date and (ii) Buyer for the period after the Closing Date.


 

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