EXCHANGE AGREEMENT

BY AND AMONG

REGAL ENTERTAINMENT GROUP

AND

THOSE PERSONS LISTED ON ANNEX I

Dated as of March 8, 2002

EXCHANGE AGREEMENT

        This EXCHANGE AGREEMENT, dated as of March 8, 2002 (this "Agreement"), is made and entered into by and among Regal Entertainment Group, a Delaware corporation (the "Company"), and those persons listed on Annex I hereto (the "Stockholders").

RECITALS

        A.    The Company and the Stockholders desire to exchange the shares of United Artists Theatre Company, a Delaware corporation ("United Artists"), Edwards Theatres, Inc., a Delaware corporation ("Edwards"), Regal Cinemas Corporation, a Delaware corporation ("Regal"), and Regal CineMedia Corporation, a Delaware corporation ("Regal CineMedia"), held by the Stockholders for capital stock of the Company.

        B.    The Company and the United Artists Warrantholders desire to exchange the United Artists Warrants for Company Warrants.

        C.    Each of the Stockholders hold the number of Shares and each of the United Artists Warrantholders hold the number of United Artists Warrants set forth opposite such Stockholders' or United Artists Warrantholders' name on Annex II hereto.

        D.    The Company and the Stockholders have determined that this Agreement shall govern the proposed exchange.

        E.    Capitalized terms used in this Agreement shall have the meanings ascribed to them in Section 6.12 of this Agreement.

AGREEMENT

        NOW, THEREFORE, in consideration of the premises, representations, warranties and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto hereby agree as follows:

ARTICLE 1
THE EXCHANGE; DELIVERY OF SHARES; CLOSING

        1.1  Signing.

        (a)  Timing. The execution of this Agreement (the "Signing") shall take place at the offices of Hogan & Hartson L.L.P., 1200 Seventeenth Street, Suite 1500, Denver, Colorado 80202, at 10:00 a.m., local time, on the date first set forth above (the "Signing Date"), or at such other time and place as the Company and the Stockholders shall mutually agree upon.

        (b)  Exchange Ratios. Annex II hereto sets forth (i) the per share exchange ratios for the United Artists Stock, the United Artists Preferred Stock, the Edwards Stock, the Regal Stock, the Regal CineMedia Stock, the outstanding options to acquire shares of common stock of United Artists, par value $0.01 per share and the outstanding options to acquire shares of common stock of Regal, par value $0.001 per share (the "Exchange Ratios"), (ii) the number of shares of Company Class A Common Stock or Company Class B Common Stock to be issued to each Stockholder at the Closing, (iii) the number of shares of Company Class A Common Stock or Company Class B Common Stock subject to Company Warrants to be issued to each United Artists Warrantholder at the Closing and (iv) the numbers of options to acquire Company Class A Common Stock to be issued at the Closing to the holders of outstanding options to acquire shares of common stock of United Artists, par value $0.01 per share and the holders of outstanding options to acquire shares of common stock of Regal, par value $0.001 per share. With respect to each option to acquire Company Class A Common Stock, the exercise price for such option shall be determined by dividing the exercise price with respect to the existing option to be converted in the Exchange by the applicable Exchange Ratio. Annex III hereto sets forth the mathematical formulas used to calculate the Exchange Ratios.

        (c)  Stockholders' Agreement. The Company and each of the Stockholders hereby agree that contemporaneously with the Signing, the Company and such Stockholders will execute and deliver the Stockholders' Agreement, which Stockholders' Agreement shall become effective only upon the Closing hereunder. If the Closing does not occur, the Stockholders' Agreement shall be of no force or effect.

        (d)  Edwards Escrow Amendment. The Edwards Stockholders hereby agree that contemporaneously with the Signing, such Edwards Stockholders will execute and deliver the Edwards Escrow Substitution & Distribution Agreement and the First Amended & Restated Escrow Agreement attached thereto. If the Closing does not occur, the Edwards Escrow Substitution & Distribution Agreement and the First Amended & Restated Escrow Agreement shall be of no force or effect.

(e)

Market Stand-Off. Each Stockholder shall execute and deliver to the Company at the Signing the market stand-off agreement in substantially the form attached hereto as Exhibit F.

        1.2  Closing.

        (a)  Timing; Issuance of Company Class A Common Stock, Company Class B Common Stock and Company Warrants. If no Reversion has occurred, upon the Closing the following shall occur in the order hereinafter prescribed but as part of one overall transaction pursuant to which Anschutz, the other holders of Edwards Stock and the other holders of Regal Stock exchange the shares described in clauses (i) through (iii) below for Company Class A Common Stock, Company Class B Common Stock or Company Warrants, as applicable: (i) the shares of United Artists Stock, the shares of United Artists Preferred Stock, the United Artists Warrants, the shares of Edwards Class A Stock, the shares of Edwards Class B Stock, the shares of Regal Stock and the shares of Regal CineMedia Stock held by Anschutz or any Affiliate thereof shall be delivered by Anschutz endorsed in blank (or accompanied by duly executed stock powers) to the Company in exchange for the issuance and delivery by the Company to Anschutz of shares of Company Class A Common Stock, Company Class B Common Stock and Company Warrants in the amounts and pursuant to the Exchange Ratios set forth on Annex II hereto, provided, however, with respect to the shares of Regal CineMedia Stock, Anschutz shall be entitled to receive that number of shares of Company Class B Common Stock determined as follows: the capital contributed by Anschutz to Regal CineMedia, plus any accrued and unpaid interest on such contribution, multiplied by 0.089768699 rounded to the nearest whole share, but in no event more than the aggregate number of shares of Company Class B Common Stock set forth across from the name of Anschutz under the Regal CineMedia column on Annex II hereto, (ii) the shares of Edwards Class A Stock and the shares of Edwards Class B Stock held by the Edwards Stockholders (other than Anschutz) shall be delivered by the Edwards Stockholders (other than Anschutz) endorsed in blank (or accompanied by duly executed stock powers) to the Company in exchange for the issuance and delivery by the Company to such Edwards Stockholders of shares of Company Class A Common Stock or Company Class B Common Stock in the amounts and pursuant to the Exchange Ratios set forth on Annex II hereto and (iii) the shares of Regal Stock held by the Regal Stockholders (other than Anschutz) shall be delivered by the Regal Stockholders (other than Anschutz) endorsed in blank (or accompanied by duly executed stock powers) to the Company in exchange for the issuance and delivery by the Company to such Regal Stockholders of shares of Company Class A Common Stock or Company Class B Common Stock in the amounts and pursuant to the Exchange Ratios set forth on Annex II hereto (collectively, the "Exchange"). The Exchange shall take place (the "Closing") at the offices of Hogan & Hartson L.L.P., 1200 Seventeenth Street, Suite 1500, Denver, Colorado 80202, at 10:00 a.m., local time, on the date that is two (2) business days following the termination of the Pre-Closing Period pursuant to Section 5.1(a) or at such other time and place as the Company and the Stockholders shall mutually agree upon in writing (the "Closing Date").

        (b)  Contribution of Additional United Artists Stock and Additional United Artists Warrants.

        (i)    From time to time after the Signing Date and the Closing Date, as applicable, the United Artists Stockholders or their Affiliates (other than the Company) may have the right to purchase or otherwise acquire shares of Additional United Artists Stock. The Company and the Stockholders hereby agree that from time to time after the Signing Date and the Closing Date, a United Artists Stockholder may, at its election, either (A) purchase or otherwise acquire shares of Additional United Artists Stock and contribute such shares of Additional United Artists Stock to the Company in exchange for shares of, at the United Artists Stockholder's option, Company Class A Common Stock or Company Class B Common Stock or (B) contribute cash to the Company in exchange for shares of, at the United Artists Stockholder's option, Company Class A Common Stock or Company Class B Common Stock and direct the Company to purchase for its account shares of Additional United Artists Stock, the purchase price for which will not exceed the amount of cash contributed by such United Artists Stockholder pursuant to this Section 1.2(b)(i). The number of shares of Company Class A Common Stock or Company Class B Common Stock issuable to the United Artists Stockholders pursuant to this Section 1.2(b)(i) shall be calculated using the Exchange Ratio with respect to the United Artists Stock, as such Exchange Ratio is set forth on Annex II hereto. The rights of the United Artists Stockholders and the obligations of the Company set forth in this Section 1.2(b)(i) shall terminate upon the Initial Public Offering.


 

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