<SUBMISSION>
<ACCESSION-NUMBER>0000891554-01-502299
<TYPE>SC 13D
<PUBLIC-DOCUMENT-COUNT>5
<FILING-DATE>20010427
<GROUP-MEMBERS>APOLLO ADVISORS IV, L.P.
<GROUP-MEMBERS>APOLLO ADVISORS V, L.P.
<GROUP-MEMBERS>APOLLO INVESTMENT FUND IV LP
<GROUP-MEMBERS>APOLLO INVESTMENT FUND V, L.P.
<GROUP-MEMBERS>APOLLO MANAGEMENT IV, L.P.
<GROUP-MEMBERS>APOLLO MANAGEMENT V, L.P.
<GROUP-MEMBERS>APOLLO OVERSEAS PARTNERS IV, L
<GROUP-MEMBERS>APOLLO OVERSEAS PARTNERS V, L.
<SUBJECT-COMPANY>
<COMPANY-DATA>
<CONFORMED-NAME>AMC ENTERTAINMENT INC
<CIK>0000722077
<ASSIGNED-SIC>7830
<IRS-NUMBER>431304369
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0401
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D
<ACT>34
<FILE-NUMBER>005-34911
<FILM-NUMBER>1614307
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>106 WEST 14TH STREET
<CITY>KANSAS CITY
<STATE>MO
<ZIP>64105
<PHONE>8164804744
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>106 WEST 14TH STREET
<CITY>KANSAS CITY
<STATE>MO
<ZIP>64105
</MAIL-ADDRESS>
</SUBJECT-COMPANY>
<FILED-BY>
<COMPANY-DATA>
<CONFORMED-NAME>APOLLO INVESTMENT FUND IV LP
<CIK>0001068331
<ASSIGNED-SIC>
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>TWO MANHATTANVILLE ROAD
<CITY>PURCHOSE
<STATE>NY
<ZIP>10577
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>TWO MANHATTANVILLE ROAD
<CITY>PURCHASE
<STATE>NY
<ZIP>10577
</MAIL-ADDRESS>
</FILED-BY>
<DOCUMENT>
<TYPE>SC 13D
<SEQUENCE>1
<FILENAME>d25605_13d.txt
<DESCRIPTION>SCHEDULE 13D
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D
                                 (Rule 13d-101)
                    Under the Securities Exchange Act of 1934

             INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
            TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
                                  RULE 13d-2(a)

                                (Amendment No. )*


                             AMC Entertainment Inc.
                                (Name of Issuer)


                   Common Stock, par value $0.662/3 per share
                         (Title of Class of Securities)


                                   001669 10 0
                                 (CUSIP Number)


                               Bruce S. Mendelsohn
                    Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                         1333 New Hampshire Avenue N.W.
                             Washington, D.C. 20036
                                 (202) 887-4000
            (Name, Address and Telephone Number of Person Authorized
                     to Receive Notices and Communications)


                                 April 20, 2001
             (Date of Event which Requires Filing of this Statement)


          If the filing person has previously  filed a statement on Schedule 13G
          to report the  acquisition  which is the subject of this Schedule 13D,
          and  is  filing   this   schedule   because   of   ss.ss.240.13d-1(e),
          240.13d-1(f) or 240.13d-1(g), check the following box .

          Note:  Schedules filed in paper format shall include a signed original
          and  five   copies   of  the   schedule,   including   all   exhibits.
          Seess.240.13d-7 for other parties to whom copies are to be sent.

          *The  remainder of this cover page shall be filled out for a reporting
          person's initial filing on this form with respect to the subject class
          of securities, and for any subsequent amendment containing information
          which would alter disclosures provided in a prior cover page.

          The information required on the remainder of this cover page shall not
          be  deemed  to be  "filed"  for  the  purpose  of  Section  18 of  the
          Securities  Exchange Act of 1934  ("Act") or otherwise  subject to the
          liabilities  of that  section  of the Act but shall be  subject to all
          other provisions of the Act.

                         Continued on following page(s)
                               Page 1 of ___Pages
                             Exhibit Index: Page ___


<PAGE>

CUSIP No. 001669 10 0                                         Page 2 of    Pages

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

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Investment Fund IV, L.P.

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

     2.   Check the Appropriate Box if a Member of a Group

          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only

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

     4.   Source of Funds          OO

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

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)        [  ]

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

     6.   Citizenship or Place of Organization          Delaware

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

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

                       7.    Sole Voting Power            0 (See footnote below)
Number of Shares    ------------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each       ------------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                ------------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
------------------- ------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares

                 [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)        39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person              PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


                      *SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE>
CUSIP No. 001669 10 0                                        Page 3 of    Pages


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

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Overseas Partners IV, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group

          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only

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

     4.   Source of Funds                               OO

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

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)                                  [  ]

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

     6.   Citizenship or Place of Organization          Cayman Islands

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

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

                       7.    Sole Voting Power            0 (See footnote below)
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares

                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11) 39.8 % (See Item 5
          below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


<PAGE>

CUSIP No. 001669 10 0                                        Page 4 of    Pages
--------------------------------------------------------------------------------

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Advisors IV, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group


          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only
--------------------------------------------------------------------------------

     4.   Source of Funds                               OO
--------------------------------------------------------------------------------

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)               [  ]
--------------------------------------------------------------------------------

     6.   Citizenship or Place of Organization          Delaware
--------------------------------------------------------------------------------

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

                       7.    Sole Voting Power            0
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)         39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


<PAGE>

CUSIP No. 001669 10 0                                        Page 5 of    Pages
--------------------------------------------------------------------------------

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Management IV, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group


          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only
--------------------------------------------------------------------------------

     4.   Source of Funds                               OO
--------------------------------------------------------------------------------

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)               [  ]
--------------------------------------------------------------------------------

     6.   Citizenship or Place of Organization          Delaware
--------------------------------------------------------------------------------

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

                       7.    Sole Voting Power            0
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)         39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      Delaware
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.



<PAGE>

CUSIP No. 001669 10 0                                        Page 6 of    Pages
--------------------------------------------------------------------------------

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Investment Fund V, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group


          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only
--------------------------------------------------------------------------------

     4.   Source of Funds                               OO
--------------------------------------------------------------------------------

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)               [  ]
--------------------------------------------------------------------------------

     6.   Citizenship or Place of Organization          Delaware
--------------------------------------------------------------------------------

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

                       7.    Sole Voting Power            0 (See footnote below)
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)         39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


<PAGE>

CUSIP No. 001669 10 0                                        Page 7 of    Pages
--------------------------------------------------------------------------------

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Overseas Partners V, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group


          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only
--------------------------------------------------------------------------------

     4.   Source of Funds                               OO
--------------------------------------------------------------------------------

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)               [  ]
--------------------------------------------------------------------------------

     6.   Citizenship or Place of Organization          Cayman Islands
--------------------------------------------------------------------------------

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

                       7.    Sole Voting Power            0 (See footnote below)
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)         39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


<PAGE>

CUSIP No. 001669 10 0                                        Page 8 of    Pages
--------------------------------------------------------------------------------

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Advisors V, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group


          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only
--------------------------------------------------------------------------------

     4.   Source of Funds                               OO
--------------------------------------------------------------------------------

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)               [  ]
--------------------------------------------------------------------------------

     6.   Citizenship or Place of Organization          Delaware
--------------------------------------------------------------------------------

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

                       7.    Sole Voting Power            0
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)         39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


<PAGE>
CUSIP No. 001669 10 0                                        Page 9 of    Pages
--------------------------------------------------------------------------------

     1.   Names of Reporting Persons.
          I.R.S. Identification Nos. of above persons (entities only).

          Apollo Management V, L.P.
--------------------------------------------------------------------------------

     2.   Check the Appropriate Box if a Member of a Group


          (a)  [  ]

          (b)  [X]
--------------------------------------------------------------------------------

     3.   SEC Use Only
--------------------------------------------------------------------------------

     4.   Source of Funds                               OO
--------------------------------------------------------------------------------

     5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
          2(d) or 2(e)               [  ]
--------------------------------------------------------------------------------

     6.   Citizenship or Place of Organization          Delaware
--------------------------------------------------------------------------------

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

                       7.    Sole Voting Power            0
Number of Shares       ---------------------------------------------------------
Shares Beneficially    8.    Shared Voting Power          0 (See footnote below)
Owned by Each          ---------------------------------------------------------
Reporting Person       9.    Sole Dispositive Power       0 (See Item 5 below)
With                   ---------------------------------------------------------
                       10.   Shared Dispositive Power     12,867,133
                                                         (See Item 5 below)
--------------------------------------------------------------------------------

     11.  Aggregate Amount Beneficially Owned by Each Reporting Person

          12,867,133 shares of Common Stock (See Item 5 below)
--------------------------------------------------------------------------------

     12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
                      [  ]
--------------------------------------------------------------------------------

     13.  Percent of Class  Represented by Amount in Row (11)         39.8 %
                                                              (See Item 5 below)
--------------------------------------------------------------------------------

     14.  Type of Reporting Person                      PN
--------------------------------------------------------------------------------

(*) The Reporting Person together with the other Reporting  Persons named herein
may be deemed to  beneficially  own shares of the  Issuer's  Series A  Preferred
Stock that are  convertible  into shares of Common  Stock as  indicated  herein,
however,  the Reporting  Person has agreed pursuant to an Investment  Agreement,
dated as of April 19, 2001, by and among the Issuer,  the Reporting Person named
on this cover page and certain other persons named in such Investment Agreement,
for a period  commencing on the Closing Date and ending on the fifth anniversary
thereof,  not to convert such Series A Preferred  Stock into Common Stock except
in connection with the disposition of such Common Stock to an unaffiliated third
party.  As such,  notwithstanding  the right of the  Reporting  Persons to elect
directors as described  herein,  the Reporting Person has no ability to exercise
voting power with respect to the Common Stock following  conversion  during such
time period.


<PAGE>

                                                                Page 10 of Pages

Item 1. Security and Issuer.

     This statement on Schedule 13D (this  "Statement"  or this "Schedule  13D")
relates to the common stock,  par value $0.662/3 per share (the "Common Stock"),
of AMC Entertainment Inc., a Delaware corporation (the "Issuer").  The principal
executive  offices  of the Issuer are  located at 106 West 14th  Street,  Kansas
City, Missouri 64141.

Item 2. Identity and Background.

     This  statement is being filed jointly on behalf of the  following  persons
(collectively,  the "Reporting  Persons"):  Apollo  Investment  Fund IV, L.P., a
Delaware limited  partnership  ("AIF IV");  Apollo Overseas Partners IV, L.P., a
Cayman Islands  exempted  limited  partnership  ("AOP IV");  Apollo Advisors IV,
L.P., a Delaware  limited  partnership  ("Advisors IV");  Apollo  Management IV,
L.P., a Delaware limited partnership  ("Management IV" and together with AIF IV,
AOP IV and Advisors IV, the "AIF IV Reporting Persons");  Apollo Investment Fund
V, L.P., a Delaware limited  partnership  ("AIF V"); Apollo Overseas Partners V,
L.P., a Cayman Islands exempted limited  partnership  ("AOP V" and together with
AIF IV, AOP IV and AIF V, the  "Apollo  Funds");  Apollo  Advisors  V,  L.P.,  a
Delaware limited  partnership  ("Advisors V"); and Apollo  Management V, L.P., a
Delaware limited partnership  ("Management V" and together with AIF V, AOP V and
Advisors V, the "AIF V Reporting Persons").

     AIF IV and AOP IV are principally  engaged in the business of investment in
securities. The general partner of AIF IV and managing general partner AOP IV is
Advisors  IV,  which is  principally  engaged in the  business of serving as the
general  partner of such entities.  The general partner of Advisors IV is Apollo
Capital Management IV, Inc., a Delaware  corporation  ("Capital Management IV"),
which is  principally  engaged in the business of serving as general  partner of
Advisors  IV.  Management  IV serves as manager of AIF IV and AOP IV and manages
their  day-to-day  operations.  AIF IV Management,  Inc. a Delaware  corporation
("AIF  Management  IV"), is the general partner of Management IV. AIF Management
IV is  principally  engaged in the  business  of  serving as general  partner to
Management IV. Apollo Fund  Administration IV, LLC, a Delaware limited liability
company  ("Administration IV"), is the administrative general partner of AOP IV.
Administration  IV  is  principally  engaged  in  the  business  of  serving  as
administrative general partner of AOP IV.

     AIF V and AOP V are  principally  engaged in the business of  investment in
securities. The general partner of AIF V and the managing general partner of AOP
V is Advisors V, which is principally  engaged in the business of serving as the
general  partner of such entities.  The general  partner of Advisors V is Apollo
Capital  Management V, Inc., a Delaware  corporation  ("Capital  Management V"),
which is  principally  engaged in the business of serving as general  partner of
Advisors V.  Management V serves as manager of AIF V and AOP V and manages their
day-to-day  operations.  AIF V  Management,  Inc. a Delaware  corporation  ("AIF
Management  V"), is the general  partner of  Management  V. AIF  Management V is
principally  engaged in the business of serving as general partner to Management
V. Apollo  Fund  Administration  V, LLC, a Delaware  limited  liability  company
("Administration   V"),  is  the


<PAGE>

                                                                Page 11 of Pages

administrative general partner of AOP V. Administration V is principally engaged
in the business of serving as administrative general partner of AOP V.

     The address of AIF IV, AOP IV, Capital  Management  IV,  Management IV, AIF
Management  IV, and  Administration  IV is c/o Apollo  Advisors  IV,  L.P.,  Two
Manhattanville Road, Purchase, New York 10577. The address of Advisors IV is Two
Manhattanville Road, Purchase, New York 10577.

     The  address  of AIF V, AOP V,  Capital  Management  V,  Management  V, AIF
Management  V,  and  Administration  V is  c/o  Apollo  Advisors  V,  L.P.,  Two
Manhattanville Road, Purchase,  New York 10577. The address of Advisors V is Two
Manhattanville Road, Purchase, New York 10577.

     Set  forth in  Schedule  1,  attached  hereto  and  incorporated  herein by
reference,   are  the  names,  business  addresses,   principal  occupation  and
citizenship of each executive  officer and director of the Reporting Persons and
other  entities as to which such  information  is required  to be  disclosed  in
response to Item 2 and General Instruction C to Schedule 13D.

     During  the  last  five  years,  none  of the  Reporting  Persons,  Capital
Management IV, AIF Management IV,  Administration  IV, Capital Management V, AIF
Management  V and  Administration  V,  or,  to  the  best  of  their  respective
knowledge,  any  executive  officer  or  director  of such  entities,  has  been
convicted in a criminal  proceeding  (excluding  traffic  violations  or similar
misdemeanors)  or has  been a  party  to a civil  proceeding  of a  judicial  or
administrative body of competent jurisdiction and as a result of such proceeding
was or is  subject  to a  judgment,  decree  or  final  order  enjoining  future
violations  of, or prohibiting  or mandating  activities  subject to, Federal or
state securities laws or finding any violation with respect to such laws.

     The filing of this Schedule 13D shall not be construed as an admission that
any  Reporting  Person is,  for the  purposes  of Section  13(d) or 13(g) of the
Securities Exchange Act of 1934, or for any other purpose,  the beneficial owner
of any shares of Common Stock other than those shares of Common Stock over which
the Reporting Person has sole voting and dispositive  power, as reported herein.
Further,  each of the Reporting Persons disclaims any pecuniary  interest in any
securities of the Issuer owned by any other Reporting Person or any other party,
and expressly disclaims the existence of a group.


Item 3. Source and Amount of Funds or Other Consideration.

     On April 20, 2001 (the  "Closing  Date"),  the Apollo  Funds  purchased  an
aggregate of 92,000 shares of the Issuer's Series A Convertible Preferred Stock,
par value $0.662/3 per share (the "Series A Preferred Stock") and 158,000 shares
of the Issuer's Series B Exchangeable  Preferred  Stock,  par value $0.662/3 per
share  (the  "Series B  Preferred  Stock"  and  collectively  with the  Series A
Preferred  Stock,  the  "Preferred  Stock") for an aggregate  purchase  price of
$250,000,000  (the "Purchase  Price").  The purchases were financed with cash on
hand from  contributions  of  partners  of each of the  Apollo  Funds.  All such
contributions  are in the  ordinary  course and  pursuant to  (equity)  investor
commitments to the respective entities.

<PAGE>

                                                                Page 12 of Pages

Item 4. Purpose of Transaction.

     Pursuant to an Investment  Agreement  dated April 19, 2001, a copy of which
is  attached  hereto as  Exhibit 2 and  incorporated  herein by  reference  (the
"Investment Agreement"),  the Apollo Funds acquired from the Issuer an aggregate
of 92,000  shares of Series A  Preferred  Stock and  158,000  shares of Series B
Preferred  Stock. The purpose of the transaction was to facilitate an investment
in the Issuer.

     The following is a description of certain terms of the Preferred Stock:

     Conversion  of Series A  Preferred  Stock.  At any time after the shares of
Common Stock issuable upon conversion of the Series A Preferred Stock, including
the shares of Series A  Preferred  Stock  issued  upon  exchange of the Series B
Preferred Stock (the "Conversion Shares"), sold on the Closing Date are approved
for listing on the American  Stock  Exchange,  the holders of Series A Preferred
Stock may convert their shares of Series A Preferred  Stock (subject to the last
sentence of this  paragraph),  in whole or in part, into Common Stock at a price
of $7.15  per  share of  Common  Stock  (the  "Conversion  Price")  (subject  to
adjustments  noted  below)  with each share of Series A  Preferred  Stock  being
valued at the then  current  Series A  Preferred  Stock  liquidation  preference
amount.  The  Conversion  Price  shall be  adjusted  to  reflect  any  corporate
reorganizations,    mergers,    stock    dividends,    stock    splits,    stock
reclassifications,  or stock combinations.  Notwithstanding  the foregoing,  the
Apollo Funds  agreed in the  Investment  Agreement  not to convert any shares of
Series A  Preferred  Stock  into  Common  Stock  until  April  2006,  except  in
connection with certain dispositions to third parties.

     Exchange of Series B  Preferred  Stock for Series A  Preferred  Stock.  The
Series B Preferred  Stock will  automatically  exchange  into Series A Preferred
Stock if and when the  stockholders  of the Issuer  approve an  amendment to the
Issuer's Certificate of Incorporation increasing the number of authorized shares
of Common  Stock to allow for the  conversion  of Series A Preferred  Stock into
Common Stock,  including  those shares of Series A Preferred Stock received as a
result of the exchange of Series B Preferred Stock into Series A Preferred Stock
(the "Shareholder Approval") and upon receipt of HSR Approval (as defined in the
Certificate of Designations).  Upon receipt of such Shareholder Approval and HSR
Approval,  each  share  of  Series B  Preferred  Stock  shall  be  automatically
exchanged for an equal number of shares of Series A Preferred  Stock.  Under the
Investment Agreement, the Issuer is required to seek Shareholder Approval at its
next regularly scheduled annual meeting (the "Initial Solicitation") which shall
take place no later than 270 days after the Closing Date.

     Liquidation  Preference.  The Series A  Preferred  Stock has a  liquidation
preference  equal to the greater of (i) $1,000.00  (the "Issue Price") per share
plus all  accrued and unpaid  dividends  as of the date of payment and (ii) such
amount per share of Series A  Preferred  Stock,  as would have been  payable had
each share been  converted  into  Common  Stock  immediately  prior to the event
requiring  the payment of such  liquidation  preference.  The Series B Preferred
Stock has a liquidation  preference  equal to the greater of (i) $1,000 plus all
accrued and unpaid  dividends as of the date of payment and (ii) such amount per
share of Series B  Preferred  Stock,  as would have been  payable had each share
first been exchanged for Series A Preferred  Stock (assuming that all

<PAGE>

                                                                Page 13 of Pages

conditions  to  conversion  had  occurred)  and then  such  shares  of  Series A
Preferred Stock were converted into Common Stock  immediately prior to the event
requiring  the  payment of such  liquidation  preference.  The  Preferred  Stock
liquidation payment amounts shall be adjusted for any stock split, reverse stock
split, stock combination,  reclassification  or pursuant to any other adjustment
with respect to the Series A Preferred Stock or Series B Preferred Stock, as the
case may be. No  distributions  as  specified  above may be made to  holders  of
Common  Stock of the  Issuer  until the  holders  of the  Preferred  Stock  have
received the liquidation preference.

     Dividends.

     Dividends on Series A Preferred Stock.  Holders of Series A Preferred Stock
are  entitled to receive  quarterly  dividends at the rate of 6.75% per annum of
the  liquidation  preference per share of Series A Preferred  Stock.  During the
period from the Closing Date until the third anniversary  thereof,  the Series A
Preferred  Stock  dividends  will be paid  in  additional  shares  of  Series  A
Preferred  Stock.  From the third  anniversary  of the  Closing  Date  until the
seventh  anniversary  thereof,  dividends on the Series A Preferred Stock may be
paid in additional  shares of Series A Preferred Stock or in cash, at the option
of the Issuer.  After the seventh anniversary of the Closing Date,  dividends on
the  Series  A  Preferred  Stock  will be paid in cash,  unless  the  Issuer  is
otherwise  prohibited  from making such cash  payments,  in which case dividends
will be paid in additional  shares of Series A Preferred  Stock.  If at any time
the Issuer is unable to pay cash and issuance of  additional  shares of Series A
Preferred  Stock  would  result in a change of control (as defined in certain of
the  Issuer's  indentures)  or there  are not  enough  shares  of  Common  Stock
authorized  for  additional  shares of Series A Preferred  Stock,  the dividends
payable  in  Series A  Preferred  Stock  will  instead  be  payable  in Series B
Preferred  Stock.  Generally,  upon a Change of  Control  on or before the fifth
anniversary of the Closing Date,  the holders of Series A Preferred  Stock shall
receive a one-time  dividend of additional shares of Series A Preferred Stock on
each share of Series A Preferred Stock.

     Dividends  on Series B Preferred  Stock.  The holders of Series B Preferred
Stock initially are entitled to receive quarterly dividends at the rate of 12.0%
per annum of the liquidation  preference per share of Series B Preferred  Stock.
During the period from the  Closing  Date until the third  anniversary  thereof,
dividends on the Series B Preferred  Stock will be paid in additional  shares of
Series B Preferred Stock.  From the third  anniversary of the Closing Date until
the fifth anniversary thereof,  dividends on the Series B Preferred Stock may be
paid in additional  shares of Series B Preferred Stock or in cash, at the option
of the Issuer. After the fifth anniversary of the Closing Date, dividends on the
Series B Preferred  Stock will be paid in cash,  unless the Issuer is  otherwise
prohibited from making such cash payments,  in which case dividends will be paid
in additional shares of Series B Preferred Stock. If and when the Issuer obtains
Shareholder  Approval and the Series B Preferred Stock is exchanged for Series A
Preferred  Stock,  the Series B Preferred  Stock  dividend  rate, as to the then
outstanding  shares of  Series B  Preferred  Stock so  converted  only,  will be
reduced,  retroactively  to the Closing Date,  from 12.0% per annum to 6.75% per
annum. Generally, upon a Change of Control on or before the fifth anniversary of
the  Closing  Date,  the  holders of Series B  Preferred  Stock  will  receive a
one-time dividend of additional shares of Series B Preferred Stock on each share
of Series B  Preferred  Stock.  In  addition,  the Series B  Preferred  Stock is
entitled to receive  certain  special  dividends  upon the occurrence of certain
events specified in the Certificate of Designations.

<PAGE>

                                                                Page 14 of Pages

     Issuer's  Optional  Redemption.  At any time after five years following the
Closing  Date,  the  Issuer  may,  upon 45 days  notice  to the  holders  of the
Preferred  Stock,  redeem all,  but not less than all,  of the then  outstanding
shares of  Preferred  Stock at a cash  redemption  price per share  equal to the
liquidation preference for each share of Preferred Stock (the "Issuer Redemption
Price"),  so long as the  average  trading  price of the  Common  Stock  for the
previous  20  trading  days  is in  excess  of  150%  of the  Conversion  Price.
Additionally,  upon the  occurrence  of a  "change  of  control"  of the  Issuer
(defined with respect to the indentures  governing the Issuers outstanding debt)
the Issuer may, upon ten days notice,  redeem all, but not less than all, of the
then  outstanding  shares of  Preferred  Stock at the Issuer  Redemption  Price;
provided, however, that notwithstanding the foregoing, the Issuer may not redeem
the Series B Preferred  Stock unless the "change of control" giving rise to such
right of redemption is also a Reorganization Event.

     Holder's  Optional  Redemption.  At any time after the tenth anniversary of
the Initial  Issuance  Date, a holder of Series A Preferred  Stock may,  upon 15
days  notice to the Issuer,  require the Issuer to redeem,  in whole or in part,
the holder's shares of Series A Preferred Stock for either cash or Common Stock,
at the option of the Issuer, at a redemption price per share equal to the Series
A Preferred Stock liquidation preference.

     Board  Representation.  So long as the Apollo  Funds  continue to hold more
than 50% of the Preferred Stock issued pursuant to the Investment Agreement, the
Apollo  Funds  shall  have the right to elect  three  directors  to the Board of
Directors of the Issuer. Specifically,  AIF IV shall have the right to elect one
member to the Board of Directors, AIF V shall have the right to elect one member
to the Board of Directors  and the Apollo  Funds,  collectively,  shall have the
right to elect one member to the Board of Directors. Additionally so long as the
Apollo  Funds  continue  to hold more  than 50% of the  Preferred  Stock  issued
pursuant to the Investment Agreement and subject to the provisions of applicable
law and  fiduciary  duties  of  members  of the Board of  Directors,  one of the
directors  elected to the Issuer's  Board of Directors by the Apollo Funds shall
be a member of each of the  committees of the Board of Directors,  including the
Nominating Committee. The Nominating Committee is established for the purpose of
providing  nominees for the two independent  director  positions on the Issuer's
Board of Directors.  The nominees  selected by the Nominating  Committee must be
selected by a unanimous vote of the members of the Nominating Committee,  and if
such unanimous approval is not received,  the member of the Nominating Committee
elected by the  Apollo  Funds  shall  have the right to  appoint  one of the two
nominees for independent director.

     Voting Rights. Subject to the occurrence of an event of default (as defined
in the Certificate of Designations),  the Apollo Funds shall not have any voting
rights with respect to Preferred Stock held by the Apollo Funds. Notwithstanding
the  foregoing,  upon the transfer by the Apollo Funds to any third party of any
shares  of the  Series  A  Preferred  Stock,  the  transferee  of such  Series A
Preferred Stock will be entitled to vote on all matters presented to the holders
of the Issuer's Common Stock on an as-converted  basis, voting together with the
shareholders  of the Issuer's  Common Stock and Class B Stock as a single class;
provided,  however,  that such voting  rights will not extend to the election of
directors or to any matter that is reserved (by law or the Issuer's  Certificate
of  Incorporation)  for  consideration  exclusively by the holders of the Common
Stock and/or the Class B Stock.  The Apollo Funds have agreed,  however,  not to
convert any

<PAGE>

                                                                Page 15 of Pages

shares of Series A Preferred Stock into Common Stock until April 2006, except in
connection with certain dispositions to third parties.

     The affirmative  consent of the Reporting  Persons is required prior to the
Issuer  taking  certain  actions as  described  in  Section 8 of the  Investment
Agreement, the terms of which are incorporated herein by reference.

     The foregoing  descriptions do not purport to be complete and are qualified
in their entirety by reference to the Investment  Agreement,  the Certificate of
Designations, the Registration Rights Agreement, and the Standstill Agreement, a
copy of each of which has been filed as an Exhibit to this  Schedule  13D and is
incorporated  herein by reference.  Certain  capitalized terms used herein shall
have the meaning ascribed in the applicable agreement referenced herein.

     The shares of Preferred  Stock  described  herein were acquired for general
investment purposes. Notwithstanding the foregoing, the Reporting Persons retain
the right to change their  investment  intent,  to propose one or more  possible
transactions to the Issuer's Board of Directors, to acquire additional shares of
Preferred  Stock  or  Common  Stock  from  time to time or to sell or  otherwise
dispose of all or part of the Preferred Stock beneficially owned by them (or any
shares of Common Stock into which such  Preferred  Stock are  converted)  in any
manner  permitted by law. In addition,  the Apollo Funds have the right to elect
three members to the Issuer's  Board of  Directors.  As directors of the Issuer,
the three members of the Issuer's Board of Directors elected by the Apollo Funds
may have  influence  over the  corporate  activities  of the  Issuer,  including
activities  which may relate to  transactions  described  in  subparagraphs  (a)
through (j) of Item 4 of Schedule 13D.


Item 5. Interest in Securities of the Issuer.

(a) and (b)

     The Reporting  Persons may be deemed to  collectively  beneficially  own an
aggregate of 92,000  shares of Series A Preferred  Stock.  Such 92,000 shares of
Series  A  Preferred  Stock  represents  39.8%  of the  Outstanding  Shares  (as
described  below),  subject  to the  restrictions  on  conversion  of  Series  A
Preferred  Stock as described in Section 4 herein.  For purposes of  calculating
ownership  percentages in this Schedule 13D, the number of "Outstanding  Shares"
includes (i)  19,427,098  shares of Common Stock  outstanding  on April 19, 2001
based on  information  provided to the Reporting  Persons by the Issuer and (ii)
the shares of Common Stock  issuable to the Apollo Funds upon  conversion of the
shares of Series A Preferred  Stock  currently held by the Apollo Fund or Apollo
Funds whose ownership is being measured.  The Reporting Persons may be deemed to
collectively  beneficially  own in the  aggregate  158,000  shares  of  Series B
Preferred  Stock.  The  shares of  Series B  Preferred  Stock are not  presently
exchangeable   into  Series  A  Preferred  Stock  and  therefore  not  presently
convertible into Common Stock. Therefore, the Common Stock ownership information
set forth in this Item 5 and in the cover  pages to this  Schedule  13D does not
include the shares of Common  Stock that would be  received by the Apollo  Funds
upon a future potential exchange of their respective shares of Series B

<PAGE>

                                                                Page 16 of Pages

Preferred  Stock into Series A Preferred Stock and the conversion of such shares
of Series A Preferred  Stock into shares of Common  Stock.  Assuming  receipt of
Shareholder  Approval and HSR Approval,  each share of Series B Preferred  Stock
would be automatically exchanged into one share of Series A Preferred Stock. The
number of shares of Common Stock into which  shares of Series A Preferred  Stock
(including the shares of Series A Preferred  Stock received upon exchange of the
shares of Series B Preferred Stock) are convertible may vary upon the occurrence
of certain  events as  described  in Item 4.  Beneficial  ownership  of all such
securities  was  acquired  as  described  in Item 3 and  Item 4.  See  also  the
information  contained  on the  cover  pages  to  this  Schedule  13D  which  is
incorporated by reference.  Each of the Reporting  Persons  expressly  disclaims
beneficial  ownership of those shares of  Preferred  Stock not directly  held by
them.  Furthermore,  the  filing  of this  Schedule  13D  shall not be deemed an
admission that any of the Reporting Persons is, for purposes of Section 13(d) of
the Act, the beneficial owner of the securities  (including the Common Stock) of
the Issuer described herein.

     (b) The Reporting  Persons may be deemed to have shared  dispositive  power
with respect to an aggregate of 12, 867,133 shares of Common Stock. As explained
in the  footnotes  to the cover pages to this  statement  on Schedule  13D,  the
Apollo Funds have agreed in the  Investment  Agreement not to convert any shares
of Series A  Preferred  Stock into Common  Stock  until  April  2006,  except in
connection with certain  dispositions to  unaffiliated  third parties.  As such,
notwithstanding  the  right  of the  Reporting  Persons  to elect  directors  as
described herein, the Reporting Persons have no ability to exercise voting power
with respect to the Common Stock following conversion during such period.

     (c) There have been no reportable  transactions  with respect to the Common
Stock of the Issuer within the last 60 days by the Reporting Persons.

     (d) Not applicable.

     (e) Not applicable.


Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
        Securities of the Issuer.

     The  responses  to Item 2,  Item 3, and Item 4 are  incorporated  herein by
reference.

     Pursuant to the Investment Agreement,  the Apollo Funds may not transfer to
any person (other than their respective affiliates which may include one or more
special or general  investment  funds under  management)  any shares of Series B
Preferred Stock until a date that is eighteen months after the Closing Date.

     The Issuer and the Apollo  Funds have entered  into a  registration  rights
agreement (the "Registration  Rights Agreement") which provides the Apollo Funds
with certain  rights to demand  registration  of the Preferred  Stock and Common
Stock held by the Apollo Funds (the  "Demand  Registration  Rights")  along with
certain rights to participate in any  registration of the shares  implemented by
the Issuer (the "Piggyback Registration Rights").

<PAGE>

                                                                Page 17 of Pages

     The  Reporting  Persons and the Issuer have  entered  into an  agreement to
restrict for a period of five years (the "Standstill Period") the ability of the
Apollo Funds (and certain  affiliates of the Reporting  Persons) to take certain
actions  with  regard to the Issuer and the  acquisition  of  securities  of the
Issuer (the "Standstill  Agreement"),  as set forth in the Standstill Agreement,
the terms of which are  incorporated  herein by  reference.  As set forth in the
Standstill  Agreement,  certain restrictions on the acquisition of securities of
the Issuer set forth therein shall continue  beyond the Standstill  Period.  The
Standstill  Agreement also contains  certain  limitations on dispositions by the
Apollo Funds of securities of the Issuer.  The  Standstill  Agreement  generally
terminates on the earlier of (i) the tenth anniversary of the Closing Date, (ii)
the  acquisition  by a third party of more than 20% of the "voting power" of the
Issuer unless such Person has entered into a Purchaser  Standstill  Agreement in
connection with such acquisition or (iii) the termination by the Issuer with the
approval of the Requisite Independent Directors.


     The  foregoing  response  to this Item 6 is  qualified  in its  entirety by
reference to the Investment  Agreement,  the  Certificate of  Designations,  the
Registration Rights Agreement,  and the Standstill  Agreement,  each of which is
filed as an  exhibit to this  Schedule  13D and is  incorporated  hereby by this
reference.


<PAGE>

                                                                Page 18 of Pages

Item 7. Material to be Filed as Exhibits.

The following documents are filed as exhibits to this Schedule 13D:

Exhibit No.
----------

1.   Joint  Filing  Agreement  dated  as of  April  27,  2001 by and  among  the
     Reporting Persons.

2.   Investment Agreement,  dated April 19, 2001, by and among AMC Entertainment
     Inc.,  Apollo  Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P.,
     Apollo IV Management, L.P., Apollo Investment Fund V, L.P., Apollo Overseas
     Partners V, L.P., and Apollo V Management, L.P.

3.   Certificate of  Designations  of Series A Convertible  Preferred  Stock and
     Series B Exchangeable Preferred Stock of AMC Entertainment Inc.

4.   Registration  Rights  Agreement,  dated  April 19,  2001,  by and among AMC
     Entertainment  Inc.,  Apollo  Investment  Fund IV,  L.P.,  Apollo  Overseas
     Partners IV, L.P.,  Apollo  Investment Fund, L.P., Apollo Overseas Partners
     V, L.P.

5.   Standstill Agreement,  dated April 19, 2001, by and among AMC Entertainment
     Inc.,  Apollo  Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P.,
     Apollo IV Management, L.P., Apollo Investment Fund V, L.P., Apollo Overseas
     Partners V, L.P., and Apollo V Management, L.P.


<PAGE>

                                                                Page 19 of Pages


Signature

     After reasonable inquiry and to the best of their knowledge and belief, the
undersigned  certify that the  information  set forth in this statement is true,
complete and correct.


April 27, 2001                   APOLLO INVESTMENT FUND IV, L.P.

                                 By:  APOLLO ADVISORS IV, L.P.
                                      its general partner

                                 By:  Apollo Capital Management IV, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO OVERSEAS PARTNERS IV, L.P.

                                 By:  APOLLO ADVISORS IV, L.P.
                                      its managing general partner

                                 By:  Apollo Capital Management IV, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


                                 APOLLO ADVISORS IV, L.P.
                                 its capacity as managing general partner
                                 to Apollo Investment Fund IV, L.P. and
                                 Apollo Overseas Partners IV, L.P.

                                 By:  Apollo Capital Management IV, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President



<PAGE>

                                                                Page 20 of Pages

April 27, 2001                   APOLLO MANAGEMENT IV, L.P.
                                 in its capacity as investment manager to
                                 Apollo Investment Fund IV, L.P. and
                                 Apollo Overseas Partners IV, L.P.

                                 By:  AIF IV Management, Inc.

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO INVESTMENT FUND V, L.P.

                                 By:  APOLLO ADVISORS V, L.P.
                                      its general partner

                                 By:  Apollo Capital Management V, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO OVERSEAS PARTNERS V, L.P.

                                 By:  APOLLO ADVISORS V, L.P.
                                      its managing general partner

                                 By:  Apollo Capital Management V, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


<PAGE>

                                                                Page 21 of Pages

                                 APOLLO ADVISORS V, L.P.
                                 in its capacity as managing general partner of
                                 Apollo Investment Fund V, L.P. and
                                 Apollo Overseas Partners V, L.P.

                                 By:  Apollo Capital Management V, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO MANAGEMENT V, L.P.
                                 in its capacity as investment manager to
                                 Apollo Investment Fund V, L.P.
                                 and Apollo Overseas Partners V, L.P.

                                 By:  AIF V Management, Inc.

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President



<PAGE>


                                                                Page 22 of Pages

                                   Schedule 1


     The following sets forth  information with respect to the general partners,
executive  officers,  directors  and  principal  shareholders  of the  Reporting
Persons  that is not set forth in the  Schedule  13D to which  this  Schedule  1
relates. Except as otherwise indicated in this Schedule 1 or in the Schedule 13D
to which this Schedule 1 relates,  the principal business address of each person
set forth below is c/o Apollo Advisors IV, L.P. and c/o Apollo Advisors V, L.P.,
Two Manhattanville Road, Purchase, New York 10577.

     The directors and principal executive officers of Capital Management IV and
Capital Management V are Messrs. Leon D. Black and John J. Hannan. The principal
occupation of each of Messrs. Black and Hannan is to act as an executive officer
and  director  of Capital  Management  IV,  Capital  Management  V and the other
entities identified below. Messrs. Black and Hannan are also limited partners of
Advisors IV and  Advisors V. Mr.  Black is the  President  and a director of AIF
Management  IV and AIF  Management  V.  Mr.  Hannan  is a Vice  President  and a
director of AIF Management IV and AIF Management V. Messrs. Black and Hannan are
both United States citizens.


<PAGE>

                                                                Page 23 of Pages

                                                                       Exhibit 1

                             JOINT FILING AGREEMENT

     In accordance with Rule 13d-1(k)  promulgated under the Securities Exchange
Act of 1934, as amended,  the undersigned  hereby agree to the joint filing with
all  other  Reporting  persons  listed  below  on  behalf  of  each of them of a
Statement on Schedule 13D (including any amendments thereto) with respect to the
common  stock,  par value  $0.662/3  per share,  of AMC  Entertainment  Inc.,  a
Delaware corporation. The undersigned further consent and agree to the inclusion
of this  Agreement as an Exhibit to such  Schedule  13D.  This  Agreement may be
executed  in any  number of  counterparts,  all of which  taken  together  shall
constitute one and the same instrument.

     IN WITNESS WHEREOF,  the undersigned have executed this agreement as of the
27th day of April, 2001.


April 27, 2001                   APOLLO INVESTMENT FUND IV, L.P.

                                 By:  APOLLO ADVISORS IV, L.P.
                                      its general partner

                                 By:  Apollo Capital Management IV, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President

April 27, 2001                   APOLLO OVERSEAS PARTNERS IV, L.P.

                                 By:  APOLLO ADVISORS IV, L.P.
                                      its managing general partner

                                 By:  Apollo Capital Management IV, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      -----------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


<PAGE>

                                                                Page 24 of Pages

                                 APOLLO ADVISORS IV, L.P.
                                 its capacity as managing general partner
                                 to Apollo Investment Fund IV, L.P. and
                                 Apollo Overseas Partners IV, L.P.

                                 By:  Apollo Capital Management IV, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO MANAGEMENT IV, L.P.
                                 in its capacity as investment manager to
                                 Apollo Investment Fund IV, L.P. and
                                 Apollo Overseas Partners IV, L.P.

                                 By:  AIF IV Management, Inc.

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO INVESTMENT FUND V, L.P.

                                 By:  APOLLO ADVISORS V, L.P.
                                      its general partner

                                 By:  Apollo Capital Management V, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      -----------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President



<PAGE>

                                                                Page 25 of Pages

April 27, 2001                   APOLLO OVERSEAS PARTNERS V, L.P.

                                 By:  APOLLO ADVISORS V, L.P.
                                      its managing general partner

                                 By:  Apollo Capital Management V, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


                                 APOLLO ADVISORS V, L.P.
                                 in its capacity as managing general partner of
                                 Apollo Investment Fund V, L.P. and
                                 Apollo Overseas Partners V, L.P.

                                 By:  Apollo Capital Management V, Inc.
                                      its general partner

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


April 27, 2001                   APOLLO MANAGEMENT V, L.P.
                                 in its capacity as investment manager to
                                 Apollo Investment Fund V, L.P. and
                                 Apollo Overseas Partners V, L.P.

                                 By:  AIF V Management, Inc.

                                 By:  /s/ Michael D. Weiner
                                      ------------------------------------------
                                      Name:    Michael D. Weiner
                                      Title:   Vice President


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>2
<FILENAME>d25605_ex99-2.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>


                              INVESTMENT AGREEMENT

          This INVESTMENT  AGREEMENT (this "Agreement") is made and entered into
this 19th day of April 2001 by and among (i) AMC ENTERTAINMENT  INC., a Delaware
corporation  (the "Company"),  (ii) APOLLO  INVESTMENT FUND IV, L.P., a Delaware
limited  partnership  ("AIF IV") and APOLLO OVERSEAS PARTNERS IV, L.P., a Cayman
Islands exempted  limited  partnership  ("AOP IV") and any other  partnership or
entity  affiliated  with and  managed  by Apollo  over  which  Apollo  exercises
investment  authority,  including  voting and dispositive  rights;  and to which
either  AIF IV or AOP IV assigns  any of their  respective  interests  hereunder
(collectively,  the "Apollo IV  Purchasers"),  (iii) APOLLO  INVESTMENT  FUND V,
L.P., a Delaware limited  partnership  ("AIF V") and APOLLO OVERSEAS PARTNERS V,
L.P., a Cayman  Islands  exempted  limited  partnership  ("AOP V") and any other
partnership  or entity  affiliated  with and managed by Apollo over which Apollo
exercises investment authority,  including voting and dispositive rights; and to
which either AIF V or AOP V assigns any of their respective  interests hereunder
(collectively,  the  "Apollo V  Purchasers",  and  together  with the  Apollo IV
Purchasers  the  "Apollo   Purchasers"   and/or  sometimes  referred  to  herein
collectively as the "Purchasers" and individually,  a "Purchaser"),  (iv) APOLLO
MANAGEMENT  IV,  L.P.,  a  Delaware  limited  partnership,  in its  capacity  as
investment manager to the Apollo IV Purchasers  ("Apollo IV Management") and (v)
APOLLO  MANAGEMENT V, L.P., a Delaware limited  partnership,  in its capacity as
investment  manager  to the  Apollo V  Purchasers  ("Apollo  V  Management"  and
together  with Apollo IV Management  and their  Affiliates,  "Apollo").  Certain
terms used and not otherwise  defined in the text of this  Agreement are defined
in Section 10 of this Agreement.

                               W I T N E S S E T H
                               - - - - - - - - - -

          WHEREAS,  the Company  desires to issue and to sell to the Purchasers,
shares of Series A Convertible  Preferred Stock of the Company,  par value $0.66
2/3 per  share  (the  "Series  A  Preferred  Stock"),  and  shares  of  Series B
Exchangeable  Preferred  Stock,  par value  $0.66 2/3 per share  (the  "Series B
Preferred Stock") (the Series A Preferred Stock and the Series B Preferred Stock
shall be referred to collectively as the "Preferred Stock"); and

          WHEREAS, the Purchasers,  severally,  desire to purchase shares of the
Company's  Preferred  Stock  on the  terms  and  conditions  set  forth  in this
Agreement.

          NOW,  THEREFORE,  in  consideration  of the  premises  and the  mutual
representations,  warranties and covenants herein contained,  the parties hereto
hereby agree as follows:

          1.   Sale and Purchase of the  Preferred  Stock.  Subject to the terms
               -------------------------------------------
and subject to the  conditions of this  Agreement,  the Company agrees to issue,
sell and  deliver  to each  Purchaser,  and each  Purchaser,  severally  and not
jointly,  agrees to purchase  from the Company,  at the Closing,  on the Closing
Date (as hereinafter defined), (i) 92,000 shares of Series A Preferred Stock for
an aggregate purchase price of Ninety-Two Million Dollars  ($92,000,000.00)  and
(ii) 158,000 shares of Series B Preferred Stock for an aggregate  purchase price
of One Hundred  Fifty-Eight Million Dollars  ($158,000,000.00)  for an aggregate
purchase  price of Two Hundred  Fifty  Million  Dollars  ($250,000,000.00)  (the
"Purchase  Price").  Each  Purchaser  shall pay its  respective  portion  of the
Purchase Price and shall receive such number of shares of Preferred Stock as set
forth in Schedule 1 hereto.
         ----------

                                       1
<PAGE>

          2.   Closing.  The  closing  of the  sale to,  and  purchase  by,  the
               -------
Purchasers of the shares of Preferred Stock referred to in Section 1 hereof (the
"Closing")  shall occur at the  offices of Akin,  Gump,  Strauss,  Hauer & Feld,
L.L.P.,  590 Madison  Avenue,  New York, New York 10022,  at 9:00 a.m., New York
time, on or before the next business day after the satisfaction or waiver of all
of the  conditions  to the  Closing  set forth in Section 5 hereof or such other
location,  date and time as agreed upon by the  Purchasers  and the Company (the
"Closing  Date").  At the Closing,  the Company  shall issue and deliver to each
Purchaser certificates  evidencing the Preferred Stock (in such denominations as
shall be  specified  in  writing  by each  Purchaser),  each of  which  shall be
registered in each  Purchaser's  name,  against  delivery to the Company by each
Purchaser of the Purchase  Price payable by (i) wire  transfer,  in  immediately
available funds to an account that the Company shall designate in writing to the
Purchaser at least two business days prior to the Closing Date,  (ii)  certified
or cashier's  check payable to the order of the Company or (iii) such other form
of payment as may be acceptable to the Company.  In addition,  the parties shall
execute and deliver the documents referred to in Section 5 hereof.

          3.   Representations and Warranties of the Purchasers.
               ------------------------------------------------

          Each Apollo  Purchaser  severally,  and not  jointly,  represents  and
warrants to the Company as follows:

          3.1  Organization.  It (a) is a partnership  duly  organized,  validly
               ------------
existing and in good standing in the  jurisdiction of its  organization,  (b) is
duly  qualified  or  licensed  to do  business  and is in good  standing in each
jurisdiction  where  the  nature  of the  property  owned or leased by it or the
nature of the  business  conducted  by it makes  such  qualification  or license
necessary, except where the failure to be so qualified or licensed (individually
or in the  aggregate)  would either  prevent or materially  delay its ability to
consummate the transactions  contemplated by the Transaction Documents,  and (c)
has all power and authority to carry on its  operations  and to  consummate  the
transactions contemplated by the Transaction Documents.

          3.2  Authorization;  Enforcement.  It has the  requisite  corporate or
               ---------------------------
partnership  power and has taken all necessary  corporate or partnership  action
required for the due authorization, execution, delivery and performance by it of
this  Agreement,  each of the  Transaction  Documents  and other  documents  and
instruments  referred to herein and to consummate the transactions  contemplated
hereby (including,  without limitation,  the purchase of the shares of Preferred
Stock). The execution, delivery and performance by it of this Agreement, each of
the other  Transaction  Documents  and  consummation  by it of the  transactions
contemplated  hereby and thereby,  have been duly  authorized  by all  necessary
action  on the part of it.  This  Agreement  and each of the  other  Transaction
Documents have been duly and validly executed and delivered by it and constitute
a valid and binding obligation of it, enforceable  against it in accordance with
their  respective  terms except as such enforcement may be limited by bankruptcy
or similar  laws  affecting  the  rights of  creditors  generally  or by general
equitable principles.

                                       2
<PAGE>

          3.3  Consents. Except for filings, permits,  authorizations,  consents
               --------
and approvals as may be required under, and other applicable requirements of the
Exchange  Act, the Delaware  Revised  Uniform  Limited  Partnership  Act,  state
anti-takeover laws or under relevant state blue sky laws, neither the execution,
delivery or performance of this Agreement or of any other  Transaction  Document
by such Apollo  Purchaser,  nor the  consummation  by it of the  obligations and
transactions   contemplated   hereby  or  thereby   requires   any  consent  of,
authorization  by,  exemption from,  filing with, or notice to any  Governmental
Entity or any other Person.

          3.4  No Conflicts.  The  execution,  delivery and  performance of this
               ------------
Agreement and each of the other  Transaction  Documents and the  consummation of
the transactions  contemplated  hereby and thereby will not (a) conflict with or
result in any breach of any provision of its  agreement of limited  partnership,
operating  agreement or other  organizational  documents,  (b) conflict  with or
result in the breach of the terms,  conditions  or provisions of or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or give  rise to any  right of  termination,  acceleration  or
cancellation under, any material agreement, lease, mortgage, license, indenture,
instrument  or other  contract  to  which  it is a party or by which  any of its
properties or assets are bound,  or (c) result in a violation of any law,  rule,
regulation,  order,  judgment or decree  (including,  without  limitation,  U.S.
federal and state securities laws and regulations)  applicable to it or by which
any of its  properties  or assets are bound or  affected,  except in the case of
clauses (b) or (c),  where such  conflicts  or  violations  would not prevent or
materially delay its ability to consummate the transactions  contemplated by the
Transaction Documents.

          3.5  Investment Representations and Warranties.
               -----------------------------------------

          (a)  The shares of Preferred Stock being purchased by it hereunder are
being acquired for its own account, for the purpose of investment and not with a
view to or for sale in connection with any public resale or distribution thereof
in violation of applicable securities laws.

          (b)  It is an "accredited  investor" within the meaning of Rule 501(a)
promulgated under the Securities Act.

          (c)  It (i) has been  furnished  with or has had full access to all of
the information  that it considers  necessary or appropriate to make an informed
investment  decision  with respect to the shares of Preferred  Stock and that it
has  requested  from the Company,  (ii) has had an  opportunity  to discuss with
management  of the Company the intended  business and  financial  affairs of the
Company  and to obtain  information  (to the extent the Company  possessed  such
information  or  could  acquire  it  without  unreasonable  effort  or  expense)
necessary to verify, any information  furnished to it or to which it had access,
and (iii) can bear the economic risk of such investment in the Preferred  Stock,
has such  knowledge and  experience  in business and financial  matters so as to
enable  it to  understand  and  evaluate  the  risks of and  form an  investment
decision with respect to its  investment  in the Preferred  Stock and to protect
its own interests in connection with such investment.

                                       3
<PAGE>

          (d)  It has no need for  liquidity in its  investment in the shares of
Preferred  Stock and is able to bear the economic risk of its  investment in the
shares of Preferred Stock and the complete loss of all of such investment.

          (e)  It  understands  that  the   transferability  of  the  shares  of
Preferred Stock is restricted,  and that such  restrictions will be reflected in
an appropriate  legend on the instruments  representing  the shares of Preferred
Stock.

          (f)  It recognizes that an investment in the Company  involves certain
risks and has taken  full  cognizance  of,  and  understands  all of,  the risks
related  to  the  purchase  of  the  shares  of  Preferred   Stock.  It  further
acknowledges  and  understands  that no  federal  or state  agency  has made any
recommendation  or  endorsement  of  the  Preferred  Stock  or  any  finding  or
determination as to the fairness of the investment therein.

          3.6  Information Supplied. None of the written information supplied by
               --------------------
it specifically  for inclusion or incorporation by reference in any documents to
be filed by the Company with the SEC or any  Governmental  Entity in  connection
with the  transactions  contemplated  hereby  (including in connection  with the
Company's  solicitation of shareholder approval of an amendment to the Company's
Certificate of Incorporation  increasing the number of authorized  shares of the
Common Stock) will, on the date of its filing and on the date any such materials
are mailed to  stockholders,  contain any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they are made, not misleading.

          3.7  Ownership of Capital Stock of the Company.  As of the date hereof
               -----------------------------------------
and  prior  to  giving  effect  to  the  transactions  contemplated  under  this
Agreement, the Purchasers do not in the aggregate, own of record or beneficially
including by virtue of  membership in a "group" for purposes of Section 13(d) of
the Exchange Act (i) a number of shares of Common Stock which  exceeds 1% of the
outstanding  shares of Common Stock on the date  hereof;  (ii) any shares of the
Company's Class B Stock; or (iii) any debt securities issued by the Company. The
Purchasers shall not acquire or dispose of any shares of Common Stock or Class B
Stock or any debt  securities  issued by the  Company (i) before the Closing and
(ii) thereafter, except in the case of clause (ii), in compliance with the terms
of the Standstill Agreement.

          3.8  Financing.  On the  Closing  Date,  it will have  adequate  funds
               ---------
available to pay its portion of the Purchase Price.

          3.9  Brokers.  Except as set forth in Schedule 3.9 hereof,  it has not
               -------
engaged a broker,  investment banker,  financial advisor, finder or other person
entitled to any brokerage, investment banker's, financial advisor's, finder's or
other fee or commission for which the Company will be liable in connection  with
the  execution of this  Agreement or the  performance  by the parties  hereto of
their respective obligations hereunder.

          3.10 Hart-Scott-Rodino.  Each Purchaser is a separate  "person" within
               -----------------
the meaning of the HSR Act.

                                       4
<PAGE>

          3A.  Representations and Warranties of Apollo.
               ----------------------------------------

          3A.1 Control of Apollo  Purchasers.  Apollo is the investment  manager
               -----------------------------
of, and  possesses  the ability to direct the  investments  of, each  Purchaser.
Apollo  controls the Purchasers and has the authority to cause the Purchasers to
perform their respective obligations under the Transaction Documents. Apollo, in
its capacity as  investment  manager,  general  partner or manager of the Apollo
Purchasers,  has the requisite  power and has taken all  necessary  corporate or
partnership  action  required  to cause the Apollo  Purchasers  to  execute  and
deliver this  Agreement  and the other  Transaction  Documents and perform their
respective  obligations hereunder and thereunder.  The execution and delivery by
Apollo of this Agreement and each of the other Transaction Documents to which it
is a party  has been  duly  authorized  by all  requisite  action on the part of
Apollo.

          4.   Representations and Warranties by the Company. The Company (which
               ---------------------------------------------
term as used in this Section 4 shall, unless the context otherwise requires,  be
deemed to include any Subsidiary of the Company) represents and warrants to each
Purchaser and Apollo as follows:

          4.1  Capitalization.   (a)   Immediately   before  the  Closing,   the
               --------------
authorized  capital stock of the Company shall consist of (i) 45,000,000  shares
of common  stock (the  "Common  Stock"),  par value  $0.66 2/3 per  share;  (ii)
30,000,000  shares of class B stock (the  "Class B Stock"),  par value $0.66 2/3
per share; and (iii)  10,000,000  shares of preferred stock, par value $0.66 2/3
per share,  which are undesignated as to series.  The Company has no other class
of capital stock authorized,  issued or outstanding.  The  capitalization of the
Company as of the date  hereof,  including,  without  limitation,  the number of
shares issued and  outstanding,  the number of shares  issuable and reserved for
issuance  pursuant to the  Company's  stock option  plans,  the number of shares
issuable  and  reserved  for  issuance  pursuant to  securities  (other than the
Preferred  Stock)  exercisable  for, or convertible into or exchangeable for any
shares of capital stock is set forth on Schedule 4.1(a).

          (b)  Except as set forth on  Schedule  4.1(b),  as of the date of this
                                       ----------------
Agreement,  (i) there are no outstanding options,  warrants,  scrip,  dividends,
rights to subscribe  to, calls or  commitments  of any  character  whatsoever to
which the Company is a party  relating to, or securities  or rights  convertible
into or  exercisable  or  exchangeable  for, any shares of capital  stock of the
Company,  or  arrangements  by which the Company is or may become bound to issue
additional shares of capital stock, (ii) there are no agreements or arrangements
under  which  the  Company  is  obligated  to  register  the  sale of any of its
securities  under  the  Securities  Act of 1933,  as  amended  (the  "Securities
Act")(except  as provided  hereunder),  and (iii) the Company has no  obligation
(contingent  or otherwise) to purchase,  redeem or otherwise  acquire any of its
equity  securities or any  interests  therein or to pay any dividend or make any
distribution in respect thereof.  Except as set forth on Schedule 4.1(b),  there
                                                         ---------------
are no securities or instruments  containing  antidilution or similar provisions
that will be  triggered  by the  issuance  of the shares of  Preferred  Stock in
accordance  with the terms of this  Agreement  or any of the  other  Transaction
Documents. Except as set forth on Schedule 4.1(b) and other than this Agreement,
                                  ---------------
the Company is not a party to, and has no  knowledge  of the  existence  of, any
voting trust or other voting  agreement with respect to any of the securities of
the Company or to any  agreement  relating to the  issuance,  sale,  redemption,
transfer or other  disposition of the capital stock of the Company.  To the best
of the  Company's  knowledge,  no  stockholder  of the Company has any agreement
obligating such stockholder to transfer shares of the Company.

                                       5
<PAGE>

          (c)  The Company has furnished or made available to the Purchaser true
and  correct  copies  of  the  Company's  and  each  Subsidiary's   articles  or
certificate of  incorporation or other governing  document (the  "Certificate of
Incorporation")  as in effect on the date  hereof,  and the  Company's  and each
Subsidiary's  bylaws or other governing  document (the "Bylaws") as in effect on
the date hereof.

          4.2  Issuance; Authorization.
               -----------------------

          (a)  All of the issued and outstanding  shares of capital stock of the
Company  have  been duly  authorized  and are  validly  issued,  fully  paid and
nonassessable.  The issuance, sale and delivery of the shares of Preferred Stock
to be purchased  hereunder have been duly authorized by all requisite  action of
the  Company,  and when  issued,  sold and  delivered  in  accordance  with this
Agreement,   such  shares  of  Preferred   Stock  will  be  validly  issued  and
outstanding,  fully paid and non-assessable with no personal liability attaching
to the ownership thereof and will not be subject to any lien,  claim,  judgment,
charge, mortgage,  security interest, pledge, other encumbrance or preemptive or
any  other  similar  right  of  the   shareholders  of  the  Company  or  others
(collectively, "Encumbrances").

          (b)  Except  with  respect  to the  Common  Stock  to be  issued  upon
conversion  of Series A Preferred  Stock that,  in turn,  would have been issued
upon the exchange of Series B Preferred Stock, the issuance,  sale, and delivery
of the shares of Common  Stock to be issued  upon  conversion  of the  Preferred
Stock in accordance with the terms of the Certificate of Designations  have been
duly  authorized  by all requisite  action of the Company,  and when issued upon
conversion  of the  Preferred  Stock  in  accordance  with  the  Certificate  of
Designations,  the  Conversion  Shares will be validly  issued and  outstanding,
fully paid,  and  non-assessable  with no personal  liability  attaching  to the
ownership  thereof and not subject to any Encumbrance or preemptive or any other
similar rights of the shareholders of the Company or others.

          (c)  The Company has all requisite  corporate  power and has taken all
necessary  corporate  action  required  for  the due  authorization,  execution,
delivery and  performance  by the Company of this  Agreement,  each of the other
Transaction Documents and the other documents and instruments referred to herein
and to consummate  the  transactions  contemplated  hereby  (including,  without
limitation,  the issuance of the shares of Preferred  Stock (but  excluding  the
issuance of any shares of Common Stock issuable upon  conversion of the Series A
Preferred Stock that, in turn,  would have been issued upon exchange of Series B
Preferred  Stock)).  The execution,  delivery and  performance by the Company of
this Agreement and each of the other Transaction  Documents and the consummation
by the Company of the transactions  contemplated  hereby and thereby,  have been
duly  authorized  by all necessary  corporate  action on the part of the Company
except  for  Shareholder  Approval.  At  the  Closing,  except  for  Shareholder
Approval,  the Company  will have taken all  actions  under its  Certificate  of
Incorporation  and its Bylaws as may be  necessary  or  advisable to provide the
Purchaser with the rights hereby contemplated.

                                       6
<PAGE>

          (d)  This Agreement and each of the other  Transaction  Documents have
been duly and validly  executed and  delivered  by the Company and  constitute a
valid and binding obligation of the Company,  enforceable against the Company in
accordance with their respective terms except as such enforcement may be limited
by bankruptcy or similar laws affecting the rights of creditors  generally or by
general equitable principles.

          4.3  Organization.  The Company (a) is a corporation  duly  organized,
               ------------
validly  existing and in good standing  under the laws of the State of Delaware,
(b) is duly qualified or licensed to do business as a foreign corporation and is
in good standing in each jurisdiction  where the nature of the property owned or
leased  by it or  the  nature  of  the  business  conducted  by  it  makes  such
qualification or license necessary,  except where the failure to be so qualified
or licensed would not reasonably be expected to have a Material  Adverse Effect,
(c) has its principal place of business and chief  executive  office at 106 West
14th Street,  P.O. Box 419615,  Kansas City,  Missouri and (d) has all corporate
power and  authority  to own or lease and  operate  its  assets and carry on its
business  as  presently  being  conducted  and to  consummate  the  transactions
contemplated by the Transaction Documents.

          4.4  Subsidiaries.   (a)  Schedule  4.4(a)  lists  the  name  of  each
               ------------
Subsidiary in which the Company has a direct or indirect equity interest. All of
the  outstanding  shares of capital  stock or the  ownership  interests  of each
Subsidiary  are,  except as set forth on  Schedule  4.4(a),  owned  directly  or
indirectly by the Company free and clear of any Encumbrances. Each Subsidiary is
(i) duly organized,  validly existing and in good standing under the laws of its
jurisdiction of organization;  (ii) duly qualified or licensed to do business as
a foreign  corporation  and is in good standing in each  jurisdiction  where the
nature  of the  property  owned or leased  by it or the  nature of the  business
conducted by it makes such qualification necessary,  except where the failure to
be so  qualified  would not  reasonably  be expected to have a Material  Adverse
Effect and (iii) has all requisite corporate power and authority to own or lease
and operate its assets and carry on its business as presently being conducted.

          (b)  Except  as  provided  on  Schedule  4.4(b),   there  are  (i)  no
outstanding securities convertible into,  exchangeable for or carrying the right
to  acquire  any  class of  securities  of the  Subsidiaries  (whether  from the
Company, the Subsidiaries or otherwise),  or subscriptions,  warrants,  options,
rights  or other  arrangements  or  commitments  of any kind  that  relate to or
require  the  issuance,  sale or other  disposition  or  transfer  of any of the
Subsidiaries'  respective equity securities (whether or not presently issued) or
any  interest  therein,  (ii)  no  arrangements  by  which  the  Company  or any
Subsidiary is or may become bound to issue additional shares of capital stock of
any  Subsidiary,  nor are any such issuances or arrangements  contemplated,  and
(iii) no  obligations  (contingent  or otherwise) of any Subsidiary to purchase,
redeem or  otherwise  acquire  any of its  equity  securities  or any  interests
therein or to pay any  dividend  or make any  distribution  in respect  thereof.
There are no outstanding options,  warrants or other rights to acquire shares of
any Subsidiary's stock.

          4.5  Absence of Certain  Changes.  Except as set forth on Schedule 4.5
               ---------------------------                          ------------
or as disclosed in the Company SEC Documents,  since March 30, 2000, neither the
Company nor any of the  Subsidiaries  has suffered any change or  development in
its assets, business, operations, condition (financial or otherwise), or results
of  operations  (but not  prospects)  which has had a Material  Adverse  Effect.
Except  as set  forth  on  Schedule  4.5 or as  disclosed  in  the  Company  SEC
                           -------------

                                       7
<PAGE>

Documents, since March 30, 2000, the Company and the Subsidiaries have conducted
their business in the ordinary and usual course  consistent  with past practices
and have not (a) sold,  leased,  mortgaged,  pledged,  transferred  or otherwise
disposed of any material assets (other than  dispositions in the ordinary course
of business  consistent with past  practices),  (b) terminated or amended in any
material respect any Material  Contract or Real Property Lease (or any series of
related  contracts or series of related leases that are, in either such case, in
the aggregate,  material) to which the Company or the Subsidiaries is a party or
to which it is bound or to which its properties are subject, (c) made any change
in the accounting methods or practices it follows, whether for general financial
or tax  purposes,  (d) incurred,  created or suffered to exist any  Encumbrances
(other  than  Permitted   Encumbrances)   on  its  assets,   (e)  increased  the
compensation  payable or to become  payable to any of its Executive  Officers or
increased any bonus, severance,  accrued vacation,  insurance,  pension or other
employee benefit plan,  payment or arrangement made by the Company or any of the
Subsidiaries  for or with any such Executive  Officers,  in each case outside of
the ordinary  course of business,  (f) suffered any labor  dispute,  strike,  or
other work stoppage with respect to their  respective  employees,  (g) except as
may be provided in the Real Property  Leases,  made or obligated  itself to make
(in  one  transaction  or in a  series  of  related  transactions)  any  capital
expenditures,  capital  additions or betterments in excess of $5 million outside
the  ordinary  course of  business,  (h) except as may be  provided  in the Real
Property  Leases,  entered  into any contract or other  agreement  (or series of
related  contracts or agreements)  requiring the Company or a Subsidiary to make
payments in excess of $5 million other than in the ordinary  course of business,
(i) declared,  set a record date, set aside,  authorized the payment of, or paid
any dividends or other distribution, whether in cash or property, on account of,
or  repurchased  any of  the  outstanding  shares  of  capital  stock  or  other
securities  of, or other  ownership  interest in, the  Company,  (j) suffered or
experienced  any change in the  relationship  or course of dealings  between the
Company and any of its  suppliers  which supply goods or services to the Company
which has had a Material Adverse Effect on the Company, (k) paid to, or received
any payment  from,  or made or received any  investment  in, or entered into any
transaction  or  series  of  transactions  (including  without  limitation,  the
purchase, sale, exchange or lease of assets, property or services, or the making
of a loan or guarantee)  with any Affiliate in excess of $5 million  (other than
transactions involving Entertainment  Properties Trust, a real estate investment
trust),  or  (l)  entered  into  any  agreement  or  commitment  (contingent  or
otherwise) to do any of the foregoing.

          4.6  Assets and Property.
               -------------------

          (a)  Except as set forth on  Schedule  4.6(a),  the  Company  and each
                                       ----------------
Subsidiary has good, legal and marketable title to all of the personal  property
and  non-real  property  assets  owned by it, in each case free and clear of all
Encumbrances  except  Permitted  Encumbrances.  With  respect  to  the  personal
property  and  non-real  property  assets that the Company and its  Subsidiaries
leases,  the Company and its  Subsidiaries  are in compliance  with all material
provisions  of such  leases and the Company  and its  Subsidiaries  hold a valid
leasehold  interest  free and clear of any  Encumbrances  except  for  Permitted
Encumbrances. All material non-real property facilities,  machinery,  equipment,
fixtures, vehicles and other assets owned, leased or used by the Company and its
Subsidiaries are in good operating  condition and repair, are reasonably fit and
usable  for the  purposes  for  which  they are being  used,  are  adequate  and
sufficient  for the  Company's  business  and conform in all  respects  with all
applicable  laws except as would not  reasonably  be expected to have a Material
Adverse Effect.

                                       8
<PAGE>

          (b)  Except as set forth on Schedule  4.6(b),  neither the Company nor
any Subsidiary owns any real property.

          (c)  The Company has  delivered  or  otherwise  made  available to the
Purchasers  true,  correct and  complete  copies of all material  Real  Property
Leases (together with all amendments, modifications, supplements or side letters
affecting the obligations of any party  thereunder)  affecting all material real
property  and  interests  in  real  property  leased  by  the  Company  and  its
Subsidiaries (each a "Real Property Lease," and collectively, the "Real Property
Leases") as lessee or lessor.  Schedule 4.6(c) sets forth a complete list of all
                               ---------------
Real Property Leases. The information contained in the Real Property Lease Recap
Book  delivered  to the  Purchasers  by the  Company on April 13,  2001 is true,
correct and complete in all material  respects.  Except as set forth on Schedule
                                                                        --------
4.6(c),  the Company and its Subsidiaries  have good, legal and marketable title
------
to the leasehold estates in all Real Property Leases in each case free and clear
of all  Encumbrances  (except for  Permitted  Encumbrances).  The Company has no
reason to believe  that such title would not be  insurable  subject to customary
exceptions.

          (d)  To the knowledge of the Company, each of the Real Property Leases
is valid and  enforceable  in accordance  with its terms,  subject to applicable
bankruptcy,  insolvency,  reorganization,  receivership,  moratorium, fraudulent
transfer and other laws of general  application  relating to and  affecting  the
enforceability  of creditors' rights and remedies  generally and subject,  as to
enforceability,   to  general   principles  of  equity  (regardless  of  whether
enforcement is sought in a proceeding at law or in equity),  and,  except as set
forth on Schedule  4.6(d),  there is no material default under any Real Property
         ----------------
Lease by the Company and its  Subsidiaries  or, to the knowledge of the Company,
by any other party thereto,  and, to the knowledge of the Company,  no event has
occurred  that  with the lapse of time or the  giving  of  notice or both  would
constitute a material default by the Company or its Subsidiaries thereunder.

          (e)  To the Company's  knowledge,  no previous or current party to any
Real  Property  Lease has given  notice of or made a claim  with  respect to any
material breach or material default by the Company or any Subsidiary thereunder.
With respect to those Real  Property  Leases that were  assigned or subleased to
the Company or its Subsidiaries by a third party, all necessary consents to such
assignments  or subleases  have been obtained  except as would not reasonably be
expected to have a Material Adverse Effect.

          4.7  Company  SEC  Documents.  Since March 31,  1997,  the Company has
               -----------------------
timely filed all  reports,  schedules,  forms,  statements  and other  documents
required to be filed by it with the SEC pursuant to the  reporting  requirements
of the  Exchange  Act (all of the  foregoing  filed prior to the date hereof and
after March 31, 1997, and all exhibits included therein and financial statements
and schedules  thereto and documents  incorporated by reference  therein,  being
hereinafter  referred to herein as the  "Company  SEC  Documents").  As of their
respective dates or as heretofore amended, the Company SEC Documents complied in
all  material  respects  with  the  requirements  of  the  Exchange  Act  or the
Securities  Act,  as the case may be, and the rules and  regulations  of the SEC
promulgated thereunder applicable to the Company SEC Documents,  and none of the
Company SEC Documents,  at the time they were filed with the SEC,  contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated  therein or necessary in order to make the statements  therein,  in
light of the circumstances  under which they were made, not misleading.  None of

                                       9
<PAGE>

the written  information  supplied by the Company  specifically for inclusion or
incorporation  by reference in any  documents to be filed jointly by the Company
and the Purchasers  with the SEC or any  Governmental  Entity in connection with
the transactions contemplated hereby (including in connection with the Company's
solicitation   of  shareholder   approval  of  an  amendment  to  the  Company's
Certificate of Incorporation  increasing the number of authorized  shares of the
Common Stock) will, on the date of its filing and on the date any such materials
are mailed to  stockholders,  contain any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they are made, not misleading.

          4.8  Financial   Statements.   The  audited   consolidated   financial
               ----------------------
statements  and  unaudited  consolidated  interim  financial  statements  of the
Company included in the Company's Annual Report on Form 10-K for the fiscal year
ended March 30, 2000 (the "Company 10-K") and its Quarterly  Report on Form 10-Q
for the fiscal quarters ended June 29, 2000, September 28, 2000 and December 28,
2000 (the "Company  10-Q") have been  prepared in  accordance  with GAAP and the
published rules and regulations of the SEC applicable  thereto  (except,  in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent  basis during the periods involved (except as may be indicated in the
notes thereto) and fairly  present the  consolidated  financial  position of the
Company  and its  consolidated  Subsidiaries  as of the dates  thereof and their
consolidated  results of  operations  and cash flows for the periods  then ended
(subject to normal  year-end  adjustments  in the case of the unaudited  interim
financial  statements).  For the purposes of this  Agreement,  "Company  Balance
Sheet" means the  consolidated  balance  sheet of the Company as of December 28,
2000 set forth in the  Company  10-Q and  "Company  Balance  Sheet  Date"  means
December 28, 2000.

          4.9  No  Undisclosed  Liabilities.  Neither the Company nor any of its
               ----------------------------
Subsidiaries  has any  liabilities  (whether  accrued,  absolute,  contingent or
otherwise,  and  whether due or to become due or  asserted  or  unasserted)  not
quantified  on the face of the  Company  Balance  Sheet  (other  than the  notes
thereto)  which are of the type  required to be  reflected as  liabilities  on a
balance sheet, except liabilities incurred since the date of the Company Balance
Sheet in the ordinary course of business consistent with past practice which are
not material and liabilities which individually,  or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

          4.10 Litigation.  Except as disclosed in the Company SEC  Documents or
               ----------
listed  on  Schedule  4.10,  there is no  claim,  action,  proceeding,  lawsuit,
            --------------
inquiry,  arbitration  or  investigation  before or by any  court,  governmental
agency, public board,  self-regulatory  organization or body, pending or, to the
knowledge of the Company or any Subsidiary,  threatened against or affecting (a)
the Company, any Subsidiary,  or their respective directors or officers in their
capacities as such, (b) the Company's or any  Subsidiary's  properties or assets
or (c) the validity of this Agreement or any of the other Transaction  Documents
or any  action  taken or to be taken by the  Company  in  connection  with  such
agreements  or the  consummation  of the  transactions  contemplated  hereby  or
thereby  which  if  decided  adversely  to the  Company  or  such  person  would
reasonably be expected to have a Material  Adverse  Effect.  Except as listed on
Schedule  4.10,  neither  the  Company  nor any  Subsidiary  is  subject  to any
--------------
outstanding order, ruling,  judgment or decree that would reasonably be expected
to have a Material Adverse Effect.

                                       10
<PAGE>

          4.11 Compliance  with Laws;  Permits.  Except as set forth on Schedule
               -------------------------------                          --------
4.11, the Company and each  Subsidiary has complied,  in all respects,  with all
----
laws,  rules,  regulations  and orders  applicable to its business,  operations,
properties,  assets,  products and  services,  except where the failure to do so
would not,  individually  or in the aggregate,  reasonably be expected to have a
Material  Adverse Effect.  Except as set forth in Schedule 4.11, the Company and
                                                  -------------
each  Subsidiary has all necessary  permits,  licenses and other  authorizations
required to conduct its  business as  conducted  and as proposed to be conducted
and the Company and each Subsidiary has been operating its business  pursuant to
and in  compliance  with the  terms  of all such  permits,  licenses  and  other
authorizations  except  where  the  failure  to do so would  not  reasonably  be
expected to have a Material  Adverse Effect.  Except as disclosed in the Company
SEC Documents or on Schedule  4.11,  neither the Company nor any  Subsidiary has
                    --------------
received  notification from any Governmental Entity (a) asserting a violation of
any law applicable to the conduct of its business, (b) threatening to revoke any
license, franchise, permit or government authorization, or (c) restricting or in
any way  limiting  its  operations  as  currently  conducted  or  proposed to be
conducted,  in each case which has not  heretofore  been remedied or resolved or
which would not reasonably be expected to have a Material Adverse Effect.

          4.12 Taxes. Except as set forth on Schedule 4.12, the Company and each
               -----                         -------------
Subsidiary has filed, or caused to be filed, all federal and all material state,
local and foreign  income Tax Returns  required to be filed with  respect to the
Company  and each  Subsidiary  in a  timely  manner  (taking  into  account  all
extensions  of due dates) and all such  material Tax Returns were true,  correct
and complete in all material respects.  The Company and each Subsidiary has paid
all material  Taxes and other  governmental  assessments  and charges,  shown or
determined  to be due on such Tax Returns,  except those not yet due and payable
or those being contested in good faith and for which adequate reserves have been
made,  and has set aside on its books  provisions  reasonably  adequate  for the
payment of all Taxes for  periods  subsequent  to the  periods to which such Tax
Returns  apply.  Except as set forth on Schedule  4.5(d),  there are no material
                                        ----------------
unpaid Taxes claimed to be due by the taxing authority of any jurisdiction,  and
the  officers  of the  Company  know of no basis for any such claim  which could
reasonably be expected to have a Material Adverse Effect. Neither the Company or
any  Subsidiary has executed a waiver with respect to any statute of limitations
relating to the assessment or collection of any material federal, state or local
Tax. Except as set forth on Schedule 4.12, none of the Company or any Subsidiary
                            -------------
(a) has been a member  of an  Affiliated  Group  filing a  consolidated  federal
income Tax Return (other than a group the common parent of which is the Company)
or (b) has any liability for the Taxes of any Person (other than the Company and
each  Subsidiary)  under Treasury  Regulation  Section  1.1502-6 (or any similar
provision of state,  local or foreign  law),  as  transferee  or  successor,  by
contract or otherwise.  Except as provided on Schedule 4.12, none of the Company
                                              -------------
or any Subsidiary is a party to any Tax allocation or sharing agreement. The net
operating losses and built-in losses of the Company and each Subsidiary are not,
prior  to the  sale  and  purchase  of the  Preferred  Stock  pursuant  to  this
Agreement,  subject to  limitation  pursuant  to Section 382 of the Code (or any
similar provision of federal, state, local or foreign law).

          4.13 Consents.  Except  as set forth on  Schedule  4.13,  neither  the
               --------                            --------------
execution,  delivery  or  performance  of  this  Agreement  or any of the  other
Transaction  Documents  by  the  Company,  nor  the  consummation  by it of  the
obligations and transactions contemplated hereby or thereby (including,  without
limitation,  the issuance,  the reservation for issuance and the delivery of the
shares of Preferred Stock) requires any consent of,  authorization by, exemption
from,  filing  with or notice to any  Governmental  Entity or any other  Person,
other than (i) the approvals or filings required under the Exchange Act or under
relevant  state blue sky laws,  (ii) approval for listing on the American  Stock
Exchange of the shares of Common Stock issuable upon conversion of the Preferred
Stock and (iii) Shareholder Approval.

                                       11
<PAGE>

          4.14 No Conflicts.  The  execution,  delivery and  performance of this
               ------------
Agreement and each of the other Transaction Documents,  the execution and filing
of the Certificate of  Designations  and the  consummation  of the  transactions
contemplated hereby and thereby (including, without limitation, the issuance and
reservation  for  issuance,  as  applicable,  of the  Preferred  Stock  and  the
Conversion  Shares)  will not (a) except  for the  requirement  for  Shareholder
Approval, result in a violation of the Certificate of Incorporation or Bylaws of
the Company or any Subsidiary,  (b) conflict with or result in the breach of the
terms,  conditions  or  provisions of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give rise
to any right of termination,  acceleration or cancellation  under,  any material
agreement, lease, mortgage, license, indenture,  instrument or other contract to
which  the  Company  or any  Subsidiary  is a party (or any  series  of  related
agreements,  leases,  mortgages,  licenses,  indentures,  instruments  or  other
contracts  that are, in the aggregate,  material),  (c) result in a violation of
any law,  rule,  regulation,  order,  judgment  or  decree  (including,  without
limitation,  U.S. federal and state securities laws and regulations)  applicable
to the  Company  or any  Subsidiary  or by which  any  property  or asset of the
Company or any Subsidiary is bound or affected, or (d) result in the creation of
any Encumbrance upon any of their assets except for such conflicts or violations
referred  to in clause (c) or such  Encumbrances  that would not  reasonably  be
expected  to  have a  Material  Adverse  Effect.  Neither  the  Company  nor any
Subsidiary  is in  violation of its  respective  Certificate  of  Incorporation,
Bylaws or other  organizational  documents,  and  neither  the  Company  nor any
Subsidiary is in default (and no event has occurred which,  with notice or lapse
of time or both,  would  cause the Company or any  Subsidiary  to be in default)
under,  nor has there  occurred any event giving others (with notice or lapse of
time or both) any rights of termination, amendment, acceleration or cancellation
of, any material agreement,  indenture or instrument to which the Company or any
Subsidiary  is a party  except  for  such  violations,  defaults,  terminations,
accelerations  or  cancellations  as would not  reasonably be expected to have a
Material Adverse Effect.

          4.15 Intellectual  Property.  The Company and each of its Subsidiaries
               ----------------------
owns or possesses rights to use all franchises,  licenses, copyrights, copyright
applications,   patents,   patent  rights  or  licenses,   patent  applications,
trademarks,  trademark rights,  trade names,  trade name rights,  copyrights and
rights with respect to the foregoing  which are required to conduct its business
as currently  conducted.  To the knowledge of the Company, no event has occurred
which  permits,  or after  notice  or lapse of time or both  would  permit,  the
revocation or  termination  of any such rights,  and neither the Company nor any
Subsidiary thereof is liable to any Person for infringement under applicable law
with respect to any such rights as a result of its business  operations,  except
for such  infringements  as would not  reasonably be expected to have a Material
Adverse Effect.

          4.16 Foreign  Corrupt   Practices  Act.   Neither  the  Company,   any
               ---------------------------------
Subsidiary, nor any director, officer, Agent, employee or other Person acting on
behalf of the Company or any  Subsidiary  has, in the course of his,  her or its
actions  for,  or on behalf  of,  the  Company or any  Subsidiary  violated  any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended,  or the
regulations thereunder.

                                       12
<PAGE>

          4.17 Material  Contracts.  Except as set forth in Schedule 4.17,  each
               -------------------                          -------------
Material Contract of the Company is the legal,  valid and binding  obligation of
the  Company  or  its  Subsidiary,  enforceable  against  the  Company  or  such
Subsidiary   in   accordance   with  its  terms,   except  to  the  extent  that
enforceability may be limited by bankruptcy,  insolvency,  fraudulent conveyance
or other  similar  laws  affecting  creditors'  rights  generally  or by general
equitable  principles,   regardless  of  whether  enforcement  is  sought  in  a
proceeding at law or in equity.  Except as set forth on Schedule 4.17, there has
                                                        -------------
not occurred any breach,  violation or default or any event that, with the lapse
of time, the giving of notice or the election of any Person,  or any combination
thereof,  would  constitute  a breach,  violation or default by the Company or a
Subsidiary under any such Material Contract or, to the knowledge of the Company,
by any other Person to any such contract,  in any such case as would  reasonably
be  expected  to have a Material  Adverse  Effect.  Neither  the Company nor any
Subsidiary has been notified that any party to any Material  Contract intends to
cancel,  terminate, not renew or exercise an option under any Material Contract,
whether in connection with the transactions contemplated hereby or otherwise.

          4.18 Right of  First  Refusal;  Stockholders'  Agreement;  Voting  and
               -----------------------------------------------------------------
Registration Rights.  Except as set forth on Schedule 4.18, the Company is not a
-------------------                          -------------
party to any agreement  containing  any right of first  refusal,  right of first
offer,  right of co-sale,  preemptive right or other similar right regarding the
Company's   securities.   There  are  no  provisions  of  the   Certificate   of
Incorporation  or the  Bylaws,  and,  except  for this  Agreement  and the other
Transaction  Documents,  there are no agreements to which the Company is a party
by which the Company or any Subsidiary is bound which (a) may affect or restrict
the voting  rights of any Purchaser  with respect to the Preferred  Stock in its
capacity  as a  stockholder  of the  Company,  (b)  restrict  the ability of any
Purchaser,  or any  successor  thereto or assignee  or  transferee  thereof,  to
transfer the Preferred  Stock, and (c) would adversely affect the Company's or a
Purchaser's  right or ability to consummate this Agreement and the  transactions
contemplated  hereby  or  thereby.  Except as set  forth in the  Certificate  of
Incorporation  as it exists as of the date hereof and except as  contemplated by
the  Transaction  Documents,  the Company is not a party to any agreement  which
would (i) require the vote of more than a majority of the  Company's  issued and
outstanding Common Stock,  voting together as a single class, to take or prevent
any  corporate  action,  other than those  matters  requiring a class vote under
Delaware  law or (ii) entitle any party to nominate or elect any director of the
Company  or  require  any of the  Company's  stockholders  to vote  for any such
nominee or other Person as a director of the Company.

          4.19 Insurance.  (a) Each insurance policy,  including  directors' and
               ---------
officers' liability insurance,  maintained by the Company is valid, enforceable,
in full  force and  effect,  and is of such type and amount of  insurance,  with
respect to the Company's  business and properties,  on both a per occurrence and
an aggregate  basis,  as customarily  carried by Persons  engaged in the same or
similar business as the Company and its Subsidiaries.

          (b)  There is no pending  material  claim  under any of the  Company's
policies  and, to the knowledge of the Company,  no event has  occurred,  and no
condition or circumstance exists, that might (with or without notice or lapse of
time) directly or indirectly give rise to or serve as a basis for any such claim
which would reasonably be expected to have a Material Adverse Effect.

                                       13
<PAGE>

          (c)  Except as set forth on  Schedule  4.19(c),  the  Company  has not
                                       -----------------
received:  (i) any  written  notice or  communication  regarding  the  actual or
possible  cancellation  or invalidation of any of such policies or regarding any
actual or possible  adjustment in the amount of premiums payable with respect to
any of said  policies;  (ii) any written notice or  communication  regarding any
actual or  possible  refusal  of  coverage  under,  or any  actual  or  possible
rejection  of any  claim  under,  any of such  policies;  or (iii)  any  written
indication  that the issuer of any such  policies  may be unwilling or unable to
perform any of its obligations  thereunder,  except in each case which would not
reasonably be expected to have a Material Adverse Effect.

          4.20 Environmental Matters. Except as would not reasonably be expected
               ---------------------
to have a Material Adverse Effect, there is no environmental litigation or other
environmental proceeding pending or, to the knowledge of the Company, threatened
by any governmental  regulatory  authority or others with respect to the current
or any former business of the Company or any Subsidiary or of any partnership or
joint  venture  currently  or at any time  affiliated  with the  Company  or any
Subsidiary.  To the  knowledge  of the  Company,  no state of facts exists as to
environmental  matters or Hazardous  Substances  that  involves  the  reasonable
likelihood of a material capital expenditure by the Company or any Subsidiary or
that may otherwise  reasonably be expected to have a Material Adverse Effect. To
the knowledge of the Company, no Hazardous Substances have been treated,  stored
or disposed of, or otherwise deposited,  in or on the properties owned or leased
by the  Company  or  any  Subsidiary  or by any  partnership  or  joint  venture
currently  or at any time  affiliated  with the  Company  or any  Subsidiary  in
violation of any applicable Environmental Laws.

          4.21 Employee  Relations.  (a) The Company and its  Subsidiaries  have
               -------------------
entered into  individualized  written  employment  agreements with the executive
officers  (as such term is defined for  purposes of Item 401 of  Regulation  S-K
under the Securities Act) of the Company and its Subsidiaries listed on Schedule
                                                                        --------
4.21(a) (the "Executive Officers"),  true and complete copies of which have been
-------
delivered  to the  Apollo  Purchasers.  To the  knowledge  of  the  Company,  no
Executive  Officer  of the  Company or any  Subsidiary  is in  violation  of any
material  term of any  employment  contract or any other  contract or  agreement
relating to the  relationship of any such Executive  Officer with the Company or
any Subsidiary.  The Company and each  Subsidiary has operated and  administered
all plans,  programs and  arrangements  providing  compensation  and benefits to
employees in accordance  with their terms and with all applicable laws except as
would not  reasonably  be expected  to have a Material  Adverse  Effect.  To the
Company's knowledge,  no Executive Officer has any plans to terminate his or her
employment  with the  Company  or any  Subsidiary,  nor does the  Company or any
Subsidiary  have any  present  intention  to  terminate  the  employment  of any
Executive Officer.

          (b)  The Company and its  Subsidiaries  are not delinquent in payments
to any of their  employees,  for any wages,  salaries,  commissions,  bonuses or
other direct  compensation for any services performed through the date hereof or
amounts required to be reimbursed to them to the date hereof except as would not
reasonably  be expected to have a Material  Adverse  Effect.  The Company and it
Subsidiaries  are in compliance  with all  applicable  federal,  state and local
laws, rules and regulations respecting employment,  employment practices, labor,
terms and  conditions  of  employment  and wages and hours,  except as would not
reasonably be expected to have a Material Adverse Effect.  Except as provided on
Schedule 4.21(b),  neither the Company nor any Subsidiary is bound by or subject
----------------
to (and none of its assets or  properties is bound by or subject to) any written
or oral commitment or arrangement with any labor union, and, to the knowledge of
the Company,  no labor union has requested or has sought to represent any of the
employees,  representatives or Agents of the Company or any Subsidiary. There is
no labor  strike,  dispute,  slowdown  or stoppage  actually  pending or, to the
knowledge of the Company,  threatened  against or involving the employees of the
Company or of any Subsidiary.

                                       14
<PAGE>

          (c)  All  material  (which  shall  include  all  "Material  Contracts"
involving  the  types of plans,  contracts  and  arrangements  set forth in this
Section   4.21(c))   bonus,   deferred   compensation,    pension,   retirement,
profit-sharing,  thrift, savings,  employee stock ownership,  stock bonus, stock
purchase,  restricted  stock and stock  option  plans,  employment  or severance
contracts,  health and medical  insurance  plans,  life insurance and disability
insurance  plans,   other  material   employee   benefit  plans,   contracts  or
arrangements  which cover  employees  or former  employees of the Company or the
Subsidiaries including,  but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of ERISA (the "Employee  Benefit Plans"),  are listed on
Schedule 4.21(c).  Except as set forth on Schedule 4.21(c),  no Employee Benefit
----------------                          ----------------
Plan is or was collectively  bargained for or has terms requiring  assumption or
any guarantee by the Purchaser.

          (d)  There have been no  violations  of ERISA or the Code  relating to
any Employee  Benefit Plan that could  reasonably be expected to have a Material
Adverse Effect.  All Employee Benefit Plans, to the extent subject to ERISA, are
in substantial  compliance  with their terms and ERISA,  the Code, and all other
applicable law except where the failure to be in compliance would not reasonably
be expected to have a Material Adverse Effect.  The Company has timely filed all
required  documents,  notes and reports  (including IRS Form 5500) for each such
Employee  Benefit  Plan with all  applicable  Governmental  Authorities  and has
timely furnished all required  documents to the participants or beneficiaries of
each such Employee Benefit Plan except where the failure to file or furnish such
reports or documents would not reasonably be expected to have a Material Adverse
Effect.  The Company and the subsidiaries have not incurred and do not expect to
incur any  withdrawal  liability  with  respect  to a  multiemployer  plan under
Subtitle E of Title IV of ERISA in an amount which could  reasonably be expected
to have a Material  Adverse  Effect.  Neither any Employee  Benefit Plan nor any
single-employer  plan of any entity which is  considered  one employer  with the
Company  under  Section  4001 of ERISA  or  Section  414 of the Code (an  "ERISA
Affiliate")  has an  "accumulated  funding  deficiency"  (whether or not waived)
within the  meaning of  Section  412 of the Code or Section  302 of ERISA and no
ERISA Affiliate has an outstanding  funding waiver.  Neither the Company nor any
of its  subsidiaries  has  provided,  or, to the  knowledge of the  Company,  is
required  to  provide,   security  to  any  Employee  Benefit  Plan  or  to  any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Code.  All  contributions  required  to be made under the terms of any  Employee
Benefit  Plan  have  been  timely  made or have been  reflected  on the  audited
financial  statements  of the  Company,  except  where the  failure to make such
contributions  would not  reasonably  be  expected  to have a  Material  Adverse
Effect.

                                       15
<PAGE>


          4.22 Related Party Transactions.  Except as set forth in Schedule 4.22
               --------------------------                          -------------
or in the Company's  proxy  statement  relating to its 2000 Annual  Meeting,  no
director,  officer  or  Affiliate  of the  Company  or  any of the  Subsidiaries
(including,  without limitation,  spouses,  children and relatives of any of the
foregoing) is a party to any material transaction, arrangement or agreement with
the  Company  or  any  Subsidiary  (other  than  transactions,  arrangements  or
agreements  between or among the Company and any of its Subsidiaries)  providing
for the  furnishing  of  services by or to or sale or rental of real or personal
property from or to, or otherwise requiring payments to or by any such Person.

          4.23 Investment  Company  Act.  Neither  the  Company  nor  any of its
               ------------------------
Subsidiaries is an "investment company" or is directly or indirectly  controlled
by or acting on behalf of, any Person that is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

          4.24 Books and Records.  The books of account,  ledgers,  order books,
               -----------------
records  and  documents  of the  Company  and  each  Subsidiary  accurately  and
completely  reflect all  material  information  relating to the  business of the
Company and each Subsidiary,  the location and collection of its assets, and the
nature of all transactions giving rise to the obligations or accounts receivable
of the Company and each Subsidiary.

          4.25 Disclosure.  No event or circumstance has occurred or exists with
               ----------
respect  to the  Company  or any  Subsidiary  or  their  respective  businesses,
properties,  operations  or financial  conditions,  which has not been  publicly
disclosed or which has not been disclosed to the Purchaser but, under applicable
law, rule or  regulation,  would be required to be disclosed by the Company in a
registration  statement  filed on the  date  hereof  by the  Company  under  the
Securities Act with respect to an issuance of the Company's securities.

          4.26 Change of Control.  Without  giving  effect to (x) any  dividends
               -----------------
that may be paid or become  payable on the Preferred  Stock  pursuant to Section
2(b)(5) of the  Certificate of  Designations,  (y) any sale,  transfer,  pledge,
conveyance  or  conversion  of the Class B Shares by the record  holder  thereof
after the date of this Agreement or (z) any acquisition by the Apollo Purchasers
of any shares of Common Stock or Class B Stock after the date hereof (other than
those shares of Common Stock received upon  conversion of the Preferred  Stock),
no Change of Control (as such term is defined in the  indentures  governing  the
Company's  Existing  High Yield  Indebtedness  or as  defined in any  employment
agreements  between the Company and any  Executive  Officer) will occur upon the
following:  (i) the  purchase  of the  Preferred  Stock at  Closing  or (ii) the
payment of  Additional  Series A Securities  or  Additional  Series B Securities
(other  than  shares  paid as  dividends  as set forth in clause  (x)  above) in
accordance with the terms set forth in the  Certificate of Designations  (giving
effect to Section 2(a)(4) thereof).
                                       16

<PAGE>

          5.   Conditions of Parties' Obligations.
               -----------------------------------

          5.1  Conditions of the  Purchaser's  Obligations.  The  obligations of
               -------------------------------------------
each Purchaser under Section 1 hereof are subject to the fulfillment prior to or
on the  Closing  Date of all of the  following  conditions,  any of which may be
waived in whole or in part by the Purchasers.

          (a)  Representations and Warranties  Correct.  The representations and
               ----------------------------------------
warranties  of the Company  under this  Agreement  shall be true,  complete  and
correct  in all  material  respects  (except  with  respect  to  any  provisions
including the word "material" or words of similar import and the  representation
and warranty set forth in Section 4.8 with respect to which such representations
and warranties must be true,  complete and correct) on and as of the date hereof
and on the Closing  Date with the same force and effect as if they had been made
on the Closing Date.

          (b)  Compliance with  Agreement.  The Company shall have performed and
               ---------------------------
complied with all  agreements  and  conditions  required by this Agreement to be
performed or complied with by it on or before the Closing Date.

          (c)  No Material  Adverse  Effect.  No  condition  or event shall have
               ----------------------------
occurred  that has had, or could  reasonably  be  expected  to have,  a Material
Adverse Effect.

          (d)  Supporting  Documents and  Certificate  of Officers.  The Company
               ----------------------------------------------------
shall have delivered to the Purchaser the supporting  documents and certificates
set forth on Annex 5.1(d) hereto. ------------

          (e)  Opinion of the Company's  Counsel.  The Apollo  Purchasers  shall
               ---------------------------------
have received from Skadden,  Arps, Slate,  Meagher & Flom LLP and Lathrop & Gage
L.C.,  counsel  for the  Company,  favorable  opinions  dated the  Closing  Date
substantially in the form of Annex 5.1(e) hereto.

          (f)  Certificate of  Designations.  The  Certificate  of  Designations
               ----------------------------
substantially  in  the  form  of  Annex  5.1(f)  hereto  (the   "Certificate  of
                                  -------------
Designations")  shall have been duly  adopted  and  executed  and filed with the
Secretary of State of the State of Delaware,  the Company shall not have adopted
or filed any other document designating terms, relative rights or preferences of
the Preferred Stock, the Certificate of Designations  shall be in full force and
effect  as of the  Closing  under the laws of  Delaware  and shall not have been
amended or modified,  and a copy of the Certificate of Designations certified by
the  Secretary  of State of the State of Delaware  shall have been  delivered to
counsel for the Purchasers.

          (g)  Composition  of Board of  Directors.  On the  Closing  Date,  the
               -----------------------------------
Company's Board of Directors shall be expanded to eight persons comprising those
five  persons  elected to the Board of Directors  at the  Company's  2000 Annual
Meeting and the three designees of the Apollo Purchasers.  Specifically,  AIF IV
shall have the right to elect one member to Board of Directors, AIF V shall have
the  right  to  elect  one  member  to the  Board of  Directors  and the  Apollo
Purchasers,  collectively, shall have the right to elect the third member to the
Board of Directors.  If for any reason, any director appointed by any of AIF IV,
AIF V or the Apollo  Purchasers ceases to be a director before the expiration of
his or her term, and the Apollo  Purchasers have Preferred Stock Approval Rights
at such time,  the Apollo  Purchaser  who elected such  director  shall have the
right to appoint a director to fill such vacancy. In addition, to the extent AIF
IV or AIF V, as the  case  may be,  is no  longer  a  holder  of any  shares  of
Preferred  Stock and the Apollo  Purchasers have Preferred Stock Approval Rights
at such  time,  the  right of AIF IV or AIF V, as the  case  may be,  to elect a
member to the Board of Directors shall be deemed transferred to AIF V or AIF IV,
as the case may be. To the  extent  neither  AIF IV nor AIF V is a holder of any
shares of  Preferred  Stock  and the  Apollo  Purchasers  have  Preferred  Stock
Approval Rights at such time, the Apollo  Purchasers,  collectively,  shall have
the right to elect the two members of the Board of Directors  previously elected
by AIF IV and AIF V.

                                       17
<PAGE>
          (h)  Transaction  Documents.  The  Company  shall  have  executed  and
               ----------------------
               delivered each of the Transaction  Documents,  each substantially
               in the form of Annex 5.1(h) hereto.

          (i)  Board  Resolution  and Bylaw  Amendment.  The Board of  Directors
               ---------------------------------------
shall have adopted (i) resolutions of the Board of Directors,  substantially  in
the form attached hereto as Annex 5.1(i)(1),  which  resolutions  shall include,
among other  items,  the  establishment  of a Nominating  Committee  and matters
relating to Capital Expenditures,  amendments to the Senior Facility and certain
employment  arrangements for Executive  Officers (the "Board  Resolutions")  and
(ii) the Bylaw Amendments in the form attached hereto as Annex 5.1(i)(2).

          5.2  Conditions of Company's  Obligations.  The Company's  obligations
               ------------------------------------
under Section 1 hereof are subject to the fulfillment prior to or on the Closing
Date of the following conditions, any of which may be waived in whole or in part
by the Company.

          (a)  Representations and Warranties  Correct.  The representations and
               ---------------------------------------
warranties of the Purchaser under this Agreement shall in all material  respects
be true,  correct and complete (except with respect to any provisions  including
the word "material" or words of similar import,  which such representations must
be true,  complete  and correct) on and as of the date hereof and on the Closing
Date  with the same  force and  effect  as if they had been made on the  Closing
Date.

          (b)  Compliance with Agreement. The Purchaser shall have performed and
               --------------------------
complied with all  agreements  and  conditions  required by this Agreement to be
performed or complied with by it on or before the Closing Date.

          (c)  Payment of Purchase  Price.  The Company shall have received from
               ---------------------------
the Purchasers the Purchase Price as set forth on Schedule 1 hereto.

          (d)  Standstill  Agreement.  The Apollo Purchasers shall have executed
               ---------------------
and  delivered  the  Standstill  Agreement,  substantially  in the form of Annex
5.1(h) hereto.

          5.3  Conditions   of  Each   Party's   Obligations.   The   respective
               ---------------------------------------------
obligations of each party to consummate the transactions  contemplated hereunder
are subject to the fulfillment  prior to or on the Closing Date of the following
conditions:

          (a)  No Injunction.  No Governmental  Entity or any other Person shall
               --------------
have issued an order which shall then be in effect  restraining  or  prohibiting
the  completion  of  the  transactions  contemplated  hereby  or  by  the  other
Transaction Documents, nor shall any such order be threatened or pending.

                                       18
<PAGE>

          (b)  Absence of  Litigation.  The  Purchasers and the Company shall be
               ----------------------
satisfied  as to the absence of  litigation  which could  result in the award of
significant  damages or which seeks to enjoin or void any material aspect of the
transactions contemplated by this Agreement or by the Transaction Documents.

          (c)  Approvals.  The Company shall have obtained any and all consents,
               ---------
waivers, approvals or authorizations, with or by any Governmental Entity and all
material  consents,  waivers,  approvals or  authorizations  of any other Person
required  for  the  valid  execution  of  the  Transaction   Documents  and  the
consummation of the transactions  contemplated hereby,  including the consent of
the Company's  Senior Lenders,  except for such consents,  waivers  approvals or
authorizations  the failure of which to obtain would not  reasonably be expected
to have a Material Adverse Effect.

          6.   Covenants.  The Company  agrees that until the earlier of (x) the
               ---------
Closing Date or (y) the  termination of this Agreement  pursuant to Section 12.3
(provided,  however,  that  the  obligations  of  the  Company  pursuant  to the
provisions  of Sections 6.3 and 6.5 shall survive the Closing for so long as the
Apollo Purchasers possess Preferred Stock Approval Rights and the obligations of
the Company  pursuant to the  provisions  of Sections  6.6,  6.8,  and 6.9 shall
survive the Closing  until the  redemption of all of the  outstanding  shares of
Preferred  Stock or  conversion  of all of the  outstanding  shares of Preferred
Stock  ultimately into Common Stock),  the Company (and each of its Subsidiaries
unless the context otherwise requires) will do the following:

          6.1  Maintain  Corporate Rights and Facilities.  Maintain and preserve
               -----------------------------------------
its  corporate  existence  and all  rights,  franchises,  licenses,  trademarks,
service marks, trade names,  copyrights and other authority, in each case to the
extent  reasonably  deemed  adequate  by the  Company  for  the  conduct  of its
business.  Maintain its  properties,  equipment and facilities in good order and
repair;  and  conduct  its  business  in an  orderly  manner  without  voluntary
interruption  except where failure to do so would not  reasonably be expected to
have a Material Adverse Effect.

          6.2  Maintain Insurance. Maintain in full force and effect a policy or
               ------------------
policies of insurance issued by insurers of recognized responsibility,  insuring
it and its  properties and business  against such losses and risks,  and in such
types and amounts of  insurance,  with  respect to the  Company's  business  and
properties,  on both a per occurrence and an aggregate basis, as are customarily
carried by Persons  engaged in the same or similar  business  as the Company and
its Subsidiaries.

                                       19
<PAGE>

          6.3  Information Rights.
               ------------------

          (a)  Access to Records.
               -----------------

          The Company shall,  and shall cause each  Subsidiary to, afford to the
Apollo  Purchasers  and  their  respective  Affiliates,   officers,   employees,
advisors,  counsel and other authorized  representatives  (collectively with the
Affiliates  of the Apollo  Purchasers,  the  "Representatives"),  during  normal
business hours, reasonable access, upon reasonable advance notice, to all of the
books,  records  and  properties  of the  Company  and such  Subsidiary  and all
officers and employees of the Company and such Subsidiary. Subject to compliance
with customary confidentiality obligations,  each Apollo Purchaser shall also be
entitled to receive copies of all confidential financial information and reports
prepared for the Company's  lenders promptly upon furnishing such information to
such lenders. The Apollo Purchasers and their Representatives shall maintain the
confidentiality  of any confidential and proprietary  information  regarding the
Company and its Subsidiaries;  provided, however, that the foregoing shall in no
                               --------  -------
way limit or otherwise  restrict the ability of the Apollo  Purchasers or any of
their  Representatives  to disclose any such information  concerning the Company
and each Subsidiary  which it may be required to disclose (i) to its partners or
limited partners to the extent required to satisfy its fiduciary  obligations to
such Persons,  provided that the recipients of such information are informed of,
               --------
and  agree  to be bound  by,  the  confidentiality  provisions  hereof,  or (ii)
otherwise pursuant to or as required by law.

          (b)  Financial Reports.
               -----------------

          The Company  shall  furnish each  Purchaser,  promptly  upon  becoming
available, copies of all financial statements, reports, press releases, notices,
proxy  statements and other documents sent by the Company or its Subsidiaries to
its  stockholders  generally or released to the public and copies of all regular
and periodic reports,  if any, filed by the Company or its Subsidiaries with the
SEC,  any  securities  exchange or the NASD to the extent  such  reports are not
publicly available via EDGAR.

          6.4  Conduct of Business.  Conduct its business in accordance with all
               -------------------
applicable  provisions  of federal,  state,  local and foreign  law,  except for
either (i) instances of noncompliance  which would not reasonably be expected to
have a Material Adverse Effect or (ii) instances of  noncompliance  which are or
may be reasonably  cured without the incurrence by the Company or any Subsidiary
of any material cost or liability.

          6.5  Indemnification  of the Board of  Directors.  The  Company  shall
               -------------------------------------------
reimburse  all  directors  of the  Company  for their  reasonable  out-of-pocket
expenses  in  connection  with  attending  meetings  of the  Company's  Board of
Directors and all committees thereof and all reasonable  out-of-pocket  expenses
otherwise incurred in fulfilling their duties as directors. The Company's Bylaws
or  charter  shall  at  all  times  require  the  indemnification  of all of the
Company's  directors against liability for actions and omissions to act in their
capacity as directors of the Company to the maximum extent that such individuals
may  lawfully be so  indemnified  by the  Company.  The Company  shall  maintain
directors'  and  officers'  liability  insurance  in an amount equal to at least
$25,000,000.00.

                                       20
<PAGE>

          6.6  Reservation  of Common Stock.  The Company shall reserve and keep
               ----------------------------
available out of its authorized but unissued  Common Stock (that is not reserved
for issuance under any stock or option plan or upon conversion of Class B Stock)
the number of shares  required for issuance upon the conversion of the Preferred
Stock  and  otherwise  complying  with  the  terms of this  Agreement,  it being
understood that the Company will require Shareholder  Approval before it is able
to reserve any shares of Common Stock  issuable upon  conversion of the Series A
Preferred Stock that, in turn,  would have been issued upon conversion of Series
B Preferred  Stock.  If at any time the number of authorized but unissued shares
of  Common  Stock  shall  not be  sufficient  to effect  the  conversion  of the
Preferred  Stock or  otherwise to comply with the terms of this  Agreement,  the
Company will use its reasonable best efforts to obtain  Shareholder  Approval in
accordance with Section 6.9 and shall take such other corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes.  The Company will use
its best reasonable  efforts to obtain any authorization,  consent,  approval or
other action by, and shall make any filing with any court or administrative body
that may be required under  applicable  state securities laws in connection with
the issuance of shares of Common Stock upon conversion of the Preferred Stock.

          6.7  Advice of Changes;  Filings.  The Company  shall  confer with the
               ---------------------------
Purchasers  on a regular  and  frequent  basis as  reasonably  requested  by the
Purchasers,  orally and, if requested by Purchaser,  in writing,  with regard to
any change that has had a Material  Adverse  Effect.  The Company shall promptly
provide to the Purchasers  (or their counsel)  copies of all filings made by the
Company or any Affiliate with any  Governmental  Entity in connection  with this
Agreement and the transactions contemplated hereby.

          6.8  Tax Treatment of the Preferred Stock. The Company agrees to treat
               ------------------------------------
the  Series A  Preferred  Stock and the Series B  Preferred  Stock as stock that
participates  in the  corporate  growth of the Company to a  significant  extent
within the  meaning of  Treasury  Regulation  ss.1.305-5(a),  and hence will not
treat the Preferred  Stock as  "preferred  stock" for purposes of Section 305 of
the Code and the Treasury Regulations promulgated thereunder, unless required to
treat it otherwise  pursuant to a "determination"  within the meaning of Section
1313(a) of the Code. The Apollo  Purchasers  shall be entitled to receive prompt
notice of any Tax assessment,  deficiency, audit or judicial proceeding received
by the Company or of which the Company is aware that  relates to the taxation of
the Preferred Stock. The Apollo  Purchasers shall indemnify,  and hold harmless,
the Company  for any Taxes  imposed on or incurred by the Company as a result of
any  "determination"  that the Preferred Stock is "preferred stock" for purposes
of Section  305 of the Code and  Treasury  Regulations  promulgated  thereunder;
provided that the Apollo  Purchasers  (i) have  received  prompt notice from the
Company of any tax assessment, deficiency, audit or judicial proceeding received
by the Company or of which the Company is aware that  relates to the taxation of
the Preferred  Stock,  (ii) are given the  opportunity to  participate,  whether
directly or  indirectly,  through the Company or counsel to the Company,  in all
proceedings  that  affect  the  taxation  of  Preferred  Stock,  and (iii)  have
consented to any closing or other agreement with the IRS or final disposition of
a claim for refund by the IRS that affects the taxation of the Preferred  Stock.
In  the  event  the   Preferred   Stock  is   outstanding   at  the  time  of  a
"determination," the Company will use its reasonable best efforts to restructure
such Preferred  Stock,  with the advice and subject to the consent of the Apollo
Purchasers, so that the Preferred Stock will not be treated as "preferred stock"
for purposes of Section 305 of the Code and the Treasury Regulations promulgated
thereunder.

                                       21
<PAGE>

          6.9  Solicitation of Shareholder  Approval.  The Company shall solicit
               -------------------------------------
Shareholder  Approval at its next regularly  scheduled annual meeting  following
the Closing Date (the  "Initial  Solicitation")  which shall take place no later
than 270 days after the Closing Date. In addition, until Shareholder Approval is
obtained,  the Company  shall  solicit  such  Shareholder  Approval  whenever it
solicits  proxies  subject  to  Section  14(a)  of the  Exchange  Act and  until
Shareholder Approval is obtained, any shares of Common Stock that are authorized
after the date hereof shall be reserved for issuance (i) subject to Section 8 of
this  Agreement,  upon the  exercise of options  pursuant to any option plan and
(ii) upon  conversion  of Series A Preferred  Stock to allow for exchange of the
Series B Preferred Stock into the Series A Preferred Stock (including the Series
A Preferred Stock that would be received upon a conversion of Series B Preferred
Stock).

          6.10 Board  Resolution  and Bylaw  Amendment.  The Board of  Directors
               ---------------------------------------
shall have adopted (a) resolutions of the Board of Directors,  substantially  in
the form attached hereto as Annex 5.1(i)(1),  which  resolutions  shall include,
                            ---------------
among other  items,  the  establishment  of a Nominating  Committee  and matters
relating to capital  expenditures,  amendments to the Company's  Senior Facility
and  certain   employment   arrangements  for  Executive  Officers  (the  "Board
Resolutions")  and (b) the Bylaw Amendments in the form attached hereto as Annex
                                                                           -----
5.1(i)(2).
---------

          6.11 Listing  Obligation.  The Company will take all reasonable  steps
               -------------------
necessary,  and pay all reasonable  fees required,  to list all of the shares of
Common Stock issuable upon any conversion of shares of Series A Preferred  Stock
(including such additional shares as may be issuable after Shareholder  Approval
or as dividends) on the American Stock Exchange or such other stock exchanges or
systems of automated  dissemination  of quotations  of securities  prices in the
United  States on which the Common Stock is then listed.  Following  the initial
listing of such shares,  the Company  shall use its  reasonable  best efforts to
maintain  the listing of such shares for so long as the  Company's  Common Stock
continues to be listed on any such exchange where the Common Stock is listed.

          7.   Negative Covenants.
               ------------------

          7.1  No Solicitation.  On the date hereof, the Company shall and shall
               ---------------
cause each Subsidiary and its Subsidiaries'  officers and directors to, and each
of the foregoing shall cause their respective Agents, representatives,  advisors
or  subsidiaries,  to cease any  discussions  or  negotiations  with any parties
(other  than  the  Purchaser)  that  may be  ongoing  with  respect  to (A)  any
acquisition  or purchase  of a material  amount of assets of the Company and its
Subsidiaries  (other than properties  disclosed in writing to Apollo as possible
candidates for  disposition),  (B) the purchase of any equity  securities of the
Company or any Subsidiary (including a self tender offer) or any securities that
are convertible,  exchangeable or exercisable for any equity securities, (C) any
merger,  consolidation,  business combination, sale of substantially all assets,
recapitalization,  liquidation, dissolution or similar transaction involving the
Company or any Subsidiary (other than a Permitted Acquisition), or (D) any other

                                       22
<PAGE>

transaction the consummation of which would, or could reasonably be expected to,
impede,   interfere  with,   prevent  or  materially   delay  the   transactions
contemplated by this Agreement or which would,  or could  reasonably be expected
to,  materially  dilute  the  benefits  to the  Purchaser  of  the  transactions
contemplated  hereby (each of the foregoing  items set forth in (A) through (D),
an  "Alternative  Transaction").  From the date hereof through the Closing Date,
the Company shall not, shall cause each Affiliate not to and shall not authorize
or permit any of its or any such  Person's  officers,  directors or employees or
any  investment  banker,  financial  advisor,  attorney,   accountant  or  other
representative  representing  any such Person to,  directly or  indirectly,  (i)
solicit, initiate or encourage (including by way of furnishing information),  or
take any other action to facilitate, any inquiries or the making of any proposal
that may lead to an Alternative  Transaction  (it being  understood  that public
announcement  of the execution of this  Agreement,  and  disclosure of the terms
thereof,  shall not in any way be deemed to be a  solicitation  in  violation of
this clause (i)) or (ii) participate in any discussions or negotiations with any
third party regarding any proposed Alternative  Transaction unless the Company's
Board of  Directors  determines  in good faith that  failure to take such action
would  be  a  violation  of  its   fiduciary   duties  under   applicable   law.
Notwithstanding  anything  else  in  this  Agreement  to  the  contrary,  if the
Company's  Board  of  Directors  determines  in  good  faith  the  terms  of any
Alternative  Transaction are more favorable to the Company and its  shareholders
than the transactions  contemplated by this Agreement, the Company may terminate
this  Agreement.  In the  event  the  Company  or any  of  its  Subsidiaries  or
Affiliates  receives an indication of interest or engages in any  discussions or
negotiations  with any parties (other than the  Purchasers)  with respect to any
Alternative Transaction, the Company shall promptly notify the Apollo Purchasers
of such occurrence within two business days.

          8.   Protective Provisions.
               ---------------------

          8.1  Preferred Stock Approval Rights.  In addition to any other rights
               -------------------------------
provided  by  applicable  law,  as long as the  Apollo  Purchasers  continue  to
beneficially  own shares of Preferred  Stock  representing  more than 50% of the
Preferred Stock issued  pursuant to this  Agreement,  the Company shall not, and
shall not permit any Subsidiary to, without the prior written consent of Apollo,
acting at the direction of the Apollo Purchasers:

          (a)  amend,  alter  or  repeal,  whether  by  merger,   consolidation,
combination,  reclassification or otherwise, the Certificate of Incorporation or
the Bylaws of the Company, or any provision thereof (including the adoption of a
new provision thereof);

          (b)  create,  authorize  or issue  any  class,  series  or  shares  of
preferred stock (other than Additional  Securities  issued pursuant to section 2
of the  Certificate  of  Designations)  or any other class,  series or shares of
capital stock (other than capital stock intended to be used in the redemption of
the Preferred  Stock or to be authorized and issued  pursuant to the Shareholder
Approval);  or amend or alter the rights provided in any class, series or shares
of preferred stock or any other class of capital stock;

          (c)  purchase,  redeem,  repurchase or otherwise acquire for value (or
pay into or set aside a sinking fund for such  purpose)  shares of the Company's
capital   stock  or  of  any   Affiliate   thereof   (other  than   Wholly-Owned
Subsidiaries)(except for redemptions or repurchases of Preferred Stock or Common
Stock  issued upon  conversion  of the  Preferred  Stock) or any other  options,
warrants or other rights to acquire such capital stock;

                                       23
<PAGE>

          (d)  pay any  dividend  or declare any  distribution  on any shares of
stock  (subject to Section  8.1(b) above,  excluding  (i) dividends  paid to the
Company  by  any  of  its  Wholly-Owned   Subsidiaries  and  (ii)  dividends  or
distributions payable in shares of its capital stock or in options, warrants, or
other  rights  to  purchase  such  capital  stock  but  including  dividends  or
distributions payable in shares of Redeemable Capital Stock or options, warrants
or other rights to purchase  Redeemable  Capital Stock (other than  dividends on
Redeemable  Capital Stock payable in such Redeemable  Capital Stock) held by any
person other than the Company or any of its Wholly-Owned Subsidiaries);

          (e)  redeem,  prepay,  defease or repurchase any  indebtedness  of the
Company (other than Permitted Debt Repayments);

          (f)  merge,  consolidate or consummate a similar transaction involving
the Company (other than a merger,  consolidation or similar  transaction between
the  Company  and a direct or indirect  Wholly-Owned  Subsidiary  of the Company
which transaction would not adversely impact the rights of the Preferred Stock);

          (g)  incur any indebtedness  (excluding any borrowings in the ordinary
course of business under the Company's Senior Facility), other than debt that is
used to redeem the Preferred Stock and other Permitted Indebtedness, or amend or
alter the material terms of any existing or future material senior  indebtedness
(including  term loans,  revolvers and other  similar bank loans,  but excluding
indebtedness  incurred  under the  Company's  Senior  Facility);  provided,  the
Company may amend or renew the Senior Facility;

          (h)  voluntarily  initiate any liquidation,  dissolution or winding up
of the  Company or permit  the  commencement  of a  proceeding  for  bankruptcy,
insolvency, receivership or similar action;

          (i)  enter into any Affiliate Transactions;

          (j)  increase or decrease  the size of the Board of  Directors  of the
Company; or

          (k)  acquire or dispose  (for either  cash or non-cash  consideration)
of, in a single transaction or a series of related transactions, any business or
assets (including  investments in third parties) with an aggregate value in such
transaction  or  series  of  related   transactions  in  excess  of  $25,000,000
(including all assumed debt, all cash payments, and the fair market value of all
securities or other property issued as consideration).

Collectively, the consents of the Apollo Purchasers required by this Section 8.1
shall be hereinafter referred to as the "Preferred Stock Approval Rights."
                                         -------------------------------

          8.2  Committees  of the  Board  of  Directors.  So long as the  Apollo
               ----------------------------------------
Purchasers  continue to possess  Preferred  Stock Approval Rights and subject to
the provisions of applicable law and the fiduciary  duties of the members of the
Board of Directors,  a member of the Board of Directors designated by the Apollo
Purchasers pursuant to Section 5.1(g) shall be nominated to serve on each of the
committees of the Board of Directors, including the Nominating Committee.

                                       24
<PAGE>

          9.   Transfer Restrictions.
               ---------------------

          9.1  Private Placement. Each Purchaser understands and agrees that the
               -----------------
shares of Preferred  Stock to be purchased  hereunder  have not been  registered
under the  Securities  Act by reason of their  issuance in a transaction  exempt
from the  registration  requirements of the Securities Act, and that accordingly
they will not be fully transferable except as permitted under various exemptions
contained in the Securities Act or upon  satisfaction  of the  registration  and
prospectus   delivery   requirements  of  the  Securities  Act.  Each  Purchaser
acknowledges  that it must bear the  economic  risk of the  shares of  Preferred
Stock to be  purchased  hereunder  for an  indefinite  period of time  (subject,
however, to the Company's obligation to redeem the Preferred Stock in accordance
with  the  terms  thereof,  and  to  the  Company's  obligation  to  effect  the
registration  of  the  registrable   securities  under  the  Securities  Act  in
accordance  with the  Registration  Rights  Agreement)  since they have not been
registered under the Securities Act and therefore cannot be sold unless they are
subsequently  registered or an exemption from  registration  is available.  Each
Purchaser  understands that the exemption from registration afforded by Rule 144
promulgated  under the Securities Act depends upon the  satisfaction  of various
conditions and that, if applicable, Rule 144 affords the basis for sales only in
limited amounts.  Furthermore,  except as set forth in the  Registration  Rights
Agreement,  the Company has not agreed to make Rule 144 available for any resale
of the  Preferred  Stock or the shares of Common Stock into which the  Preferred
Stock is convertible.

          9.2  Legend.   Each  Purchaser   agrees  with  the  Company  that  the
               ------
certificates  evidencing the shares of Preferred Stock to be purchased hereunder
will bear the following legend:

     THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  AND MAY NOT BE SOLD OR  TRANSFERRED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES OR THE SECURITIES ARE SOLD AND  TRANSFERRED IN A TRANSACTION  THAT IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS  DELIVERY  REQUIREMENTS OF SUCH ACT.
THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  ARE  SUBJECT  TO  CERTAIN
LIMITATIONS  ON TRANSFER SET FORTH IN A STANDSTILL  AGREEMENT  DATED AS OF APRIL
19, 2001  BETWEEN AMC  ENTERTAINMENT  INC.  AND CERTAIN  OTHER  INVESTORS  NAMED
THEREIN,  COPIES OF WHICH ARE ON FILE WITH THE  SECRETARY  OF AMC  ENTERTAINMENT
INC.

          9.3  Removal of Legend.  The  Securities  Act legend  endorsed  on the
               -----------------
certificates  pursuant  to Section  9.2 hereof  shall be removed and the Company
shall issue a certificate without such legend to the holder thereof at such time
as the securities  evidenced thereby cease to be restricted  securities upon the
earliest to occur of (i) a  registration  statement  with respect to the sale of
such  securities  shall have become  effective under the Securities Act and such
securities  shall have been  disposed of in  accordance  with such  registration
statement,  (ii) the securities  shall have been sold to the public  pursuant to
Rule 144 (or any successor  provision)  under the Securities  Act, or (iii) such
securities may be sold by the holder without  restriction or registration  under
Rule 144(k) under the Securities Act (or any successor provision).

                                       25
<PAGE>

          9.4  Standstill  Agreement.  Subject  to the  terms of the  Standstill
               ---------------------
Agreement and Section 9.5, the Preferred  Stock shall be freely  transferable by
the holders  thereof;  provided that the Purchasers shall provide written notice
to the Company within three days of any transfer of Preferred Stock.

          9.5  Restrictions on Conversion of Series A Preferred.
               ------------------------------------------------

          (a)  During the period commencing on the date hereof and ending on the
fifth  anniversary  of the date  hereof,  the  Purchasers  shall not convert any
shares of Series A Preferred Stock into Common Stock,  except in connection with
a Disposition effected pursuant to paragraph (b) below.

          (b)  If, at any time during the period  commencing  on the date hereof
and ending on the fifth  anniversary  of the date hereof,  any Apollo  Purchaser
desires to effect a Disposition of any shares of Series A Preferred Stock to any
person  other than members of the Apollo  Group and Other  Investor  Affiliates,
such Apollo  Purchaser may, as part of such  Disposition,  elect to convert such
shares of Series A Preferred Stock into Common Stock,  prior to transfer to such
purchasing  Person.  In order to convert shares of Preferred Stock to effect any
such Disposition,  the selling Apollo Purchaser shall deliver to the Company, on
or before the proposed  settlement date of such  Disposition,  written notice of
its intention to convert  Series A Preferred  Stock as part of a Disposition  (a
"Disposition  Notice").  The  Disposition  Notice  shall set forth the number of
shares of Series A Preferred  Stock that shall be converted  into Common  Stock,
the sale  price for such  shares  and the  purchasing  Person in whose  name the
Common Stock shall be registered. Upon surrender by the selling Apollo Purchaser
of  certificates  representing  the shares of Series A Preferred  Stock that are
being  converted  as part of such  Disposition,  the Company  shall issue to the
purchasing Person certificates  representing the appropriate number of shares of
Common Stock. Any Disposition  pursuant to a third party made under this Section
9.5 or  Section  5.2(b)  of the  Standstill  Agreement  shall  comply  with  the
provisions of Section 5.1 of the Standstill Agreement.

          9.6  Series B Preferred  Stock.  The Purchasers  shall not transfer to
               --------------------------
any Person  (other  than  their  respective  Affiliates)  any shares of Series B
Preferred  Stock  until a date that is eighteen  (18)  months  after the Closing
Date.

          9.7  Preferred  Stock Approval  Rights.  The Preferred  Stock Approval
               ----------------------------------
Rights  granted  to the Apollo  Purchasers  are not  transferable  by the Apollo
Purchasers and shall be exercised solely by Apollo.  The Apollo  Purchasers will
not  enter  into any  agreements  with  any  person  or  entity  limiting  their
discretion  with  respect to the  exercise  of their  Preferred  Stock  Approval
Rights.  In the event (i) the Apollo Purchasers or their Affiliates cease to own
at least 50% of the  Preferred  Stock  issued,  (ii) Apollo is terminated as the
investment  manager,  or (iii) an Affiliate is removed as the general partner of
the Apollo  Purchasers (and, in either case, such terminated or removed party is
not replaced by an Affiliate of Apollo),  Apollo and the Apollo Purchasers shall
promptly  notify the Company and the Preferred  Stock Approval Rights granted to
the Apollo Purchasers shall terminate.

                                       26
<PAGE>


          10.  Definitions.  Unless the context  otherwise  requires,  the terms
               -----------
defined in this Section 10 shall have the meanings specified for all purposes of
this Agreement.

          Except as otherwise expressly  provided,  all accounting terms used in
this Agreement, whether or not defined in this Section 10, shall be construed in
accordance  with United  States  GAAP.  If and so long as the Company has one or
more  Subsidiaries,  such accounting terms shall be determined on a consolidated
basis for the Company and each of its Subsidiaries, and the financial statements
and other financial  information to be furnished by the Company pursuant to this
Agreement  shall be  consolidated  and presented  with  consolidating  financial
statements  of the Company and each of its  Subsidiaries  prepared in accordance
with GAAP.

          "Additional  Securities" shall mean the shares of Preferred Stock that
are issued to the holders of  Preferred  Stock as payment of  dividends  thereon
pursuant to the Certificate of Designations.

          "Additional Series A Securities" shall have the meaning assigned it in
the Certificate of Designations.

          "Additional Series B Securities" shall have the meaning assigned it in
the Certificate of Designations.

          "Affiliate"  means,  with respect to any Person,  (i) any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common  control with,  such specified  Person;  (ii) any other Person that owns,
directly or  indirectly,  ten percent or more of such Person's  capital stock or
other  equity  interests  or any officer or director of any such Person or other
Person;  or (iii)  with  respect to any  natural  Person,  any  person  having a
relationship  with such Person by blood,  marriage  or adoption  not more remote
than first cousin; provided,  however, that with respect to Apollo or the Apollo
                   --------   -------
Purchasers,  the term  "Affiliate"  shall not include any limited partner of the
Apollo Purchasers or their Affiliates nor any portfolio or investee companies of
the Apollo Purchasers or their Affiliates so long as, in either case, (x) Apollo
does not  control or have  investment  authority  over such  limited  partner or
portfolio or investee company; (y) such limited partner or portfolio or investee
company  does not  operate in the  domestic  theatrical  exhibition  industry or
otherwise  compete  with the Company  and (z) Apollo  does not own,  directly or
indirectly, 33% or more of such portfolio or investee company's capital stock or
other equity  interests.  For purposes of this  definition,  "control" when used
with respect to any  specified  Person means the power to direct the  management
and  policies  of such  Person,  directly  or  indirectly,  whether  through the
ownership  of  voting  securities,  by  contract  or  otherwise;  and the  terms
"controlling" and "controlled" shall have correlative meanings.

          "Affiliate  Transaction"  shall  mean any  transaction  or  series  of
related  transactions  (including,   without  limitation,  the  sale,  purchase,
exchange or lease of assets,  property or  services)  with any  Affiliate of the
Company (other than a direct or indirect Wholly-Owned Subsidiary of the Company)
involving  aggregate  consideration  in excess  of $5  million  unless  (A) such
transaction or series of  transactions is on terms that are no less favorable to
the Company or such  Subsidiary,  as the case may be, than would be available at
the  time  of  such  transaction  or  series  of  transactions  in a  comparable
transaction in an arms-length dealing with an unaffiliated third party, (B) such

                                       27
<PAGE>

transaction  or series of  transactions  is in the best interests of the Company
and (C) with  respect  to a  transaction  or  series of  transactions  involving
aggregate  payments  equal  to or  greater  than  $50  million,  a  majority  of
disinterested members of the Board of Directors determines that such transaction
or series of transactions  complies with clauses (A) and (B) above, as evidenced
by a Board Resolution; provided, however, that notwithstanding the foregoing the
                       --------  -------
following  transactions  shall not be  deemed  Affiliate  Transactions:  (i) any
transaction  pursuant to any contract in existence on the Initial Issuance Date;
(ii)  any  "Restricted  Payment"  (as such  term is  defined  in the  indentures
governing the Company's Existing High Yield  Indebtedness)  permitted to be made
pursuant to the provisions of such Existing High Yield  Indebtedness;  (iii) any
transaction or series of transactions between the Company and one or more of its
Subsidiaries or between two or more of its  Subsidiaries  (provided that no more
than 5% of the equity  interest  in any such  Subsidiary  is owned,  directly or
indirectly (other than by direct or indirect  ownership of an equity interest in
the Company),  by any Affiliate of the Company other than a Subsidiary) and (iv)
the payment of compensation (including amounts paid pursuant to employee benefit
plans) for the personal  services of officers,  directors  and  employees of the
Company or any of its Subsidiaries.

          "Affiliated  Group" shall mean any affiliated group within the meaning
of Section  1504(a) of the Code (or any similar  group  defined  under a similar
provision of state, local or foreign law).

          "Agent" of a Person shall mean any officer, director, employee, agent,
partner stockholder or Affiliate of such Person.

          "Agreement" shall mean this Investment Agreement.

          "AIF  IV"  shall  have the  meaning  assigned  it in the  introductory
paragraph.

          "AIF  V"  shall  have  the  meaning  assigned  it in the  introductory
paragraph.

          "Apollo"  shall  have  the  meaning  assigned  it in the  introductory
paragraph.

          "Apollo Group" shall have the meaning  assigned it in Section 1.1.4 of
the Standstill Agreement.

          "Apollo  Management  IV" shall  have the  meaning  assigned  it in the
introductory paragraph.

          "Apollo  Management  V" shall  have  the  meaning  assigned  it in the
introductory paragraph.

          "Apollo IV  Purchasers"  shall  have the  meaning  assigned  it in the
introductory paragraph.

                                       28
<PAGE>

          "Apollo  V  Purchasers"  shall  have the  meaning  assigned  it in the
introductory paragraph.

          "Apollo  Purchasers"  shall  have  the  meaning  assigned  it  in  the
introductory paragraph of this Agreement.

          "Alternative  Transaction"  shall  have  the  meaning  assigned  it in
Section 7.1 hereof.

          "AOP  IV"  shall  have the  meaning  assigned  it in the  introductory
paragraph.

          "AOP  V"  shall  have  the  meaning  assigned  it in the  introductory
paragraph.

          "B Trustees"  shall mean  Raymond F. Beagle,  Jr. and Charles J. Egan,
Jr., as (1)  successor  trustees of the 1992  Durwood,  Inc.  Voting Trust dated
December 12, 1992,  as amended and  restated on August 12, 1997,  (2)  successor
trustees of the trust created under the revocable  Trust  Agreement dated August
14, 1989 of Stanley H. Durwood, as amended and restated on May 12, 1999, and (3)
surviving  trustees of the Foundation,  or any successor  trustees of any of the
trusts referred to in clauses (1), (2) or (3) above.

          "Board of Directors" shall mean the Board of Directors of the Company.

          "Board  Resolutions"  shall have the meaning assigned to it in Section
5.1(i) hereof.

          "Bylaw  Amendments"  shall  mean the  amendments  to the  Bylaws to be
adopted by the Board of  Directors  at  Closing,  substantially  in the form set
forth in Annex 5.1(i)(2) hereto,  which amendment shall provide that the maximum
number of directors on the Board of Directors be increased by three and that the
three  additional  directors  shall be elected by holders of the Preferred Stock
pursuant to the  Certificate  of  Designations  (and in accordance  with Section
5.1(g) hereof).

          "Bylaws" shall have the meaning assigned it in Section 4.1(c) hereof.

          "Capital   Expenditures"  shall  mean,  for  any  fiscal  period,  all
expenditures  (including  outlays of cash and incurrence of  obligations) of the
Company and its  Subsidiaries in any such fiscal period which are required to be
included in property, plant and equipment or a similar fixed or long-lived asset
account on a  consolidated  balance sheet of the Company  prepared in accordance
with  GAAP  which  shall  include,   for  these  purposes,   Capitalized   Lease
Obligations.

          "Capitalized  Lease  Obligations"  means any obligation to pay rent or
other  amounts under a lease (or other  agreement  conveying a right to use) any
property (whether real, personal or mixed) that is required to be classified and
accounted for as a  capitalized  lease  obligation  (including  financing  lease
obligations) under generally accepted accounting principals.

                                       29
<PAGE>


          "Certificate   of   Designations"   shall  mean  the   certificate  of
designations described in Section 5.1(f) hereof.

          "Certificate of  Incorporation"  shall have the meaning assigned it in
Section 4.1(c) hereof.

          "Change of Control" shall have the meaning assigned it in Section 4.26
hereof.

          "Class B Stock"  shall have the  meaning  assigned  it in Section  4.1
hereof.

          "Closing" shall have the meaning assigned it in Section 2 hereof.

          "Closing Date" shall have the meaning assigned it in Section 2 hereof.

          "Code"  shall mean the  Internal  Revenue  Code of 1986,  as  amended.
References to "Code" made herein shall include, where applicable,  references to
the Treasury Regulations promulgated thereunder.

          "Common  Stock" shall have the meaning  assigned it in Section  4.1(a)
hereof.

          "Company"  shall  have the  meaning  assigned  it in the  introductory
paragraph.

          "Company  10-K"  shall have the  meaning  assigned  it in Section  4.8
hereof.

          "Company  10-Q"  shall have the  meaning  assigned  it in Section  4.8
hereof.

          "Company  Balance Sheet" shall have the meaning assigned it in Section
4.8 hereof.

          "Company  Balance  Sheet Date"  shall have the meaning  assigned it in
Section 4.8 hereof.

          "Company SEC Documents" shall have the meaning assigned in Section 4.7
hereof.

          "Conversion  Shares" shall mean the shares of Common Stock issued upon
conversion of any shares of Series A Preferred Stock (including shares of Series
A Preferred  Stock  issued upon  conversion  of any shares of Series B Preferred
Stock).

          "Disposition"  shall  mean  a  sale,  assignment,   transfer,  pledge,
hypothecation,  grant of any option with respect to or otherwise  dispose of any
interest in (or enter into an  agreement  or  understanding  with respect to the
foregoing) of any shares of Series A Preferred Stock.

          "Disposition  Notice"  shall have the  meaning  assigned it in Section
9.5(b) hereof.

                                       30
<PAGE>

          "Employee Benefit Plans" shall have the meaning assigned it in Section
4.21(c) hereof.

          "Encumbrances" shall have the meaning assigned it in Section 4.2(a).

          "Environmental  Laws"  shall  mean  any  and all  applicable  foreign,
federal, state, local or municipal laws, rules, orders,  regulations,  statutes,
ordinances,  codes,  decrees,  requirements of any Governmental  Entity or other
Requirement of Law (including  common law)  regulating,  relating to or imposing
liability or standards of conduct  concerning  protection of human health or the
environment,  as are now or may at any time be in effect during the term of this
Agreement.

          "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
          1974, as amended.  "Exchange Act" shall mean the  Securities  Exchange
          Act of 1934, as amended.  "Executive  Officer"  shall have the meaning
          assigned it in Section 4.21(a).

          "Existing  High  Yield  Indebtedness"  means  the  currently  existing
indebtedness  of the Company  pursuant to (i) the Indenture dated March 19, 1997
by and between the Company and Bank of New York,  as Trustee,  in respect of AMC
Entertainment   Inc.'s  9  1/2%  Senior  Subordinated  Notes  due  2009  and  as
supplemented by the First Supplemental Indenture dated June 9, 1997 and (ii) the
Indenture  dated  January  27,  1999 by and  between the Company and Bank of New
York,  as  Trustee,  in  respect  of AMC  Entertainment  Inc.'s  9  1/2%  Senior
Subordinated Notes due 2011.

          "Foundation" shall mean The Stanley H. Durwood Foundation.

          "GAAP" shall mean generally accepted  accounting  principles in effect
in the United States of America applied on a consistent basis.

          "Governmental  Entity"  shall  mean  any  national,   federal,  state,
municipal,  local,  territorial,  foreign or other government or any department,
commission,  board,  bureau,  agency,  regulatory  authority or  instrumentality
thereof;  or any court,  judicial,  administrative or arbitral body or public or
private tribunal  exercising  executive,  legislative,  judicial,  regulatory or
administrative functions pertaining to government.

          "Hazardous Substances" shall mean any waste or other substance that is
listed,  defined,  designated,  or classified as, or otherwise determined to be,
hazardous,  toxic,  or a  pollutant  or a  contaminant  under or pursuant to any
Environmental Law.

          "HSR Act" shall mean the Hart-Scott-Rodino  Antitrust Improvements Act
of 1976, as amended.

          "HSR  Conversion"  shall have the meaning  assigned thereto in Section
12.13.

                                       31
<PAGE>

          "Independent  Director"  shall mean a member of the Board of Directors
(i) who is not and has never been an officer or employee of the Company,  Apollo
or the Apollo Purchasers or any of their respective Affiliates,  or of an entity
that derived more than 5% of its revenues or earnings in its most recent  fiscal
year from transactions involving the Company, Apollo or any of Apollo Purchasers
or  any of  their  respective  Affiliates,  (ii)  who  has  no  relationship  or
affiliation  or  compensation,  consulting or contracting  arrangement  with the
Company, the B Trustees, the Foundation,  Apollo or the Apollo Purchasers or any
other entity such that a reasonable  person could regard such director as likely
to be unduly influenced by the Company, the B Trustees,  the Foundation,  Apollo
or any of  Apollo  Purchasers  and  (iii)  who is  nominated  by the  Nominating
Committee  in  accordance  with  the  procedures  set  forth  thereby,  it being
understood  that  the  Company's   existing  directors  elected  by  the  common
stockholders  will be deemed  independent for purposes of this provision through
at least the remainder of their current terms.

          "Initial  Issuance  Date" shall mean the first date of issuance of the
Preferred Stock pursuant to the closing of this Agreement.

          "Initial  Solicitation"  shall have the meaning assigned it in Section
6.9 hereof.

          "Material  Adverse  Effect" shall mean a material  adverse  change (or
effect)  in  the  condition  (financial  or  otherwise),   assets,   properties,
operations, business or results of operations (but not prospects) of the Company
and its  Subsidiaries,  taken as a whole  (excluding  the  effect of any  events
affecting the domestic theatrical exhibition industry as a whole); provided that
a decline in the  Company's  stock price in and of itself shall not be deemed to
be a Material Adverse Effect.

          "Material Contract" shall mean any contract,  commitment,  undertaking
or agreement to which the Company or any  Subsidiary  is a party or by which any
of them  are  bound  as of the  date  of this  Agreement  (i)  involving  annual
expenditures  or liabilities in excess of $10.0 million in any fiscal year; (ii)
providing for the lending of money (whether as borrower, lender or guarantor) in
excess  of $10.0  million;  (iii)  creating  or  governing  a joint  venture  or
partnership material to the Company and its Subsidiaries,  taken as a whole; and
(iv) that would otherwise constitute a "material contract" within the meaning of
Item 601(b)(10) of Regulation S-K promulgated by the SEC.

          "Nominating  Committee"  shall mean the committee  established  by the
Board of  Directors  pursuant to the  Company's  Bylaws as of the Closing  Date,
which committee shall be charged with the task of nominating for election by the
holders of the Common Stock  qualified  candidates  to serve as directors on the
Board of Directors.

          "Other  Investor  Affiliates"  shall have the  meaning  assigned it in
Section 4.1 of the Standstill Agreement.

          "Permitted  Acquisition"  shall mean any acquisition by the Company or
any  Subsidiary  of (i)  any  business  or  assets  with  a  purchase  price  of
$25,000,000 or less (including all assumed debt, all cash payments, and the fair
market value of all securities or other  property  issued as  consideration)  or
(ii) any  business or assets for which the consent or approval of the  Purchaser
has been given.

                                       32
<PAGE>

          "Permitted  Debt  Repayments"  shall mean scheduled or ordinary course
repayments of indebtedness of the Company or any Subsidiary,  including  without
limitation   ordinary  course   payments  with  respect  to  Capitalized   Lease
Obligations.

          "Permitted Encumbrances" shall mean (i) Encumbrances upon any property
presently  owned or hereafter  acquired,  created at the time of  acquisition to
secure a portion of the purchase price thereof,  or existing thereon at the date
of acquisition and assumed by the Company or one of its  Subsidiaries,  provided
that such  Encumbrance  shall apply only to the  property so acquired  and fixed
improvements  thereon;  (ii) any pledge of current assets in the ordinary course
of business made to secure current liabilities; (iii) Encumbrances for Taxes not
yet  delinquent;  (iv)  Encumbrances  on the  property  of the  Company  and its
Subsidiaries in the ordinary  course of business which do not materially  affect
the value of the property of the Company and do not  materially  interfere  with
the use made and proposed to be made of such property;  (v) landlords'  liens on
fixtures  and movable  property  located on premises  leased by the Company or a
Subsidiary  in the  ordinary  course  of  business;  (vi)  zoning  and  planning
restrictions, easements, permits and other restrictions or limitations of public
record  affecting the use of such properties;  provided that such  restrictions,
easements,  permits  or  other  restrictions  do not  impair  the  use  of  such
properties as exhibition  theaters or for such other purposes as such properties
are currently being used; (vii)  imperfections of title, if any, not material in
nature or amount and not materially  detracting  from the value or impairing the
use of the property  subject  thereto or impairing  the  operations  or proposed
operations of the Company and its Subsidiaries,  including,  without limitation,
the ability of the Company and its  Subsidiaries to secure  financing using such
properties and assets as collateral;  and (viii) other  Encumbrances  that would
not be reasonably expected to have a Material Adverse Effect.

          "Permitted Indebtedness" shall mean (i) indebtedness of the Company or
any of its Subsidiaries  owing one to the other; (ii) any indebtedness  incurred
to renew,  extend,  refinance or refund (each, a "refinancing") any indebtedness
outstanding  on the  Initial  Issuance  Date  (or  with  respect  to the  Senior
Facility,  an  aggregate  principal  amount at any one time  outstanding  not to
exceed  $425.0  million) in an  aggregate  principal  amount not  exceeding  the
principal  amount of the  indebtedness  so  refinanced  (plus the  amount of any
premium required to be paid in connection with such refinancing  pursuant to the
terms of the indebtedness so refinanced or the amount of any premium  reasonably
determined by the Company as necessary to accomplish such refinancing,  plus the
expenses of the Company  incurred in connection  with such  refinancing);  (iii)
indebtedness related to interest rate protection or currency hedging obligations
entered into solely to protect the Company or its Subsidiaries from fluctuations
in interest or currency exchange rates; (iv) Capitalized Lease Obligations;  (v)
indebtedness  of the  Company  or any of its  Subsidiaries  in  connection  with
standby letters of credit or performance  bonds issued in the ordinary course of
business;  (vi)  indebtedness of any Subsidiary  incurred in connection with the
guaranty of indebtedness of the Company or any other  Subsidiary of the Company;
(vii) indebtedness represented by property,  liability and workers' compensation
insurance; and (viii) other indebtedness in an aggregate principal amount at any
time outstanding not in excess of $30 million.

                                       33
<PAGE>

          "Person"  shall include all natural  persons,  corporations,  business
trusts, associations, companies, partnerships, joint ventures and other entities
and governments and agencies and political subdivisions.

          "Preferred  Stock"  shall  mean the Series A  Preferred  Stock and the
Series B Preferred Stock.

          "Preferred  Stock Approval  Rights" shall have the meaning assigned it
in Section 8.1 hereof.

          "Purchase  Price"  shall  have the  meaning  assigned  it in Section 1
hereof.

          "Purchaser"  shall have the meaning  assigned  it in the  introductory
paragraph of this Agreement.

          "Real  Property  Lease  Recap  Book"  shall  mean the  compilation  of
summaries and abstracts of the key terms of the Company's  Real Property  Leases
prepared by the Company.

          "Real Property  Leases" shall have the meaning  assigned it in Section
4.6(c) hereof.

          "Redeemable  Capital Stock" shall mean any capital stock that,  either
by its  terms,  by the terms of any  security  into which it is  convertible  or
exchangeable  or  otherwise,  is or upon the happening of an event or passage of
time would be required to be redeemed in cash prior to the tenth  anniversary of
the Initial  Issuance Date or is redeemable at the option of the holder  thereof
in cash at any time prior to such date, or is convertible  into or  exchangeable
for debt  securities  at any time prior to such date at the option of the holder
thereof (other than redemptions payable in the capital stock of the Company).

          "Registration  Rights  Agreement" shall mean the  registration  rights
agreement,  substantially  in the form attached  hereto as Annex  5.1(h),  to be
entered  into on or prior to the Closing Date by and between the Company and the
Purchasers.

          "Representatives" shall have the meaning assigned it in Section 6.3(a)
hereof.

          "Requirement of Law" shall mean, as to any Person,  the Certificate of
Incorporation and Bylaws or other  organizational or governing documents of such
Person,  and  each  law,  treaty,  rule or  regulation  or  determination  of an
arbitrator or a court or other  Governmental  Entity, in each case applicable to
or binding  upon such  Person or any of its  property or to which such Person or
any of its property is subject.

          "SEC" shall mean the Securities and Exchange Commission.

          "Securities  Act" shall mean the  Securities  Act of 1933, as amended.

          "Senior  Facility"  shall  mean The U.S.  $  425,000,000  Amended  and
Restated Credit  Agreement,  dated as of April 10, 1997, among AMC Entertainment
Inc, as the Borrower;  and The Bank of Nova Scotia, as Administrative Agent; and
Bank of America National Trust and Savings Association,  as Documentation Agent;
and  Various  Financial  Institutions  as  Lenders,  as  amended  by the  Second
Amendment,  dated as of  January  16,  1998,  as  further  amended  by the Third
Amendment,  dated as of March 15,  1999 and as  further  amended  by the  Fourth
Amendment, dated as of March 29, 2000.

                                       34
<PAGE>

          "Senior  Indebtedness"  shall  mean  the  Company's  current  existing
indebtedness pursuant to the Senior Facility.

          "Senior Lenders" shall mean the lenders of the Company pursuant to the
Company's Senior Facility.

          "Series  A  Preferred  Stock"  shall  mean the  Series  A  Convertible
Preferred Stock of the Company, par value $0.66 2/3 per share.

          "Series  B  Preferred  Stock"  shall  mean the  Series B  Exchangeable
Preferred Stock of the Company, par value $0.66 2/3 per share.

          "Shareholder  Approval"  shall mean  approval  by (i) the holders of a
majority of the Common Stock,  voting  separately as a class and (ii) a majority
of the votes cast by the  Company's  stockholders  voting  together  as a single
class, of an amendment to the Company's Certificate of Incorporation  increasing
the number of authorized shares of Common Stock (so as to permit the issuance of
additional  shares of Series A Preferred  Stock and the underlying  Common Stock
and until  there are  enough  shares  that  would  allow all  shares of Series A
Preferred  Stock to  convert  into  Common  Stock  and all  shares  of  Series B
Preferred  Stock to convert into Series A Preferred  Stock,  as  contemplated by
this Agreement and the Transaction Documents).

          "Standstill   Agreement"   shall   mean  the   standstill   agreement,
substantially in the form attached hereto as Annex 5.1(h), to be entered into on
or prior to the Closing Date by and between the Company and the Purchasers.

          "Subsidiary" shall mean any corporation, association or other business
entity (i) at least 50% of the outstanding voting securities of which are at the
time owned or controlled  directly or  indirectly  by the Company;  or (ii) with
respect to which the Company  possesses,  directly or  indirectly,  the power to
elect  more than 50% of the board of  directors  or  others  performing  similar
functions for such entity.

          "Taxes" shall mean any federal,  state, local or foreign income, gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall profits,  environmental (including taxes under Section 59A of
the Code),  customs  duties,  capital stock,  franchise,  profits,  withholding,
social security (or similar), unemployment,  disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.

          "Tax  Return"  means all  returns and  reports  (including  elections,
claims,  declarations,   disclosures,  schedules,  estimates,  computations  and
information  returns)  required  to  be  supplied  to a  tax  authority  in  any
jurisdiction relating to Taxes.

                                       35
<PAGE>

          "Transaction Documents" shall mean this Agreement,  the Certificate of
Designations, the Registration Rights Agreement and the Standstill Agreement.

          "Treasury  Regulation" means a regulation  promulgated under the Code,
as amended from time to time.

          "Wholly-Owned  Subsidiary" shall mean a Subsidiary of the Company, all
of the  capital  stock  (other  than  directors'  qualifying  shares)  or  other
ownership  or  economic  interests  of  which  shall at the time be owned by the
Company or by one or more  Wholly-Owned  Subsidiaries  of the  Company or by the
Company and one or more Wholly-Owned Subsidiaries of the Company.

          11.  Remedies.
               --------

          11.1 Remedies at Law or in Equity.  If any  representation or warranty
               ----------------------------
made by or on behalf of the Company,  on the one hand, or the Purchaser,  on the
other hand, in this Agreement or in any certificate,  report or other instrument
delivered  under or  pursuant  to any term  hereof or in any of the  Transaction
Documents shall be untrue or misleading  (including by omission) in any material
respect as of the date of this Agreement (and not subsequently cured by Closing)
or as of the Closing Date or as of the date it was made, furnished or delivered,
or any  covenant  (whether  under  Section 6 or not) made by either party hereto
shall be breached by such party,  a Purchaser,  on the one hand, or the Company,
on the other  hand,  may  proceed to protect  and  enforce its rights by suit in
equity  or action  at law,  whether  for the  specific  performance  of any term
contained in this Agreement,  or in any certificate,  report or other instrument
delivered under or pursuant to any of the terms hereof or any of the Transaction
Documents or for an injunction  against the breach of any such term or in aid of
the  exercise of any power  granted in this  Agreement,  or in any  certificate,
report  or other  instrument  delivered  under or  pursuant  to any of the terms
hereof or any of the  Transaction  Documents,  or to enforce  any other legal or
equitable  right of a Purchaser,  on the one hand, or the Company,  on the other
hand, or to take any one or more of such actions.

          In the event a Purchaser  brings such an action against the Company or
the Company  brings  such an action  against the  Purchaser  arising  under this
Agreement, or under any certificate,  report or other instrument delivered under
or pursuant to any of the terms hereof or any of the Transaction Documents,  the
prevailing  party in such  dispute  shall be entitled to recover from the losing
party all fees,  costs and  expenses of enforcing  any right of such  prevailing
party  under  or  with  respect  to  this   Agreement  or  the   Certificate  of
Designations,  including,  without limitation, such reasonable fees and expenses
of attorneys and accountants.

          11.2 Cumulative  Remedies.  None of the  rights,  powers  or  remedies
               --------------------
conferred  upon a Purchaser  on the one hand,  or the Company on the other hand,
shall be  mutually  exclusive,  and each such  right,  power or remedy  shall be
cumulative  and in  addition  to every  other  right,  power or remedy,  whether
conferred  hereby or by the  Certificate  of  Designations  or now or  hereafter
available at law, in equity, by statute or otherwise.

          11.3 No  Implied  Waiver.   Except  as  expressly   provided  in  this
               -------------------
Agreement, no course of dealing between the Company and a Purchaser and no delay
in  exercising  any such  right,  power or  remedy  conferred  hereby  or by the
Certificate of Designations or now or hereafter existing at law or in equity, by
statute or otherwise,  shall operate as a waiver of, or otherwise prejudice, any
such right, power or remedy.

                                       36
<PAGE>

          12.  Miscellaneous.
               -------------

          12.1 Waivers and Amendments.  Upon the approval of the Company and the
               ----------------------
written consent of the Apollo  Purchasers (a) the obligations of the Company and
the rights of a Purchaser  under this Agreement may be waived (either  generally
or in a particular  instance,  either  retroactively or prospectively and either
for a specified period of time or  indefinitely),  and (b) the Company may enter
into a  supplementary  agreement for the purpose of adding any  provisions to or
changing in any manner or eliminating  any of the provisions of this  Agreement,
or of any  supplemental  agreement  or  modifying  in any  manner the rights and
obligations hereunder or thereunder of a Purchaser and the Company.

          The  foregoing   notwithstanding,   no  such  waiver  or  supplemental
agreement shall affect any of the rights of any holder of a Security  created by
the  Certificate of  Designations  or by the Delaware  General  Corporation  Law
without  compliance  with  all  applicable  provisions  of  the  Certificate  of
Designations and the Delaware General Corporation Law.

          Upon the  effectuation of each such waiver or supplemental  agreement,
the Company shall  promptly give written  notice  thereof to the  Purchasers who
have not previously consented thereto in writing.

          Neither  this  Agreement,  nor any  provision  hereof may be  changed,
waived,  discharged or terminated orally or by course of dealing,  but only by a
statement  in  writing  signed by the party  against  which  enforcement  of the
change,  waiver,  discharge  or  termination  is  sought,  except to the  extent
provided in this Section 12.1.

          12.2 Notices. All notices, requests, consents and other communications
               -------
required or permitted  hereunder shall be in writing and shall be hand delivered
or mailed postage prepaid by registered or certified mail,

                           (a)     If to the Apollo Purchasers:

                                   c/o Apollo Management IV, L.P.
                                   and Apollo Management V, L.P.
                                   1301 Avenue of the Americas
                                    38th Floor
                                   New York, NY 10019
                                   Attention:   Marc Rowan
                                   Fax: (212) 515-3262

                                   with a copy to:

                                   Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                                   1333 New Hampshire Ave., N.W.
                                   Washington, D.C.  20036
                                   Attention:   Bruce S. Mendelsohn
                                   Fax: (202) 887-4288

                                       37
<PAGE>

                       or (b) If to the Company:

                                   AMC Entertainment Inc.
                                   106 West 14th Street
                                   P.O. Box 419615
                                   Kansas City, MO
                                   Attention:   Peter Brown
                                    Fax: (816) 480-2517

                                    with a copy to:

                                    Lathrop & Gage L.C.
                                    2345 Grand Boulevard
                                    Suite 2800
                                    Kansas City, MO 64108
                                    Attention:  Raymond F. Beagle, Jr.
                                    Fax: (816) 292-2001

                                    and a copy to:

                    Skadden, Arps, Slate, Meagher & Flom LLP
                                    4 Times Square
                                    New York, NY 10036
                                    Attention: Eileen T. Nugent
                                    Fax: (212) 735-2000


or at such other address as the Company or the Purchaser each may specify by
written notice to the other, and each such notice, request, consent and other
communication shall for all purposes of the Agreement be treated as being
effective or having been given when delivered if delivered personally, or, if
sent by mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.

          12.3 Termination of Agreement.  This Agreement may be terminated prior
               ------------------------
to the Closing as follows:

               (a)  by mutual consent of the Purchaser and the Company;

               (b)  at the  election of the  Company,  if any one or more of the
conditions to its  obligations  has not been  fulfilled as of 120 days following
the date hereof;

               (c)  at the election of the Purchaser,  if any one or more of the
conditions to its  obligations  has not been  fulfilled as of 120 days following
the date hereof;

               (d)  at  the  election  of the  Company,  if  the  Purchaser  has
breached any material representation,  warranty, covenant or agreement contained
in this Agreement and such breach is incapable of cure or is not cured within 30
days of notice of such breach is received by the breaching party;

                                       38
<PAGE>

               (e)  at  the  election  of the  Purchaser,  if  the  Company  has
breached any material representation,  warranty, covenant or agreement contained
in this Agreement and such breach is incapable of cure or is not cured within 30
days of notice of such breach is received by the breaching party; or

               (f)  at the  election  of the  Company  pursuant  to the terms of
Section 7.1.

          If the Closing  shall  occur,  this  Agreement  shall remain in effect
until the date  upon  which no Series A  Preferred  Stock or Series B  Preferred
Stock shall remain outstanding.

          In the event that the  Company or the  Purchaser,  as the case may be,
elects to terminate this  Agreement,  it shall deliver an irrevocable  notice to
the other party to this  Agreement  declaring its election to so terminate  this
Agreement in accordance  with the  provisions of this Section 12.3,  and setting
forth therein the basis for such termination.

          12.4 Indemnification.  The  Company  shall  indemnify,  save  and hold
               ---------------
harmless  the  Purchaser,   its  directors,   officers,   employees,   partners,
representatives  and Agents from and against any and all liability,  loss, cost,
damage,  reasonable  attorneys' and accountants' fees and expenses,  court costs
and all other  out-of-pocket  expenses  incurred by the  Purchaser in connection
with or arising from the execution,  delivery and  performance by the Company of
this Agreement and each of the other Transaction  Documents and the transactions
contemplated  thereby,  except to the extent of any willful  misconduct or gross
negligence of Apollo or the indemnified  party. This  indemnification  provision
shall be in addition to the rights of the  Purchaser to bring an action  against
the  Company  for  breach  of any term of this  Agreement  and any of the  other
Transaction Documents.

          12.5 Survival   of    Representations    and   Warranties   etc.   All
               -----------------------------------------------------------
representations  and warranties  made in, pursuant to or in connection with this
Agreement  shall survive until sixty (60) days  following the delivery to Apollo
of the final audited  consolidated  financial  statements of the Company for the
year ended March 30, 2001  (provided,  however,  that the provisions of Sections
4.2,  4.18,  4.19,  and 4.26 shall survive until the conversion or redemption of
all  of  the  outstanding  shares  of  Preferred  Stock),   notwithstanding  any
investigation  at any time made by or on behalf of the  Purchaser,  and the sale
and  purchase of the shares of  Preferred  Stock and payment  therefor;  and all
statements  contained in any certificate,  instrument or other writing delivered
by or on behalf of the  Company  pursuant  hereto  or in  connection  with or in
contemplation  of  the  transactions   herein   contemplated   shall  constitute
representations and warranties by the Company hereunder.

          If this  Agreement is  terminated  and the  transactions  contemplated
hereby are not consummated as described above,  this Agreement shall become void
and of no further  force and effect.  None of the parties  hereto shall have any
liability in respect of a termination  of this  Agreement,  except to the extent
that failure to satisfy the  conditions  set forth in Sections  5.1, 5.2 and 5.3
results  from the  intentional  or  willful  violation  of the  representations,
warranties, covenants or agreements of such party under this Agreement.

                                       39
<PAGE>

          12.6 Severability.  Should any one or more of the  provisions  of this
               ------------
Agreement  or of any  agreement  entered  into  pursuant  to this  Agreement  be
determined  to be  illegal  or  unenforceable,  all  other  provisions  of  this
Agreement and of each other  agreement  entered into pursuant to this  Agreement
shall be given effect separately from the provision or provisions  determined to
be illegal or unenforceable and shall not be affected thereby.

          12.7 Parties  in  Interest.  All  the  terms  and  provisions  of this
               ---------------------
Agreement  shall be binding upon and inure to the benefit of and be  enforceable
by the respective  parties hereto,  the successors and assigns of the Purchasers
and the Company,  whether so expressed or not. This  Agreement  shall not run to
the benefit of or be enforceable by any other Person.

          12.8 Successors and Assigns.  Except as otherwise  expressly  provided
               ----------------------
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon,  the  successors,  assigns,  heirs,  executors and  administrators  of the
parties  hereto and shall  inure to the  benefit of and be  enforceable  by each
person  who  shall be a holder  of  shares of the  Preferred  Stock  and/or  the
Conversion Shares.

          12.9 Assignment and  Transfers.  This Agreement can be assigned by the
               -------------------------
Apollo  Purchasers  to any  Affiliate  of Apollo  over  which  Apollo  exercises
investment  authority,  including with respect to voting and dispositive rights;
provided,  any such assignee  assumes the obligations of the assignor  hereunder
and agrees in writing to be bound by the terms of the  Transaction  Documents in
the same  manner  as the  assignor.  In  addition,  without  limiting  any other
provisions  of this  Agreement,  the shares of  Preferred  Stock or Common Stock
issued pursuant to this Agreement shall be freely  transferable to any Affiliate
of Apollo, subject to the terms of the Standstill Agreement.

          12.10Headings.  The headings of the Sections  and  paragraphs  of this
               --------
Agreement  have been  inserted  for  convenience  of  reference  only and do not
constitute a part of this Agreement.

          12.10Governing  Law;  Jurisdiction;  Venue;  Process.  THIS  AGREEMENT
               -----------------------------------------------
               SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
               THE  STATE OF NEW YORK  WITHOUT  REGARD  TO ANY  CHOICE OF LAW OR
               CONFLICT  OF  LAW   PROVISION   OR  RULE  THAT  WOULD  CAUSE  THE
               APPLICATION OF THE LAWS OF ANY JURISDICTION  OTHER THAN THE STATE
               OF NEW YORK. Any legal or equitable action or proceeding  arising
               out  of  or  in  connection   with  this   Agreement  or  in  any
               certificate,  report  or  other  instrument  delivered  under  or
               pursuant to any term hereof or any of the  Transaction  Documents
               shall be brought  in the courts of the State of New York,  in the
               county  and city of New  York or of the  United  States  District
               Court for the Southern District of New York, and by execution and
               delivery of this Agreement, the parties hereby irrevocably accept
               for  themselves and in respect of their  property,  generally and
               unconditionally,  the  exclusive  jurisdiction  of the  aforesaid
               courts.  The parties hereby irrevocably waive any objection which
               they may now or hereafter have to laying of jurisdiction or venue
               of any actions or  proceedings  arising  out of or in  connection
               with  this  Agreement  or in any  certificate,  report  or  other
               instrument  delivered under or pursuant to any term hereof or any

                                       40
<PAGE>

               of the  Transaction  Documents  brought in the courts referred to
               above and hereby  further  irrevocably  waive and  agree,  not to
               plead  or  claim  in any such  court  that  any  such  action  or
               proceeding has been brought in an inconvenient forum. The parties
               further agree that thc mailing by certified or  registered  mail,
               return  receipt  requested,  of any process  required by any such
               court  shall  constitute  valid and  lawful  service  of  process
               against  them,  without  necessity for service by any other means
               provided by statute or rule of court.

          12.12 Fees and Expenses.
                -----------------


          (a)  The  Company   agrees,   subject  to  the   consummation  of  the
transactions  contemplated  hereby to pay, and hold the Purchasers harmless from
liability  for  the  payment  of,  all   reasonable   expenses,   including  all
out-of-pocket  expenses,  incurred  by the  Purchasers  in  connection  with the
preparation  and  negotiation  of  this  Agreement,  and the  other  Transaction
Documents,  the other  supporting  documents  referred  to in  Section 5 of this
Agreement,  and the  consummation of the  transactions  contemplated  hereby and
thereby. Notwithstanding the foregoing or anything else in this Agreement to the
contrary, the Company shall not be required to reimburse the Purchasers for more
than  $125,000  in filing  fees (plus  reasonable  legal  expenses  incurred  in
connection  with the  preparation  of one filing) for all filings  under the HSR
Act.

          (b)  Upon Closing, the Company agrees to pay Apollo or their designees
a fee equal to three and one half percent (3.50%) of the Purchase Price.

          12.13HSR  Act.  The  Company  and  each  Purchaser  required  to  file
               --------
notification  under the HSR Act with  respect to the  acquisition  by holders of
Series B Preferred Stock of a present right to vote in the election of directors
of the Company, whether pursuant to the terms of Section 9(a) of the Certificate
of  Designations  or prior to exchange of Series B Preferred  Stock for Series A
Preferred  Stock pursuant to Section 7 of the  Certificate of  Designations  (an
"HSR  Conversion"),  shall  file  notification  under the HSR Act within 30 days
after the Initial  Issuance  and the waiting  period  shall have expired or been
terminated prior to any HSR Conversion being  consummated,  notwithstanding  any
provision of this Agreement or the Certificate of Designations to the contrary.

          12.14Counterparts.  This  Agreement  may be  executed in any number of
               ------------
counterparts and by different parties hereto in separate counterparts,  with the
same  effect  as  if  all  parties  had  signed  the  same  document.  All  such
counterparts shall be deemed an original,  shall be construed together and shall
constitute one and the same instrument.

          12.15Entire  Agreement.  This  Agreement  and  the  other  Transaction
               -----------------
Documents  contain the entire agreement among the parties hereto with respect to
the subject matter hereof and such  Agreement  supersedes and replaces all other
prior  agreements,  written or oral among the parties hereto with respect to the
subject matter hereof.

                                       41
<PAGE>


          IN WITNESS  WHEREOF,  the parties  hereto have caused this  Investment
Agreement to be duly executed as of the day and year first above written.

         AMC ENTERTAINMENT INC.


         By:      /S/ PETER C. BROWN
                  -----------------------------------------------------
                  Name:    Peter C. Brown
                  Title:   Chairman of the Board,  President  and Chief
                           Executive Officer


                                       42
<PAGE>


         APOLLO INVESTMENT FUND IV, L.P.

         By:      APOLLO ADVISORS IV, L.P.
                  its general partner

         By:      Apollo Capital Management IV, Inc.
                  its general partner

         By:      /S/ MARC ROWAN
                  -----------------------------------------------------
                  Name:    Marc Rowan
                  Title:   Vice President

         APOLLO OVERSEAS PARTNERS IV, L.P.

         By:      APOLLO ADVISORS IV, L.P.
                  its managing general partner

         By:      Apollo Capital Management IV, Inc.
                  its general partner

         By:      /S/ MARC ROWAN
                  -----------------------------------------------------
                  Name:    Marc Rowan
                  Title:   Vice President

         APOLLO MANAGEMENT IV, L.P.
         in its capacity as investment manager to
         Apollo Investment Fund IV, L.P.

         By:      AIF IV Management, Inc.

         By:      /S/ MARC ROWAN
                  -----------------------------------------------------
                  Name:    Marc Rowan
                  Title:   Vice President

                                       43
<PAGE>





         APOLLO INVESTMENT FUND V, L.P.

         By:      APOLLO ADVISORS V, L.P.
                  its general partner

         By:      Apollo Capital Management V, Inc.
                  its general partner

         By:      /S/ MARC ROWAN
                  -----------------------------------------------------
                  Name:    Marc Rowan
                  Title:   Vice President

         APOLLO OVERSEAS PARTNERS V, L.P.

         By:      APOLLO ADVISORS V, L.P.
                  its managing general partner

         By:      Apollo Capital Management V, Inc.
                  its general partner

         By:      /S/ MARC ROWAN
                  -----------------------------------------------------
                  Name:    Marc Rowan
                  Title:   Vice President

         APOLLO MANAGEMENT V, L.P.
         in its capacity as investment manager to
         Apollo Investment Fund V, L.P.

         By:      AIF V Management, Inc.

         By:      /S/ MARC ROWAN
                  -----------------------------------------------------
                  Name:    Marc Rowan
                  Title:   Vice President


                                       44

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>3
<FILENAME>d25605_ex99-3.txt
<DESCRIPTION>EXHIBIT 99.3
<TEXT>


                           CERTIFICATE OF DESIGNATIONS
                                       OF
                      SERIES A CONVERTIBLE PREFERRED STOCK
                                       AND
                      SERIES B EXCHANGEABLE PREFERRED STOCK
                                       OF
                             AMC ENTERTAINMENT INC.

                       (Pursuant to Section 151(g) of the
                General Corporation Law of the State of Delaware)

          AMC  ENTERTAINMENT  INC.,  a Delaware  corporation  (hereinafter,  the
"Company"),  pursuant to Section 151 of the General Corporation Law of the State
 -------
of Delaware (the "GCL") does hereby make this  Certificate of  Designations  and
                  ---
does hereby state and certify that,  pursuant to the authority  expressly vested
in the Board of  Directors  of the  Company  (the "Board of  Directors")  by the
                                                   -------------------
Certificate  of  Incorporation,  and  pursuant to Section  141(c) of the GCL the
following resolutions have been duly adopted:

          RESOLVED,  that  pursuant  to  Article  Fourth of the  Certificate  of
Incorporation (which authorizes  10,000,000 shares of preferred stock, $0.66 2/3
par  value),  the  designations,   powers  and  preferences,  and  the  relative
participating,  optional  and  other  special  rights,  and the  qualifications,
limitations  and  restrictions  thereof,  of a series  of  Series A  Convertible
Preferred Stock and a series of Series B Exchangeable  Preferred Stock are fixed
as stated herein.

          RESOLVED,  that each share of the Series A Convertible Preferred Stock
and each share of Series B  Exchangeable  Preferred  Stock shall rank equally in
all respects and that each series shall be subject to the following provisions:

          Section 1.  Designation;  Rank.  The first series of  preferred  stock
                      ------------------
shall be designated  Series A Convertible  Preferred  Stock, par value $0.66 2/3
per share (the  "Series A  Preferred  Stock")  and shall  consist  of  2,000,000
                 --------------------------
shares.  The second  series of  preferred  stock  shall be  designated  Series B
Exchangeable  Preferred  Stock,  par value  $0.66 2/3 per share  (the  "Series B
                                                                        --------
Preferred Stock" and, together with the Series A Preferred Stock, the "Preferred
---------------                                                        ---------
Stock") and shall consist of 2,000,000  shares.  The Preferred  Stock will rank,
-----
with  respect to  dividend  rights and rights upon  liquidation,  winding up and
dissolution (a "Liquidation"):  (a) senior to all classes of common stock of the
                -----------
Company (including,  without limitation, the Common Stock and the Class B Stock)
and each other class of capital  stock or series of  preferred  stock  hereafter
established  after the offering of the Preferred Stock by the Board of Directors
that does not  expressly  provide  that it ranks senior to or on parity with the
Preferred  Stock as to dividend  rights and rights on Liquidation  (collectively
referred  to with the Common  Stock of the  Company as "Junior  Stock");  (b) on
                                                        -------------
parity  with any class of capital  stock of the  Company or series of  preferred
stock of the Company hereafter established, the terms of which expressly provide
that such class or series  will rank on parity  with the  Preferred  Stock as to
dividends and other  distributions,  including  distributions upon a Liquidation
("Parity Stock"); and (c) junior to any class of capital stock of the Company or
  ------------
any series of preferred stock of the Company hereafter established, the terms of
which  expressly  provide  that  such  class or series  will rank  senior to the
Preferred Stock as to dividends and other distributions, including distributions
upon a Liquidation ("Senior Stock").
<PAGE>

          Section 2.          Dividends.
                              ---------

                  (a)         Series A Preferred Stock.
                              ------------------------

                              (1) The holders of the then outstanding  shares of
Series A Preferred  Stock  (including  any  Additional  Series A Securities  (as
hereinafter  defined)) will be entitled to receive,  when, as and if declared by
the Board of Directors out of funds of the Company legally  available  therefor,
cumulative dividends,  from the Original Issuance Date through and including the
date on which such dividends are paid at the annual rate of 6.75% (the "Series A
                                                                        --------
Applicable  Rate")  of the  Series  A  Liquidation  Preference  (as  hereinafter
----------------
defined)  per share of the Series A Preferred  Stock,  payable in arrears on the
last day of each of June,  September,  December and March (the "Dividend Payment
                                                                ----------------
Date"),  commencing on June 30, 2001;  provided  that:  (i) if any such Dividend
----
Payment  Date is not a Business Day then such  dividend  shall be payable on the
next  Business  Day, and (ii)  accumulated  and unpaid  dividends  for any prior
quarterly  period  may be paid at any time.  Such  dividends  shall be deemed to
accrue on the Series A Preferred  Stock from the Original  Issuance  Date and be
cumulative  whether  or not  earned or  declared  and  whether  or not there are
profits, surplus or other funds of the Company legally available for the payment
of  dividends.  The term  "Business  Day" means any day other  than a  Saturday,
                           -------------
Sunday  or day on which  banking  institutions  in New York  are  authorized  or
required to remain closed. The term "Original Issuance Date" means, with respect
                                     ----------------------
to the Preferred  Stock,  the Initial  Issuance  Date,  and, with respect to the
Additional  Securities (as  hereinafter  defined),  the date upon which they are
issued or, if not issued,  the  applicable  dividend  payment  date on which the
Additional Securities were to have been issued.

                              (2)  During  the  PIK  Period,  dividends  on such
Series A Preferred Stock shall be paid through the issuance of additional shares
of Series A Preferred Stock to holders of Series A Preferred Stock  ("Additional
                                                                      ----------
Series A  Securities").  The number of Additional  Series A Securities  that are
--------------------
issued to the holders of the Series A Preferred Stock under  paragraphs  2(a)(2)
and 2(a)(3) hereof on any Dividend  Payment Date will be the number  obtained by
dividing (i) the total dollar amount of cumulative  dividends due and payable on
--------
the applicable Dividend Payment Date by (ii) the Series A Liquidation Preference
(which, for the purposes of this calculation,  shall not include any accrued and
unpaid  dividends),  provided,  that the Company  shall not be required to issue
fractional  shares of Series A Preferred Stock, but in lieu thereof may elect to
pay in cash the portion of any dividend  payable in shares of Series A Preferred
Stock that would otherwise require the issuance of a fractional share.

                              (3) After  the PIK  Period  and until the  seventh
anniversary of the Initial  Issuance  Date,  dividends on the Series A Preferred
Stock  shall be payable in cash or in  Additional  Series A  Securities,  at the
Company's  option.  After the seventh  anniversary of the Initial Issuance Date,
dividends on the Series A Preferred Stock shall be payable in cash,  unless such
cash payment is  prohibited  by the terms of the  indentures  for the  Company's
Existing High Yield Indebtedness,  in which case such dividends shall be payable
in Additional Series A Securities.

                                       2
<PAGE>

                              (4) If at any time when the  Company  is unable to
pay cash dividends on the Series A Preferred  Stock (whether by the terms of the
Series A Preferred Stock, by the terms of the Company's  indebtedness or by law)
and the accrual,  declaration or payment of Additional Series A Securities would
either (i) result in a "change of control" (as defined  pursuant to the terms of
the indentures governing the Company's Existing High Yield Indebtedness) or (ii)
require the Company to reserve for issuance underlying shares of Common Stock in
excess of the number of  authorized  shares  available  for  issuance  under the
Company's Certificate of Incorporation,  then the Additional Series A Securities
shall instead be accrued, declared or paid in Additional Series B Securities (as
hereinafter  defined). If for any reason, the holders of Preferred Stock receive
Additional Series B Securities  pursuant to this paragraph 2(a)(4),  as soon as,
and to the extent  that,  additional  shares of Series A Preferred  Stock can be
issued at any time in the future without  resulting in a "change of control" (as
defined pursuant to the terms of indenture  governing the terms of the Company's
Existing High Yield  Indebtedness),  the Additional  Series B Securities  issued
pursuant to this paragraph 2(a)(4) (including any Additional Series B Securities
issued as a dividend thereon) shall be automatically  and immediately  exchanged
for an equal number of shares of Series A Preferred  Stock. The number of shares
of Additional Series B Securities that are issued to the holders of the Series A
Preferred  Stock  pursuant  to this  paragraph  shall  equal the  amount of such
dividend as calculated  pursuant to paragraph 2(a)(2) or 2(a)(3), as applicable,
divided by the Series B  Liquidation  Preference  (which,  for  purposes of this
----------
calculation, shall not include any accrued and unpaid dividends).

                              (5) Upon the  occurrence of a Change of Control on
or before the fifth  anniversary of the Initial  Issuance Date (or, in the event
of such a Change of Control  which has been  approved by the Board of Directors,
on the Business Day immediately preceding the date of consummation of the Change
of Control),  the holders of Series A Preferred  Stock shall  receive a one-time
dividend of  Additional  Series A Securities on each share of Series A Preferred
Stock. The amount of such dividend of Additional Series A Securities pursuant to
this  paragraph  2(a)(5) shall equal (x) the total value of the  dividends  that
would have been  payable on such share of Series A Preferred  Stock  between the
Initial Issuance Date and the fifth anniversary  thereof (assuming  compounding)
less (y) the sum of (I) the  Additional  Series A  Securities  paid  pursuant to
paragraphs 2(a)(2) and 2(a)(3) on such share of Series A Preferred Stock through
such date and (II) any cash  dividends  paid on such  Series A  Preferred  Stock
through such date (the "Series A No-Call Period Dividend"). The number of shares
                        --------------------------------
of  Additional  Series A  Securities  constituting  the Series A No-Call  Period
Dividend  shall equal the amount of such dividend as calculated  pursuant to the
previous sentence divided by the Series A Liquidation Preference (which, for the
                  ------- --
purposes  of  this  calculation,  shall  not  include  any  accrued  and  unpaid
dividends).  To the  extent  that  shares of  Series A  Preferred  Stock  remain
outstanding  subsequent to a Change of Control,  no dividends will be paid under
paragraphs  2(a)(2) or 2(a)(3) during the period  commencing on the closing date
of the transaction  giving rise to the Change of Control and ending on the fifth
anniversary  of the  Initial  Issuance  Date,  if the  Series A  No-Call  Period
Dividend has been paid under this paragraph  2(a)(5) with respect to such shares
of Series A Preferred Stock.

                                       3
<PAGE>

                  (b)         Series B Preferred Stock.
                              ------------------------

                              (1) The holders of the then outstanding  shares of
Series B Preferred  Stock  (including  any  Additional  Series B Securities  (as
hereinafter  defined)) will be entitled to receive,  when, as and if declared by
the Board of Directors out of funds of the Company legally  available  therefor,
cumulative dividends,  from the Original Issuance Date through and including the
date on which such  dividends are paid at the annual rate of 12.00%,  subject to
retroactive  adjustment  as set forth below (the "Series B Applicable  Rate" and
                                                  -------------------------
together with the Series A Applicable Rate, the "Applicable Rate") of the Series
                                                 ---------------
B Liquidation  Preference per share of the Series B Preferred Stock,  payable in
arrears on the Dividend  Payment  Date,  commencing  on June 30, 2001;  provided
that:  (i) if any such  Dividend  Payment  Date is not a Business  Day then such
dividend  shall be payable on the next  Business Day, and (ii)  accumulated  and
unpaid  dividends for any prior  quarterly  period may be paid at any time. Such
dividends  shall be deemed to accrue on the  Series B  Preferred  Stock from the
Original  Issuance Date and be cumulative  whether or not earned or declared and
whether or not there are profits,  surplus or other funds of the Company legally
available  for the  payment of  dividends.  If the Company  obtains  Shareholder
Approval as a result of the Initial Solicitation and all of the then outstanding
shares of Series B Preferred Stock are exchangeable  immediately  following such
Shareholder  Approval (or would otherwise be eligible for exchange into Series A
Preferred  Stock  except for the failure to obtain HSR  Approval,  to the extent
such HSR Approval is required) for Series A Preferred  Stock pursuant to section
7 hereof (the "Initial Solicitation Conversion"),  the Series B Applicable Rate,
               -------------------------------
as to the then  outstanding  shares of Series B Preferred Stock only (or, in the
case of the failure to obtain HSR  Approval,  to the extent such HSR Approval is
required,  as to the then outstanding  shares of Series B Preferred Stock at the
time  Shareholder  Approval is  obtained,  plus any shares of Series B Preferred
Stock issued between the time Shareholder  Approval is obtained and the time HSR
Approval is obtained),  shall be reduced,  retroactively to the Initial Issuance
Date, from 12.00% to 6.75%. To the extent  necessary to effect such  retroactive
adjustment  of the Series B  Applicable  Rate,  the Company may cancel  (without
consideration  paid to the holder  thereof) any  Additional  Series B Securities
(including  dividends  paid thereon)  that have been issued  between the Initial
Issuance Date and the date of the Initial Solicitation Conversation.

                              (2)  During  the  PIK  Period,  dividends  on such
Series B Preferred Stock shall be paid through the issuance of additional shares
of Series B Preferred Stock to holders of Series B Preferred Stock  ("Additional
                                                                      ----------
Series B Securities" and together with the Additional  Series A Securities,  the
-------------------
"Additional Securities").  The number of Additional Series B Securities that are
 --------------------
issued to the holders of the Series B Preferred Stock under  paragraphs  2(b)(2)
and  2(b)(3)  hereof or to holders of Series A Preferred  Stock under  paragraph
2(a)(4)  hereof on any  Dividend  Payment  Date will be the number  obtained  by
dividing (i) the total dollar amount of cumulative  dividends due and payable on
--------
the applicable Dividend Payment Date by (ii) the Series B Liquidation Preference
(which,  for the  purposes of this  calculation,  shall not include  accrued and
unpaid  dividends),  provided,  that the Company  shall not be required to issue
fractional  shares of Series B Preferred Stock, but in lieu thereof may elect to
pay in cash the portion of any dividend  payable in shares of Series B Preferred
Stock that would otherwise require the issuance of a fractional share.

                                       4
<PAGE>
                              (3)  After  the PIK  Period  and  until  the fifth
anniversary of the Initial  Issuance  Date,  dividends on the Series B Preferred
Stock  shall be payable in cash or in  Additional  Series B  Securities,  at the
Company's  option.  After the fifth  anniversary  of the Initial  Issuance Date,
dividends on the Series B Preferred Stock shall be payable in cash,  unless such
payment is prohibited by the terms of the indentures for the Company's  Existing
High Yield  Indebtedness  in which case  dividends  shall be paid in  Additional
Series B Securities.

                              (4) Upon the  occurrence of a Change of Control on
or before the fifth  anniversary of the Initial  Issuance Date (or, in the event
of such a Change of Control  which has been  approved by the Board of Directors,
on the Business Day immediately preceding the date of consummation of the Change
of Control),  the holders of Series B Preferred  Stock shall  receive a one-time
dividend of  Additional  Series B Securities on each share of Series B Preferred
Stock. The amount of such dividend of Additional Series B Securities pursuant to
this  paragraph  2(b)(4) shall equal (x) the total value of the  dividends  that
would have been  payable on such share of Series B Preferred  Stock  between the
Initial Issuance Date and the fifth anniversary  thereof (assuming  compounding)
minus (y) the sum of (I) the  Additional  Series B Securities  paid  pursuant to
-----
paragraphs 2(b)(2) and 2(b)(3) on such share of Series B Preferred Stock through
such date and (II) any cash dividends paid pursuant to paragraph 2(b)(3) on such
share of Series B  Preferred  Stock  through  such  date (the  "Series B No-Call
                                                                ----------------
Period  Dividend").  The  number  of shares of  Additional  Series B  Securities
----------------
constituting the Series B No-Call Period Dividend shall equal the amount of such
dividend as calculated pursuant to the previous sentence divided by the Series B
                                                         ----------
Liquidation  Preference (which, for the purposes of this calculation,  shall not
include  accrued  and unpaid  dividends).  To the extent that shares of Series B
Preferred  Stock  remain  outstanding  subsequent  to a Change  of  Control,  no
dividends  will be paid under  paragraphs  2(b)(2) or 2(b)(3)  during the period
commencing on the closing date of the  transaction  giving rise to the Change of
Control and ending on the fifth anniversary of the Initial Issuance Date, if the
Series B No-Call Period Dividend has been paid under this paragraph 2(b)(4) with
respect to such shares of Series B Preferred Stock.

                              (5) Upon the occurrence of:

                                (A) the  Company  delivering  to the  holders of
          Preferred  Stock a notice  of  redemption  pursuant  to  section  4(b)
          hereof,  each  outstanding  share of Series B  Preferred  Stock  shall
          receive a one-time  dividend of Additional  Series B  Securities,  the
          number of shares of which  shall be equal to (i) the  quotient  of (x)
          the difference (if positive)  between the average of the closing price
          of the Company's  Common Stock on the American Stock Exchange or other
          principal  national  securities  exchange on which the Common Stock is
          listed or to which the  shares are  admitted  for  trading  for the 20
          trading days prior to  determination  and the Conversion Price divided
                                                                         -------
          by (y) the  Conversion  Price,  minus (ii) any  dividend  paid on such
          --                              -----
          share of Series B Preferred  Stock to date  pursuant to  subparagraphs
          2(b)(5)(C) or 2(b)(5)(D) hereof.

                                (B)  the  tenth   anniversary   of  the  Initial
          Issuance  Date,  each  outstanding  share of Series B Preferred  Stock
          shall receive a one-time  dividend of Additional  Series B Securities,
          the number of shares of which  shall be equal to the  quotient  of (i)
          the difference (if positive)  between the average of the closing price
          of the Company's  Common Stock on the American Stock Exchange or other
          principal  national  securities  exchange on which the Common Stock is
          listed or to which the  shares are  admitted  for  trading  for the 20
          trading days prior to  determination  and the Conversion Price divided
                                                                         -------
          by (ii) the Conversion Price.
          --

                                       5
<PAGE>

                                (C) a Change  of  Control  (or,  in the event of
          such a Change  of  Control  which  has been  approved  by the Board of
          Directors,  on the  Business  Day  immediately  preceding  the date of
          consummation  of the Change of  Control),  each  outstanding  share of
          Series  B  Preferred  Stock  shall  receive  a  one-time  dividend  of
          Additional Series B Securities, the number of shares of which shall be
          equal to (i) the quotient of (x) the difference (if positive)  between
          the value per share of the  consideration  received  by the holders of
          Common  Stock as a result of the Change of Control and the  Conversion
          Price  divided by (y) the  Conversion  Price,  minus (ii) any dividend
                 ----------
          paid on such share of Series B  Preferred  Stock to date  pursuant  to
          subparagraph 2(b)(5)(D) hereof.

                                (D)  at any  time  after  18  months  after  the
          Initial  Issuance  Date,  a sale of any  shares of Series A  Preferred
          Stock or the Conversion  Shares,  each  outstanding  share of Series B
          Preferred  Stock  shall  receive a  dividend  of  Additional  Series B
          Securities,  the amount of which  shall be equal to the product of (i)
          the  percentage  of the Series A  Preferred  Stock  and/or  Conversion
          Shares sold in such  transaction  (which  shall be the quotient of (x)
          the Underlying  Sold Shares plus the number of Conversion  Shares sold
          in such transaction  divided by (y) the Total Unconverted  Shares plus
                               ----------
          the number of Conversion Shares issued to date) multiplied by (ii) the
                                                          -------------
          quotient of (x) the  difference,  if positive,  between the  Effective
          Sale Price (in the case of a sale of Series A Preferred  Stock) or the
          sale price per share (in the case of a sale of Conversion  Shares) and
          the   Conversion   Price   divided  by  (y)  the   Conversion   Price.
                                     -----------
          Notwithstanding  the foregoing,  no dividend shall be payable pursuant
          to this subparagraph 2(b)(5)(D) unless (I) the transaction giving rise
          to the right to receive such dividend shall have been the initial sale
          of the Series A Preferred Stock or Conversion  Shares to a Person that
          is not an  Affiliate  of  Apollo,  an  Apollo  Purchaser  or any other
          Purchaser;  (II) the  holder of Series A  Preferred  Stock sold in the
          transaction  giving rise to the right to receive  such  dividend  also
          owned Series B Preferred  Stock at the time of such  transaction;  and
          (III) the  holder  of the  Series B  Preferred  Stock  receiving  such
          dividend  also  owned  Series  A  Preferred  Stock  at the time of the
          transaction  giving  rise  to the  right  to  receive  such  dividend.
          Notwithstanding  the  foregoing,  the Company shall not be required to
          deliver stock certificates  representing any dividend payable pursuant
          to this  subparagraph  2(b)(5)(D)  until  the  percentage  of Series A
          Preferred  Stock  (including the Conversion  Shares) sold, in a single
          transaction  or in any number of  transactions  over time,  aggregated
          together  for all  selling  holders  who  would  have  otherwise  been
          eligible for the dividend  provided in this  subparagraph  2(b)(5)(D),
          shall be at least equal to 10% of the total number of shares of Series
          A Preferred  Stock issued to date (for purposes of the  calculation in
          this sentence,  with respect to the Conversion  Shares,  the number of
          shares of Series A Preferred  Stock from which the  Conversion  Shares
          were converted shall be used (the "Threshold Amount")).  To the extent
                                             ----------------
          that such  dividends are not made solely because the sales of Series A
          Preferred  Stock  did not  meet  the  Threshold  Amount,  such  unpaid
          dividends shall accrue. Any Additional Series B Securities received as
          dividends on the Series B Preferred  Stock  pursuant to  subparagraphs
          2(b)(5)(A), 2(b)(5)(B) and 2(b)(5)(C) shall not be eligible to receive
          any of the dividends described in subparagraph  2(b)(5)(D) hereof. Any
          Additional  Series B Securities  received as dividends on the Series B
          Preferred Stock to this subparagraph  2(b)(5)(D) shall not be eligible
          to receive any of the dividends described in section 2(b)(5) hereof.

                                       6
<PAGE>

                  (c)         In the  event  that,  in any  fiscal  period,  the
Company  shall declare and pay, out of funds legally  available  therefor,  cash
dividends  (or  dividends  payable in  evidences of  indebtedness  issued by the
Company) on shares of the Common Stock,  holders of Series A Preferred Stock and
Series B Preferred Stock shall be entitled to receive,  in addition to dividends
received  pursuant to Sections 2(a) and 2(b) hereof, a cash dividend (or, if the
dividend  on  the  Common  Stock  was  paid  in the  form  of an  instrument  of
indebtedness,  a dividend paid in such instrument)  equal to the excess, if any,
of: (i) the amount of dividends  that such holder of Preferred  Stock would have
received had such share of Preferred Stock been converted into Common Stock (or,
in the case of Series B Preferred Stock, had such Series B Preferred Stock first
been  exchanged  for Series A  Preferred  Stock and then  converted  into Common
Stock) immediately  before payment of such dividend;  minus (ii) the face amount
of any dividend  payable in such fiscal period in Additional  Securities (or the
cash  amount of any cash  dividend  payable)  on such share of  Preferred  Stock
(pursuant to paragraphs 2(a)(2), 2(a)(3), 2(b)(2) or 2(b)(3) hereof).

                  (d)         Holders of shares of the Preferred  Stock shall be
entitled to full  cumulative  dividends,  as herein  provided,  on the Preferred
Stock and no additional  amounts.  Except as set forth in section 2(e) below, no
interest,  or sum of money in lieu of  interest,  shall be payable in respect of
any dividend payment or payments on the Preferred Stock that may be in arrears.

                  (e)         If dividends  are not paid in full, or declared in
full and sums set apart for the payment  thereof,  upon the shares of  Preferred
Stock and the shares of Parity  Stock,  all  dividends  declared  upon shares of
Preferred  Stock and upon all Parity Stock shall be paid or declared pro rata so
that in all cases the  amount of  dividends  paid or  declared  per share on the
Preferred  Stock and such  Parity  Stock shall bear to each other the same ratio
that unpaid accumulated  dividends per share,  including dividends accrued or in
arrears,  if any,  on the shares of  Preferred  Stock and such  other  shares of
Parity Stock, bear to each other. Unless and until full cumulative  dividends on
the shares of Preferred Stock in respect of all past quarterly  dividend periods
have been paid,  and the full  amount of  dividends  on the shares of  Preferred
Stock in respect of the then current  quarterly  dividend period shall have been
or are  contemporaneously  declared  in full and sums set aside for the  payment
thereof,  no shares of Junior Stock or Parity Stock shall be redeemed,  retired,
purchased or otherwise acquired for any consideration (or any payment made to or
available  for a sinking  fund for the  redemption  of any such  shares)  by the
Company or any Subsidiary of the Company  (except by conversion into or exchange
for shares of Junior Stock).  Unless and until full cumulative  dividends on the
shares of Preferred Stock in respect of all past quarterly dividend periods have
been  paid or are  contemporaneously  declared  in full and sums set  aside  for
payment thereof, no dividends shall be paid or declared or set aside for payment
or other  distribution  upon the  Junior  Stock,  other  than in  shares  of, or
warrants  or rights  to  acquire,  Junior  Stock.  For the  purposes  hereof,  a
"Subsidiary"  shall mean any  corporation,  association or other business entity
 ----------
(i) at least 50% of the outstanding  voting  securities of which are at the time
owned or  controlled  by the Company;  or (ii) with respect to which the Company
possesses, directly or indirectly, the power to direct or cause the direction of
the affairs or management of such person.

                                       7
<PAGE>

          The terms "accrued  dividends,"  "dividends accrued" and "dividends in
                     ------------------     -----------------       ------------
arrears," whenever used herein with reference to shares of Preferred Stock shall
-------
be deemed to mean an amount  which  shall be equal to  dividends  thereon at the
Applicable  Rate per share for the  respective  series from the date or dates on
which such dividends commence to accrue to the end of the then current quarterly
dividend period for such Preferred Stock (or, in the case of redemption,  to the
date of redemption), whether or not earned or declared and whether or not assets
for the Company are legally  available  therefor,  and if full dividends are not
declared  or paid  (whether  in cash or in  Additional  Securities),  then  such
dividends  shall  cumulate,   with  additional  dividends  thereon,   compounded
quarterly,  at the Applicable  Rate, for each quarterly period during which such
dividends remain unpaid, less the amount of all such dividends paid, or declared
in full and sums  set  aside  for the  payment  thereof,  upon  such  shares  of
Preferred Stock.

                  (f)         The amount of any dividends per share of Preferred
Stock  for any full  quarterly  period  shall be  computed  by  multiplying  the
Applicable Rate for such quarterly dividend period by the Liquidation Preference
per share and  dividing the result by four.  Dividends  payable on the shares of
Preferred Stock for any period less than a full quarterly  dividend period shall
be  computed  on the basis of a 360-day  year of twelve  30-day  months  and the
actual number of days elapsed for any period less than one month.

          Section 3.          Liquidation Preference.
                              ----------------------

                  (a)         Series A Preferred Stock.
                              ------------------------

                              (1)  In  the  event  of  a  Liquidation,   whether
voluntary  or  involuntary,  the  holders  of  Series  A  Preferred  Stock  then
outstanding  shall be  entitled to receive  out of the  available  assets of the
Company,  whether  such assets are stated  capital or surplus of any nature,  an
amount on such date equal to the greater of (i) $1000.00 (the "Issue Price") per
                                                               -----------
share  of  Series A  Preferred  Stock  plus all  accrued  and  unpaid  dividends
(including any dividends  payable in respect of the elapsed  portion of the then
current quarter in accordance with section 2(f)) per share of Series A Preferred
Stock as of such date,  calculated  pursuant to section  2(a)  hereinabove  (the
"Series A  Liquidation  Preference")  and (ii) such amount per share of Series A
 ---------------------------------
Preferred  Stock,  as would have been payable had each share been converted into
Common  Stock  immediately  prior  to  such  Liquidation  (with  respect  to the
calculations set forth above, the "Series A Liquidation Payment").  The Series A
                                   ----------------------------
Liquidation Payment shall be made before any payment shall be made or any assets
distributed  to the  holders of any class or series of the  Common  Stock or any
other  class or series  of the  Company's  capital  stock  ranking  junior as to
liquidation  rights to the Preferred Stock.  Following payment to the holders of
the  Series A  Preferred  Stock and  Series B  Preferred  Stock (as set forth in
section  3(b) below) of the full  preferential  amounts  described  in the first
sentence  of this  section  3, the  remaining  assets  (if  any) of the  Company
available for  distribution to stockholders of the Company shall be distributed,
subject to the rights of the holders of shares of any other  series of preferred
stock ranking senior to the Common Stock as to  distributions,  upon Liquidation
pro rata among the holders of the Common  Stock and any other  shares of capital
stock  of  the  Company  ranking  on a  parity  with  the  Common  Stock  as  to
distributions  upon  Liquidation.  If  upon  any  such  Liquidation  the  assets
available for payment of the Series A Liquidation  Payment are  insufficient  to
permit  the  payment  to  the  holders  of  the  Preferred  Stock  of  the  full
preferential  amounts  described  in this  paragraph,  then  all  the  remaining
available assets shall be distributed  among the holders of the then outstanding
Preferred Stock and any other then  outstanding  Parity Stock pro rata according
to the number of then  outstanding  shares of  Preferred  Stock and Parity Stock
held by each holder thereof.

                                       8
<PAGE>

                              (2) The Series A Liquidation  Preference  shall be
proportionately  adjusted in the event of any stock split,  reverse stock split,
stock  combination,  reclassification  or pursuant to any other  adjustment with
respect to the Series A Preferred Stock.

                  (b)         Series B Preferred Stock.
                              ------------------------

                              (1)  In  the  event  of  a  Liquidation,   whether
voluntary  or  involuntary,  the  holders  of  Series  B  Preferred  Stock  then
outstanding  shall be  entitled to receive  out of the  available  assets of the
Company,  whether  such assets are stated  capital or surplus of any nature,  an
amount on such date equal to the greater of (i) the Issue Price plus all accrued
and unpaid dividends  (including any dividends payable in respect of the elapsed
portion of the then current  quarter in accordance  with section 2(f)) per share
of Series B Preferred Stock as of such date, calculated pursuant to section 2(b)
hereinabove  (with  respect to the  calculation  set forth above,  the "Series B
                                                                        --------
Liquidation  Preference"  and together with the Series A Liquidation  Preference
-----------------------
the  "Liquidation  Preference")  and (ii)  such  amount  per  share of  Series B
      -----------------------
Preferred  Stock, as would have been payable had each share first been exchanged
for Series A Preferred Stock (assuming for this provision that all conditions to
conversion  had occurred) and then such shares of Series A Preferred  Stock were
converted  into Common  Stock  pursuant to section 6  immediately  prior to such
Liquidation  (the "Series B Liquidation  Payment" and together with the Series A
                   -----------------------------
Liquidation  Payment,  the  "Liquidation  Payment").  The  Series B  Liquidation
                             --------------------
Payment shall be made before any payment shall be made or any assets distributed
to the holders of any class or series of the Common  Stock or any other class or
series of the Company's capital stock ranking junior as to liquidation rights to
the Preferred Stock.  Following payment to the holders of the Series A Preferred
Stock (as set forth in section  3(a) above) and Series B Preferred  Stock of the
full  preferential  amounts  described in this section  3(b)(1),  the  remaining
assets (if any) of the Company available for distribution to stockholders of the
Company shall be distributed,  subject to the rights of the holders of shares of
any other series of  preferred  stock  ranking  senior to the Common Stock as to
distributions,  upon  Liquidation pro rata among the holders of the Common Stock
and any other  shares of capital  stock of the Company  ranking on a parity with
the  Common  Stock  as to  distributions  upon  Liquidation.  If upon  any  such
Liquidation  the assets  available  for payment of the  Liquidation  Payment are
insufficient  to permit the payment to the holders of the Preferred Stock of the
full preferential  amounts  described in this paragraph,  then all the remaining
available assets shall be distributed  among the holders of the then outstanding
Preferred Stock and any other then  outstanding  Parity Stock pro rata according
to the number of then  outstanding  shares of  Preferred  Stock and Parity Stock
held by each holder thereof.

                                       9
<PAGE>

                              (2) The Series B Liquidation  Preference  shall be
proportionately  adjusted in the event of any stock split,  reverse stock split,
stock  combination,  reclassification  or pursuant to any other  adjustment with
respect to the Series B Preferred Stock.

          Section 4.          Optional Redemption.
                              -------------------

                  (a)         Optional Redemption by Holders of Preferred Stock.
                              -------------------------------------------------
At any time after the tenth  anniversary of the Initial  Issuance Date, a holder
of Series A Preferred  Stock may,  upon 15 Business  Days written  notice to the
Company, require the Company to redeem in whole or in part, the shares of Series
A Preferred  Stock  (including  shares issuable in respect of accrued but unpaid
dividends)(the  "Holder Optional  Redemption") for either (x) cash or (y) Common
                 ---------------------------
Stock  (which  may  be  unregistered),  at  the  Company's  option,  at a  total
redemption  price  equal to the Series A  Liquidation  Preference,  subject to a
maximum  redemption  price of  $130,035,684.35  in the  event  that  Shareholder
Approval  is  not  obtained.  If the  Company  elects  to  settle  such  maximum
redemption  price in Common  Stock rather than in cash then the number of shares
of Common Stock shall be  determined  as set forth  below,  subject to a maximum
number of shares of Common  Stock of  18,186,809  in the event that  Shareholder
Approval is not obtained  (the  "Holder  Redemption  Price").  Such notice shall
                                 -------------------------
specify the date of the Holder Optional Redemption (which date shall be at least
15 Business Days after such notice (the "Holder Redemption Date")). Common Stock
                                         ----------------------
used as  consideration  for the redemption price pursuant to clause (y) shall be
valued at its market  value  (based on the average of the  closing  price of the
Company's  Common  Stock on the  American  Stock  Exchange  or  other  principal
national securities exchange on which the Common Stock is listed or to which the
shares are admitted  for trading for the 20 trading days prior to  determination
or, if no such trading market exists,  as determined by a nationally  recognized
investment  bank (which  shall  consider  the  liquidity  of the Common Stock in
making its valuation)); provided, that in no event shall the value attributed to
the Common Stock pursuant to clause (y) be less than the then  Conversion  Price
and in the event that  Shareholder  Approval is not  obtained be less than $7.15
per share of Common Stock (the price determined pursuant to clause (y) being the
"Common Stock Redemption Value").
 -----------------------------

                  (b)         Optional Redemption by Company.
                              ------------------------------

                              (1) At any time after April 19, 2006,  the Company
may, upon 45 days written notice to the holders of the Preferred  Stock,  redeem
all, but not less than all, of the then  outstanding  shares of Preferred  Stock
(including  shares  issuable  in respect of  accrued  but unpaid  dividends)(the
"Company Optional Redemption") for cash at a redemption price per share equal to
 ---------------------------
the Liquidation Preference (the "Company Redemption Price"); provided,  however,
                                 ------------------------    --------   -------
that the average of the closing price of the Common Stock on the American  Stock
Exchange or other national  securities exchange where the Common Stock is listed
or to which the shares are admitted for trading for the 20 trading days prior to
the  delivery by the  Company of the notice of  redemption  exceeds  150% of the
Conversion  Price.  Such notice shall  specify the date of the Company  Optional
Redemption  (which  shall be at least 45 days after such  notice  (the  "Company
                                                                         -------
Redemption  Date")).  The shares of Preferred  Stock will remain  convertible or
----------------
exchangeable until the redemption price is paid.

                                       10
<PAGE>
                              (2) Upon the  occurrence  of a Change of  Control,
the Company  may,  upon 10 days notice to the  holders of the  Preferred  Stock,
redeem all, but not less than all, of the then  outstanding  shares of Preferred
Stock (the "Change of Control  Redemption")  for cash at the Company  Redemption
            -----------------------------
Price; provided, however, that if such Change of Control occurs before the fifth
       --------  -------
anniversary of the Initial Issuance Date, the Company shall pay to the holder of
each share of Preferred Stock the Series A No-Call Period Dividend or the Series
B No-Call  Period  Dividend,  as the case may be, at least five days  before the
Change of Control  Redemption.  The shares of  Preferred  Stock,  including  the
shares issued  pursuant to the Series A No-Call Period  Dividend or the Series B
No-Call Period Dividend,  will remain  convertible or exchangeable,  as the case
may be, until the redemption price is paid.  Notwithstanding the foregoing,  the
Company may not redeem the Series B Preferred  Stock  pursuant to this paragraph
4(b)(2)  unless the Change of Control giving rise to such right of redemption is
also a Reorganization Event, subject to section 5 below.

                              (c) Payment of Redemption  Price.  All accrued and
                                  ----------------------------
unpaid  dividends on Preferred  Stock through the date of the Holder  Redemption
Date or Company Redemption Date, as the case may be, shall be payable in full at
the time of redemption.  Payment of the Holder  Redemption  Price and payment of
accrued and unpaid dividends in connection with a Holder Optional Redemption may
be made in cash or, to the extent that a  sufficient  number of  authorized  but
unissued  shares of Common  Stock  (which may be  unregistered)  are  available,
Common Stock at the Common Stock Redemption  Value, or any combination  thereof.
Payment of accrued and unpaid  dividends in connection  with a Company  Optional
Redemption shall be made in cash.

                              (d)  Status  of  Redeemed  Shares.  Any  shares of
                                   ----------------------------
Preferred Stock that shall at any time have been redeemed  pursuant to section 4
hereof shall, after such redemption,  have the status of authorized but unissued
shares of Preferred Stock, without designation as to series.

          Section 5.          Consideration   Received  upon  a  Reorganization,
                              --------------------------------------------------
Merger,   etc.  In  the  event  of  any  reorganization  of  the  Company,   any
-------------
reclassification of the stock of the Company, any consolidation or merger of the
Company, any sale or conveyance of all or substantially all of the assets of the
Company,  or any other event that results in the Common Stock being changed into
the same or a different number of other securities of another entity (other than
events described in section 6(e) below) or exchanged for assets (including cash)
from another entity (any such event, a "Reorganization Event") shall be effected
                                        --------------------
in such a way that the  holders of Common  Stock  shall be  entitled  to receive
stock, securities or assets (including cash) from another entity with respect to
or in  exchange  for  their  shares  of Common  Stock,  then,  prior to and as a
condition of such reorganization, reclassification,  consolidation, merger, sale
or conveyance,  lawful and adequate  provision shall be made whereby the holders
of Series B  Preferred  Stock may  thereafter  elect to receive  such  shares of
stock,  securities or assets  (including  cash) as may be issued or payable with
respect to or in exchange  for a number of  outstanding  shares of Common  Stock
equal to the number of shares of Common Stock  issuable upon  conversion of such
shares of Series B Preferred  Stock  (assuming such Series B Preferred Stock had
been first  exchanged  for Series A Preferred  Stock),  had such  Reorganization
Event not taken place.  In any such case,  appropriate  provision  shall be made
with  respect to the rights and  interests  of the holders of Series B Preferred
Stock to the end that the provisions  hereof shall thereafter be applicable,  as
nearly as may be, in  relation  to any stock,  securities  or assets  thereafter
deliverable  upon the exchange of the Series B Preferred  Stock  (assuming  such

                                      11
<PAGE>

Series B Preferred  Stock had been  exchanged  for Series A Preferred  Stock and
then the Series A Preferred  Stock was converted to Common  Stock).  The Company
shall  not  effect  any  such  Reorganization  Event  (i)  unless  prior  to  or
simultaneously   with  the  consummation   thereof  the  survivor  or  successor
corporation  (if other than the Company)  resulting from such  consolidation  or
merger or the  corporation  purchasing  such  assets  shall  assume  by  written
instrument  executed  and sent to each holder of Series B Preferred  Stock,  the
obligation to deliver to such holder of Series B Preferred  Stock such shares of
stock,  securities  or  assets  (including  cash)  as,  in  accordance  with the
foregoing provisions, such holder of Series B Preferred Stock may be entitled to
receive, and containing the express assumption by such successor  corporation of
the due and punctual  performance and observance of every provision herein to be
performed and observed by the Company and of all  liabilities and obligations of
the  Company  hereunder,  and (ii) in which the  Company,  as opposed to another
party to the Reorganization  Event, shall be required under any circumstances to
make a cash payment at any time to the holders of the Series B Preferred Stock.

          Section 6.          Conversion  Rights.  The  holders  of the Series A
                              -------------------
Preferred Stock shall have conversion rights as follows:

                  (a)         Generally. At any time after the Conversion Shares
                              ----------
issuable upon  conversion of the shares of Series A Preferred  Stock sold on the
Initial  Issuance Date are approved for listing on the American Stock  Exchange,
the shares of Series A Preferred  Stock  shall be  convertible  at any time,  in
whole or in part, into fully paid and  non-assessable  shares  (calculated as to
each  conversion  to the  nearest  1/100 of a share)  of  Common  Stock,  at the
conversion price,  determined as hereinafter  provided, in effect at the time of
conversion,  with each share of Series A Preferred Stock having a value equal to
the Series A Liquidation  Preference.  The price at which shares of Common Stock
shall be issued upon conversion (herein called the "Conversion  Price") shall be
                                                    ------------------
initially $7.15 per share of Common Stock.  The Conversion  Price and the number
of shares of Common Stock into which the Series A Preferred Stock is convertible
shall be adjusted in certain instances as provided below.

                  (b)         Mechanics of Conversion. All or any portion of the
                              -----------------------
shares of Series A Preferred  Stock held by any holder shall  convert  effective
immediately  prior to the close of  business  on the date that the  Company  has
received from such holder of Series A Preferred Stock (i) a notice of conversion
to the  Company,  setting  forth the number of shares to be  converted,  (ii) an
executed  stock  power  assigning  and  transferring  such  shares  of  Series A
Preferred Stock to the Company,  (iii)  certificates  representing the shares of
Series A  Preferred  Stock to be  converted  and (iv) a  written  notice  to the
Company  stating  therein its name or the name or names of its nominees in which
it wishes the Common  Stock to be issued.  The shares of Common  Stock  shall be
deemed issued upon compliance with the forgoing  requirements  and the holder of
Series A Preferred  Stock  thereof  shall be entitled to exercise  and enjoy all
rights with respect to such shares of Common Stock.  The Company shall,  as soon
as practicable thereafter,  but in any event, within 10 Business Days, issue and
deliver certificates  representing Common Stock at such office to such holder of
Series  A  Preferred  Stock,  or to his  or  her  nominee  or  nominees.  If the
conversion  is  in  connection  with  an  underwritten  offering  of  securities
registered  pursuant to the Securities Act, the conversion  shall be conditioned
upon the closing with the  underwriters  of the sale of  securities  pursuant to
such offering, in which event the person(s) entitled to receive the Common Stock
upon  conversion  of the Series A  Preferred  Stock  shall not be deemed to have
converted such Series A Preferred Stock until  immediately  prior to the closing
of such sale of securities.

                                       12
<PAGE>


                  (c)         Reservation  of Shares.  The Company  shall at all
                              ----------------------
times reserve and keep available out of its  authorized  but unissued  shares of
Common Stock for the purpose of issuance  upon  conversion of shares of Series A
Preferred  Stock  sufficient  shares of Common Stock,  and shall take all action
necessary so that shares of Common Stock so issued will be validly issued, fully
paid and nonassessable.

                  (d)         Adjustment     to     Conversion     Price    Upon
                              --------------------------------------------------
Reclassifications,  Reorganizations,  Consolidations or Mergers. In the event of
---------------------------------------------------------------
any  reorganization  of the Company,  any  reclassification  of the stock of the
Company  (other  than a change in par value or from par value to no par value or
from no par value to par value),  any  consolidation or merger of the Company or
any other event that results in the Common Stock being  changed into the same or
a different number of other  securities,  each share of Series A Preferred Stock
shall   concurrently   with   the   effectiveness   of   such    reorganization,
reclassification,  consolidation,  merger or other event be convertible into the
kind and  number of  shares  of stock or other  securities  or  property  of the
Company or of the successor  corporation  resulting from such  consolidation  or
surviving  such  merger,  if any, to which the holder of the number of shares of
Common Stock deliverable  (immediately prior to the time of such reorganization,
reclassification,  consolidation, merger or other event) upon conversion of such
Series A Preferred  Stock  would have been  entitled  upon such  reorganization,
reclassification,  consolidation,  merger or other event. The provisions of this
clause shall similarly apply to successive  reorganizations,  reclassifications,
consolidations, mergers or similar events.

                  (e)         Adjustment   to   Conversion   Price   Upon  Stock
                              --------------------------------------------------
Dividends,  Splits and  Reclassifications.  In case the Company  shall (i) pay a
-----------------------------------------
dividend in Common Stock or (ii)  subdivide or split-up its  outstanding  Common
Stock,  then,  following  the record  date for the  determination  of holders of
Common Stock entitled to receive such stock dividend,  or to be affected by such
subdivision or split-up,  the Conversion Price shall be appropriately  decreased
so that the number of shares of Common Stock  issuable on conversion of Series A
Preferred Stock shall be increased in proportion to such increase in outstanding
shares.

                  (f)         Adjustment to Conversion Price Upon  Combinations.
                              -------------------------------------------------
If  the  number  of  shares  of  Common  Stock  outstanding  is  decreased  by a
combination of the  outstanding  shares of Common Stock into a smaller number of
shares of Common  Stock,  then,  following  the record date to determine  shares
affected  by such  combination,  the  Conversion  Price  shall be  appropriately
increased so that the number of shares of Common Stock issuable on conversion of
each share of Series A Preferred  Stock shall be decreased in proportion to such
decrease in outstanding shares.

                  (g)         Conversion Price Adjustment.
                              ---------------------------

                              (1)  Whenever the number of shares of Common Stock
into which the Series A Preferred  Stock is  convertible is adjusted as provided
under  section 6, the  Conversion  Price shall be adjusted by  multiplying  such
Conversion Price immediately prior to such adjustment by a fraction:

                                       13
<PAGE>


                                (A) the  numerator  of which shall be the number
          of shares of Common  Stock into which the Series A Preferred  Stock is
          convertible immediately prior to such adjustment; and

                                (B) the denominator of which shall be the number
          of shares of Common  Stock into which the Series A Preferred  Stock is
          convertible immediately thereafter.

                              (2) Notwithstanding  the foregoing,  no adjustment
of the  Conversion  Price  shall be made in an amount less than $0.01 per share,
but any such lesser adjustment shall be carried forward and shall be made at the
time of and together with the next subsequent  adjustment  which,  together with
any adjustments so carried forward, shall amount to $0.01 per share or more.

                  (h)         Notices.  Whenever  the number of shares of Common
                              -------
Stock into which the Series A  Preferred  Stock is  convertible  is  adjusted as
herein provided, the Company shall cause to be promptly delivered to each holder
of shares of Series A Preferred  Stock at its last address as it shall appear on
the  books  of  the  Company  by  telecopier  transmission  or  by a  nationally
recognized overnight delivery service,  notice of such adjustment or adjustments
setting  forth the  number of shares of Common  Stock  into  which the  Series A
Preferred Stock is convertible and the Conversion Price after such adjustment, a
brief  statement of the facts  requiring such  adjustment and the computation by
which such  adjustment was made. The Company shall give notice to each holder of
shares of Series A Preferred  Stock of any  transaction  contemplated by section
6(d) not later than 10 days  following  the  consummation  of such  transaction,
setting  forth the  estimated  date of  consummation.  Any such notice  shall be
treated as effective or having been given (i) if transmitted  by telecopier,  on
the Business  Day of confirmed  receipt by the  addressee  thereof,  and (ii) if
delivered by overnight courier, on the Business Day delivered.

          The  failure  to give the notice  required  in this  paragraph  or any
defect  therein  shall not affect the legality or validity of the event  causing
the adjustment of the  Conversion  Price or any other action taken in connection
therewith.

In case:

                              (1) the  Company  shall  declare a dividend on its
Common Stock Equivalents payable otherwise than in cash;

                              (2) the Company  shall  authorize  the granting to
the holders of its Common Stock  Equivalents  of rights or warrants to subscribe
for  or  purchase  any  shares  of  Common  Stock   Equivalents  (or  securities
convertible into shares of Common Stock Equivalents);

                              (3) of any  reclassification  of the capital stock
of the Company (other than a subdivision or combination of outstanding shares of
Common Stock), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or

                                       14
<PAGE>


                              (4)  the   Company   shall  be   (voluntarily   or
involuntarily) dissolved, liquidated or wound up;

then the  Company  shall  cause to be  mailed  to the  holders  of the  Series A
Preferred  Stock,  at  least  10  days  prior  (or in the  case  of  involuntary
dissolution  or  liquidation  as  soon  thereafter  as is  practicable)  to  the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
rights or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock  Equivalents  of record to be entitled to such dividend,
rights  or  warrants  are to be  determined,  or (y)  the  date  on  which  such
reclassification,    consolidation,   merger,   sale,   transfer,   dissolution,
liquidation  or winding up is expected to become  effective,  and the date as of
which it is expected that holders of Common Stock Equivalents of record shall be
entitled to exchange their shares of Common Stock  Equivalents  for  securities,
cash or other property  deliverable upon such  reclassification,  consolidation,
merger, sale, transfer, dissolution, liquidation or winding up.

                  (i)         Common Stock; Other Securities. For the purpose of
                              ------------------------------
this  section  6, the term  "Common  Stock"  shall  mean (i) the  class of stock
designated as the Common Stock of the Company at the date of this Certificate of
Designations and (ii) any other class of stock resulting from successive changes
or  reclassification  of such Common Stock  consisting  solely of changes in par
value,  or from par value to no par value, or from no par value to par value. In
the event that at any time, as a result of an  adjustment  made pursuant to this
section 6, the holder of Series A  Preferred  Stock  shall  become  entitled  to
convert  its shares of Series A  Preferred  Stock into any shares of the Company
other than Common Stock,  thereafter  the number of such other shares into which
the Series A Preferred  Stock is convertible  and the  Conversion  Price of such
shares shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the shares
contained in this section 6.

          Section 7.          Automatic  Exchange of Series B  Preferred  Stock.
                              -------------------------------------------------
Each share of Series B Preferred Stock shall  automatically  be exchanged for an
equal  number of shares of Series A  Preferred  Stock  upon the  receipt  by the
Company of Shareholder Approval and receipt of HSR Approval,  to the extent such
HSR Approval is required,  so long as such exchange will not result in a "change
of control" under the terms of the indentures  governing the Existing High Yield
Indebtedness.  Immediately  before the exchange of the Series B Preferred Stock,
the  Company  shall pay to the  holders of the  Series B  Preferred  Stock,  all
accrued and unpaid dividends on the Series B Preferred Stock. If for any reason,
the exchange of all outstanding  shares of Series B Preferred Stock would result
in a  "change  of  control"  under  the terms of the  indentures  governing  the
Existing  High  Yield  Indebtedness,  only  such  number  of  shares of Series B
Preferred  Stock as would not cause such "change of control"  shall be exchanged
for  shares of Series A  Preferred  Stock and the  remaining  shares of Series B
Preferred  Stock  will  be  exchanged  as soon as and to the  extent  that  such
exchange would not result in a "change of control" under the terms of indentures
governing the Existing High Yield Indebtedness.

                                       15
<PAGE>


          Section 8.          Voting Rights.
                              -------------

                  (a)         Subject to section  8(b) below,  upon the transfer
of any shares of Series A Preferred Stock, other than a transfer to an Affiliate
of an Apollo Purchaser, consistent with the Standstill Agreement, the transferee
of such  shares of Series A  Preferred  Stock  shall be  entitled  to vote on an
as-converted  basis upon all matters to be voted upon by the stockholders of the
Company,  voting together with the holders of Common Stock and the Class B Stock
as a single  class;  provided  that such  as-converted  voting  rights shall not
extend (i) to the election of directors or (ii) any matter which is reserved for
consideration (by law or by the Certificate of Incorporation) exclusively by the
holders of Common Stock or the Class B Stock.

                  (b)         Except as otherwise provided by applicable law and
in addition to any voting  rights  provided  by section  9(a) below,  the Apollo
Purchasers  (which term,  for the purposes of this  section  8(b),  includes any
Affiliates  of the  Apollo  Purchasers)  shall not have any voting  rights  with
respect  to any  Preferred  Stock  held by  such  Apollo  Purchasers;  provided,
however, if an Event of Default exists and such Event of Default is not cured or
waived  within 45 days,  the holders of Preferred  Stock shall have the right to
elect that number of directors which, when added to any  representatives  of the
holders of the Preferred  Stock  (including the Apollo  Purchasers)  then on the
Board of Directors,  will  constitute a majority of the Board of Directors.  The
Board of Directors  shall be expanded as necessary to accomplish the purposes of
this section  8(b).  Upon the cure of such Event of Default,  the Board shall be
reduced to the size immediately  before such Event of Default took place and the
holders of the  Preferred  Stock  shall have such rights to elect such number of
directors as before the Event of Default.

          Section 9.          Protective and Other Provisions.
                              --------------------------------

                  (a)         So long as the Apollo Purchasers  continue to have
Preferred Stock Approval Rights as granted under the Investment  Agreement,  (i)
the  Apollo  Purchasers  that are  holders of Series A  Preferred  Stock and the
Apollo V Purchasers who hold Series B Preferred  Stock,  prior to receipt of HSR
Approval,  to the extent  such HSR  Approval  is  required,  and (ii) the Apollo
Purchasers  that are holders of Series A Preferred  Stock and Series B Preferred
Stock, acting together as a single class, after HSR Approval, to the extent such
HSR Approval is required,  shall have the right to elect three  directors to the
Board of  Directors.  If for any reason,  any  director  appointed by the Apollo
Purchasers  ceases to be a director before the expiration of his or her term and
the Apollo  Purchasers  have Preferred  Stock Approval  Rights at such time, the
Apollo  Purchaser  who elected such  director  shall have the right to appoint a
director to fill such vacancy.

                  (b)         So long as any of the  shares of  Preferred  Stock
remain  outstanding,  the  Company  shall  not  enter  into  or  incur  any  new
indebtedness  that would restrict the ability of the Company to pay dividends on
the  Preferred  Stock in the  manner  required  pursuant  to  section  2 hereof.
Notwithstanding the foregoing,  the Company may make amendments to the Company's
Senior Facility which would restrict the ability of the Company to pay dividends
on the Preferred  Stock so long as such  restriction  does not extend beyond the
PIK Period.

                                       16
<PAGE>


          Section 10.         Limitations.  In  addition  to  any  other  rights
                              -----------
provided by  applicable  law, so long as any shares of Series A Preferred  Stock
are  outstanding,  the Company shall not,  without the affirmative  vote, or the
written consent as provided by law, of the Requisite  Holders,  at a vote of the
holders of Series A Preferred Stock, voting separately as a class,

                  (a)         create,  authorize  or issue any class,  series or
shares of (i) Senior Stock,  (ii) Parity Stock,  or (iii) Junior Stock,  if such
Junior Stock may be redeemed,  at the option of the holder thereof,  on or prior
to the Holder Redemption Date; or

                  (b)         change  the  preferences,  rights or  powers  with
respect to the Preferred Stock so as to affect the Preferred Stock adversely.

          Section 11.         Dividend  Received  Deduction.  For federal income
                              -----------------------------
tax purposes, the Company shall report distributions of cash and property (other
than the Additional Securities) on the Series A Preferred Stock as dividends, to
the extent of the  Company's  current and  accumulated  earnings and profits (as
determined for federal income tax purposes).

          Section 12.         Definitions.  For purposes of this  Certificate of
                              ------------
Designations, the following definitions shall apply:

          "Additional Securities" has the meaning set forth in paragraph 2(b)(2)
           ---------------------
hereof.

          "Additional  Series  A  Securities"  has  the  meaning  set  forth  in
           ---------------------------------
paragraph 2(a)(2) hereof.  "Additional  Series B Securities" has the meaning set
forth in paragraph 2(b)(2) hereof.

          "Affiliate"  means,  with respect to any Person,  (i) any other Person
           ---------
directly or indirectly controlling or controlled by, or under direct or indirect
common  control with,  such specified  Person;  (ii) any other Person that owns,
directly or  indirectly,  ten percent or more of such Person's  capital stock or
other  equity  interests  or any officer or director of any such Person or other
Person;  or (iii)  with  respect to any  natural  Person,  any  person  having a
relationship  with such Person by blood,  marriage  or adoption  not more remote
than first cousin; provided,  however, that with respect to Apollo or the Apollo
Purchasers,  the term  "Affiliate"  shall not include any limited partner of the
Apollo Purchasers or their Affiliates nor any portfolio or investee companies of
the Apollo Purchasers or their Affiliates so long as, in either case, (x) Apollo
does not  control or have  investment  authority  over such  limited  partner or
portfolio or investee company; (y) such limited partner or portfolio or investee
company  does not  operate in the  domestic  theatrical  exhibition  industry or
otherwise compete with the Company;  and (z) Apollo, the Apollo Purchaser or its
Affiliates do not own, directly or indirectly,  33% or more of such portfolio or
investee company's capital stock or other equity interests. For purposes of this
definition,  "control" when used with respect to any specified  Person means the
power to  direct  the  management  and  policies  of such  Person,  directly  or
indirectly,  whether through the ownership of voting securities,  by contract or
otherwise;  and the terms  "controlling" and "controlled" shall have correlative
meanings.

                                       17
<PAGE>


          "AIF V" means the Apollo Investment Fund V, L.P.
           -----

          "AOP V" means the Apollo Overseas Partners V, L.P.
           -----

          "Apollo V Purchasers" means AIF V and AOP V, and any other partnership
           -------------------
or entity  affiliated  with and  managed by Apollo over which  Apollo  exercises
investment  authority,  including  voting  and  dispositive  rights and to which
either AIF V or AOP V assigns any of their respective interests hereunder.

          "Apollo" means Apollo  Management IV, L.P.,  Apollo Management V, L.P.
           ------
and their Affiliates.

          "Apollo  Purchasers"  has the  meaning  set  forth  in the  Investment
           ------------------
Agreement.

          "Applicable Rate" has the meaning set forth in section 2(b) hereof.
           ---------------

          "Board of Directors" means the Board of Directors of the Company.
           ------------------

          "Business Day" has the meaning set forth in section 2(a) hereof.
           ------------

          "Certificate of Incorporation"  means the Certificate of Incorporation
           ----------------------------
of the Company, as amended from time to time, and as filed with the Secretary of
State of the State of Delaware.

          "Change  of  Control"  means (i) a merger,  consolidation  or  similar
           --------------------
transaction  involving the Company  after which  holders of the Company's  stock
before such  transaction do not own at least 50% of the combined voting power of
all shares  generally  entitled  to vote in the  election  of the members of the
Board of Directors of the surviving  entity,  (ii) the acquisition by any person
or group  (other than Apollo or the holders of Class B Stock (so long as each is
not a part of a  group  (as  such  term  is  defined  in  Section  13(d)  of the
Securities  Exchange  Act of 1934,  as amended and the  regulations  promulgated
thereunder) on the Initial  Issuance  Date) of beneficial  ownership of at least
50% of the combined voting power of all shares generally entitled to vote in the
election of the members of the Board of Directors  of the Company,  or (iii) the
sale  of all or  substantially  all of the  assets  of the  Company  or  similar
transaction  (the  determination of aggregate voting power to recognize that the
Company's  Class B Stock has ten votes per share and the Company's  Common Stock
has one vote per share).

          "Class B Stock"  means  the  Class B Stock,  par  value  $0.66 2/3 per
            ------------
share, of the Company.

          "Common Stock" means the Common Stock,  par value $0.66 2/3 per share,
           ------------
of the Company.


          "Common Stock  Equivalents"  means all Common Stock and any securities
           -------------------------
(whether  voting  common  stock or nonvoting  common  stock) of any class of the
Company which have no  preference in respect of amounts  payable in the event of
any  voluntary  or  involuntary  liquidation  dissolution  or  winding up of the
Company.

                                       18
<PAGE>

          "Common Stock  Redemption  Value" has the meaning set forth in section
           -------------------------------
4(a) hereof.

          "Company"  means  AMC  Entertainment  Inc.,  a  Delaware  corporation.
           -------

          "Company  Optional  Redemption"  has the  meaning set forth in section
           -----------------------------
4(b) hereof.

          "Company  Redemption  Date" has the meaning set forth in section  4(b)
           -------------------------
hereof.

          "Company  Redemption  Price" has the meaning set forth in section 4(b)
           --------------------------
hereof.

          "Conversion  Factor"  shall mean,  on any date of  determination,  the
           ------------------
quotient of (x) the Liquidation  Preference of the Series A Preferred divided by
                                                                      ----------
(y) the Conversion Price.

          "Conversion Price" has the meaning set forth in section 6(a) hereof.
           ----------------

          "Conversion  Shares"  means the  shares of Common  Stock  issued  upon
           ------------------
conversion  of the Series A Preferred  Stock,  including  the shares of Series A
Preferred Stock issued upon conversion of the Series B Preferred Stock.

          "Dividend  Payment  Date" has the  meaning  set forth in section  2(a)
           -----------------------
hereof.

          "Effective  Sale Price" shall mean,  in the case of a sale of Series A
           ---------------------
Preferred  Stock,  the quotient of (x) the sale price per share of such Series A
Preferred stock divided by (y) the Conversion Factor.
                ----------

          "Event of  Default"  means (i) an event of default as set forth  under
           -----------------
the Company's Senior Indebtedness, Existing High Yield Indebtedness or any other
indebtedness of the Company in principal  amount in excess of $10.0 million;  or
(ii) failure of the Company to pay cash  dividends on the  Preferred  Stock when
required  pursuant to the terms of this  Certificate  of  Designations,  without
regard to any prohibition by applicable law or otherwise  against  payment;  and
(iii) a  violation  by the  Company of the terms of section 8 of the  Investment
Agreement,  provided, however, that no Event of Default pursuant to (iii) above,
            -----------------
shall be  deemed  to have  occurred  unless  Apollo,  on  behalf  of the  Apollo
Purchasers,  provides written notice in advance of such violation to the Company
describing  such  violation  and such  notice is  accompanied  by an  opinion of
counsel confirming such violation.

          "Existing  High  Yield  Indebtedness"  means  the  currently  existing
           -----------------------------------
indebtedness of the Company  pursuant to (i) the Indenture dated March 19, 1997,
by and between the Company and Bank of New York,  as Trustee,  in respect of AMC
Entertainment   Inc.'s  9  1/2%  Senior  Subordinated  Notes  due  2009  and  as
supplemented  by the First  Supplemental  Indenture dated June 9, 1997 and as it
may be amended or  supplemented  from time to time and (ii) the Indenture  dated
January 27, 1999,  by and between the Company and Bank of New York,  as Trustee,
in respect of AMC Entertainment Inc.'s 9 1/2% Senior Subordinated Notes due 2011
and as it may be amended or supplemented from time to time.

                                       19
<PAGE>

          "GCL" shall have the meaning set forth in the first  paragraph of this
           ---
Certificate of Designations.  "Holder  Optional  Redemption" has the meaning set
forth in section 4(a) hereof.

          "Holder  Redemption  Date" has the meaning  set forth in section  4(a)
           ------------------------
hereof.

          "Holder  Redemption  Price" has the meaning set forth in section  4(a)
           -------------------------
hereof.

          "HSR  Approval"  means  the  expiration  or early  termination  of any
           -------------
applicable  waiting  period after any filing  required by the  Hart-Scott-Rodino
Antitrust Improvements Act of 1976 with respect to the acquisition of the Series
A  Preferred  Stock and Series B  Preferred  Stock and the  exchange of Series B
Preferred Stock for Series A Preferred Stock contemplated by this Certificate of
Designations.

          "Initial  Issuance  Date"  means  April 19,  2001,  the first  date of
           -----------------------
issuance  of the  Preferred  Stock  pursuant  to the  closing of the  Investment
Agreement.

          "Initial   Solicitation"   means  shall  mean  the   solicitation   of
           ----------------------
Shareholder  Approval at the Company's next regularly  scheduled  annual meeting
after the Closing Date,  which shall take place no later than 270 days after the
Initial Issuance Date.

          "Investment Agreement" means the Investment Agreement entered in as of
           --------------------
April 19, 2001 among the Company and certain investors named therein.

          "Issue Price" has the meaning set forth in section 3 hereof.
           -----------

          "Junior Stock" has the meaning set forth in section 1 hereof.
           ------------

          "Liquidation" has the meaning set forth in section 1 hereof.
           -----------

          "Liquidation  Payment"  has the  meaning  set  forth in  section  3(b)
           --------------------
hereof.

          "Liquidation  Preference"  has the  meaning set forth in section 3 (b)
           -----------------------
hereof.

          "Original  Issuance  Date" has the meaning  set forth in section  2(a)
           ------------------------
hereof.

          "Parity Stock" has the meaning set forth in section 1 hereof.
           ------------

          "Person" means all natural  persons,  corporations,  business  trusts,
           ------
associations,  companies,  partnerships,  joint ventures, and other entities and
governments and agencies or political subdivisions thereof.

                                       20
<PAGE>

          "PIK Period"  means the period  between the Initial  Issuance Date and
           ----------
the third anniversary thereof.

          "Preferred  Stock" means the Series A Preferred Stock and the Series B
           ----------------
Preferred Stock.

          "Preferred  Stock  Approval  Rights"  has the meaning set forth in the
           ----------------------------------
Investment Agreement.

          "Purchasers"  shall mean the Apollo  Purchasers and any partnership or
           ----------
other  entity  to  which  any  of the  foregoing  assigns  any of its  interests
hereunder, consistent with the provisions of the Investment Agreement.

          "Reorganization  Event"  shall have the meaning set forth in section 5
           ---------------------
hereof.

          "Requisite  Holders"  means  holders of a majority of Preferred  Stock
           ------------------
currently outstanding.

          "Senior  Facility"  shall  mean the U.S.  $  425,000,000  Amended  and
           ----------------
Restated Credit  Agreement,  dated as of April 10, 1997, among AMC Entertainment
Inc, as the Borrower;  and The Bank of Nova Scotia, as Administrative Agent; and
Bank of America National Trust and Savings Association,  as Documentation Agent;
and  Various  Financial  Institutions  as  Lenders,  as  amended  by the  Second
Amendment,  dated as of  January  16,  1998,  as  further  amended  by the Third
Amendment,  dated as of March 15,  1999 and as  further  amended  by the  Fourth
Amendment, dated as of March 29, 2000.

          "Senior  Indebtedness"  shall  mean  the  Company's  current  existing
           --------------------
indebtedness pursuant to the Senior Facility.

          "Senior Stock" has the meaning set forth in section 1 hereof.
           ------------

          "Series A  Applicable  Rate" has the meaning set forth in section 2(a)
           --------------------------
hereof.

          "Series A  Liquidation  Payment"  has the meaning set forth in section
           ------------------------------
3(a) hereof.

          "Series A Liquidation Preference" has the meaning set forth in section
           -------------------------------
3(a) hereof.

          "Series  A  No-Call  Period  Dividend"  has the  meaning  set forth in
           ------------------------------------
section 2(a)(5) hereof.

          "Series A  Preferred  Stock"  has the  meaning  set forth in section 1
           --------------------------
hereof.

          "Series B  Applicable  Rate" has the meaning set forth in section 2(b)
           --------------------------
hereof.

          "Series B  Liquidation  Payment"  has the meaning set forth in section
           ------------------------------
3(b) hereof.

                                       21
<PAGE>

          "Series B Liquidation Preference" has the meaning set forth in section
           -------------------------------
3(b) hereof.

          "Series  B  No-Call  Period  Dividend"  has the  meaning  set forth in
           -------------------------------------
section 2(b)(4) hereof.

          "Series B  Preferred  Stock"  has the  meaning  set forth in section 1
           --------------------------
hereof.

          "Shareholder  Approval"  shall mean  approval  by (i) the holders of a
           ---------------------
majority of the Common Stock,  voting  separately as a class and (ii) a majority
of the votes cast by the  Company's  stockholders  voting  together  as a single
class, of an amendment to the Company's Certificate of Incorporation  increasing
the number of authorized shares of Common Stock (so as to permit the issuance of
additional  shares of Series A Preferred  Stock and the underlying  Common Stock
and until  there are  enough  shares  that  would  allow all  shares of Series A
Preferred  Stock to  convert  into  Common  Stock  and all  shares  of  Series B
Preferred Stock to be exchanged for Series A Preferred Stock, as contemplated by
this Certificate of Designations).

          "Standstill  Agreement" means the Standstill Agreement entered into as
           ---------------------
of April 19, 2001 among the Company and certain investors named therein.

          "Subsidiary" has the meaning set forth in section 2(e) hereof.
           ----------

          "Threshold  Amount" has the  meaning  set forth in section  2(b)(5)(D)
           -----------------
hereof.

          "Total  Unconverted  Shares" shall mean, on any date of determination,
           --------------------------
the  product of (x) the number of shares of Series A Preferred  Stock  issued to
date multiplied by (y) the Conversion Factor.

          "Underlying Shares Sold" shall mean, in the case of a sale of Series A
           ----------------------
Preferred  Stock,  the product of (x) the number of shares of Series A Preferred
Stock sold in such sale transaction multiplied by (y) the Conversion Factor.
                                    -------------

                                       22

<PAGE>


          IN WITNESS  WHEREOF,  the  Company  has  caused  this  Certificate  of
Designation to be signed by __________________,  its _________,  and attested by
________________, its Secretary, this 19th day of April, 2001.



                                    By:_____________________________________
                                       Name:
                                       Title:

Attested:


By:_________________________
       Secretary


                                       23

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>4
<FILENAME>d25605_ex99-4.txt
<DESCRIPTION>EXHIBIT 99.4
<TEXT>


===============================================================================


















                          REGISTRATION RIGHTS AGREEMENT

                                      dated

                                 APRIL 19, 2001

                                  by and among

                             AMC ENTERTAINMENT INC.

                                       and

                         APOLLO INVESTMENT FUND IV, L.P.

                        APOLLO OVERSEAS PARTNERS IV, L.P.

                         APOLLO INVESTMENT FUND V, L.P.

                        APOLLO OVERSEAS PARTNERS V, L.P.










===============================================================================


<PAGE>




                                TABLE OF CONTENTS

                                                                            Page

SECTION 1.         Definitions................................................1
SECTION 2          Demand Registration........................................4
SECTION 3.         Piggyback Registration.....................................6
SECTION 4.         "MARKET STAND-OFF" AGREEMENT...............................6
SECTION 5.         Expenses...................................................7
SECTION 6.         Preparation and Filing.....................................7
SECTION 7.         Indemnification............................................9
SECTION 8.         Underwriting Agreement....................................12
SECTION 9.         Information by Holders....................................12
SECTION 10.        Exchange Act Compliance...................................12
SECTION 11.        No Conflict of Rights.....................................12
SECTION 12.        TRANSFER OF REGISTRATION RIGHTS...........................12
SECTION 13.        MISCELLANEOUS.............................................13


                                       i

<PAGE>


          This  REGISTRATION  RIGHTS  AGREEMENT  (this  "Agreement") is made and
                                                         ---------
entered  into  this 19th day of April  2001 by and  among (i) AMC  ENTERTAINMENT
INC., a Delaware  corporation (the "Company"),  (ii) APOLLO  INVESTMENT FUND IV,
L.P., a Delaware limited  partnership  ("AIF IV"), and APOLLO OVERSEAS  PARTNERS
IV, L.P., a Cayman  Islands  exempted  limited  partnership  ("AOP IV"), and any
other partnership or entity affiliated with and managed by Apollo and over which
Apollo exercises investment authority,  including voting and dispositive rights,
and to which either AIF IV or AOP IV assigns any of their  respective  interests
hereunder  (collectively,  the "Apollo IV Investors"),  (iii) APOLLO  INVESTMENT
FUND V,  L.P.,  a Delaware  limited  partnership  ("AIF V") and APOLLO  OVERSEAS
PARTNERS V, L.P., a Cayman Islands exempted limited  partnership  ("AOP V"), and
any other  partnership or entity  affiliated with and managed by Apollo and over
which Apollo exercises  investment  authority,  including voting and dispositive
rights,  and to which  either  AIF V or AOP V  assigns  any of their  respective
interests hereunder,  consistent with the provisions hereof  (collectively,  the
"Apollo V Investors", and together with the Apollo IV Investors, the "Investors"
and individually,  an "Investor").  Certain terms used and not otherwise defined
in the text of this Agreement are defined in Section 1 of this Agreement.


                                    RECITALS

          WHEREAS, the parties to the Agreement are simultaneously entering into
that  certain  Investment  Agreement  of even  date  herewith  (the  "Investment
                                                                      ----------
Agreement")  pursuant to which the Investors  have agreed to purchase  shares of
---------
Preferred Stock (as defined below) from the Company,  which are convertible into
shares of the Company's Common Stock (as defined below).

          WHEREAS,  the  execution  of this  Agreement  is an  inducement  and a
condition  precedent to the purchase by the Investors of the shares of Preferred
Stock under the Investment Agreement.

          NOW THEREFORE,  the Company and the Investors,  each,  intending to be
legally bound hereto, agree as follows:

     Section 1 Definitions. As used in this Agreement, the following terms shall
               -----------
have the following

meanings:

          "Affiliate"  means,  with respect to any Person,  (i) any other Person
           ---------
directly or indirectly controlling or controlled by, or under direct or indirect
common  control with,  such specified  Person;  (ii) any other Person that owns,
directly or  indirectly,  ten percent or more of such Person's  capital stock or
other  equity  interests  or any officer or director of any such Person or other
Person;  or (iii)  with  respect to any  natural  Person,  any  person  having a
relationship  with such Person by blood,  marriage  or adoption  not more remote

                                       2
<PAGE>

than first cousin; provided,  however, that with respect to Apollo or the Apollo
                   --------   -------
Purchasers,  the term  "Affiliate"  shall not include any limited partner of the
Apollo Purchasers or their Affiliates nor any portfolio or investee companies of
the Apollo Purchasers or their Affiliates so long as, in either case, (x) Apollo
does not  control or have  investment  authority  over such  limited  partner or
portfolio or investee company; (y) such limited partner or portfolio or investee
company  does not  operate in the  domestic  theatrical  exhibition  industry or
otherwise  compete  with the Company  and (z) Apollo  does not own,  directly or
indirectly, 33% or more of such portfolio or investee company's capital stock or
other equity  interests.  For purposes of this  definition,  "control" when used
with respect to any  specified  Person means the power to direct the  management
and  policies  of such  Person,  directly  or  indirectly,  whether  through the
ownership  of  voting  securities,  by  contract  or  otherwise;  and the  terms
"controlling" and "controlled" shall have correlative meanings.

          "Apollo" means Apollo  Management IV, L.P., Apollo Management V, L.P.,
           ------
and their respective Affiliates.

          "Board" means the Board of Directors of the Company.
           -----

          "Closing"  has the  meaning  assigned  to such term in the  Investment
           -------
Agreement.

          "Closing Date" has the meaning assigned to such term in the Investment
           ------------
Agreement.

          "Commission"   means  the  United  States   Securities   and  Exchange
           ----------
Commission or any other Federal agency at the time  administering the Securities
Act and Exchange Act.

          "Common  Stock" means the Common Stock,  par value $0.662/3 per share,
           -------------
of the Company.

          "Demand Registration" has the meaning assigned to such term in Section
           -------------------
2(a).

          "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
           ------------
or any similar successor  federal statute,  and the rules and regulations of the
Commission promulgated thereunder,  all as the same shall be in effect from time
to time.

          "Indemnified  Party" has the meaning  assigned to such term in Section
           ------------------
7(a).

          "Information" has the meaning assigned to such term in Section 6(i).
           -----------

          "Inspectors" has the meaning assigned to such term in Section 6(i).
           ----------

          "Investment Agreement" shall have the meaning assigned to such term in
           --------------------
the Recitals.

          "Investor"  and  "Investors"  shall have the meaning  assigned to such
           --------------------------
term in the Preamble.

          "Lock-up  Period"  shall  have the  meaning  assigned  to such term in
           ---------------
Section 4.

          "Losses" shall have the meaning assigned to such term in Section 7(a).
           ------

          "NASDAQ" means the automated quotation system of the NASD.
           ------

                                       2
<PAGE>

          "Other  Shares"  means  the  shares  of  Common  Stock  that  are  not
           -------------
Registrable Shares.

          "Person"  shall  be  construed  broadly  and  shall  include,  without
           ------
limitation,  an  individual,  a  partnership,  an  investment  fund,  a  limited
liability corporation, a corporation, an association, a joint stock corporation,
a trust,  a joint venture,  an  unincorporated  organization  and a governmental
entity or any department, agency or political subdivision thereof.

          "Piggyback  Registration" shall have the meaning assigned to such term
           -----------------------
in Section 3(a).

          "Preferred  Stock" means the Series A Preferred Stock and the Series B
           ----------------
Preferred Stock.

          "Records" has the meaning assigned to such term in Section 6(i).
           -------

          "Registrable  Shares" means (i) any shares of Common Stock held by the
           -------------------
Investors or any permitted  transferee at any time, (ii) any shares of Preferred
Stock held by the Investors or any permitted  transferee at any time,  (iii) any
shares of Common Stock and/or Preferred Stock issuable or issued upon conversion
of the Preferred Stock held by the Investors or any permitted  transferee at any
time, and (iv) any Common Stock or Preferred  Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
that is issued as) a  dividend  or other  distribution  with  respect  to, or in
exchange for, or in replacement of, the shares referenced in (i), (ii) and (iii)
above;  except,  in each case, for shares of Common Stock and/or Preferred Stock
(x) the sale of which  is  covered  by a  registration  statement  that has been
declared  effective  under the  Securities  Act or (y) which are  eligible to be
resold under Rule 144(k).

          "Rule 144" means Rule 144 promulgated  under the Securities Act or any
           --------
successor rule thereto or any complementary rule thereto.

          "Securities Act" means the Securities Act of 1933, as amended,  or any
           --------------
similar  successor  federal  statute,  and  the  rules  and  regulations  of the
Commission promulgated thereunder,  all as the same shall be in effect from time
to time.

          "Selling  Holder"  shall  have the  meaning  assigned  to such term in
           ---------------
Section 6(b).

          "Selling  Holders'  Counsel"  shall have the meaning  assigned to such
           ---------------------------
term in Section 6(b).

          "Series A Preferred  Stock" means the  Company's  Series A Convertible
           --------------------------
Preferred Stock, par value $0.66 2/3 per share.

          "Series B Preferred  Stock" means the Company's  Series B Exchangeable
           -------------------------
Preferred Stock, par value $0.66 2/3 per share.

                                       3
<PAGE>

          "Standstill  Agreement"  shall mean the Standstill  Agreement  entered
           ---------------------
into on the date  hereof by and  between  the  Company,  Apollo,  and the Apollo
Investors.

     Section 2.Demand Registration.
               -------------------

          (a)  Subject to  subparagraphs  (i),  (ii) and (iii)  below and at any
time beginning 180 days after the date of execution of this  Agreement,  holders
of at least 30% of the total number of outstanding  Registrable Shares (assuming
conversion  of all  shares of  Preferred  Stock  into  Common  Stock) may make a
written request to the Company to effect a registration under the Securities Act
of all or a portion of the Registrable Shares held by such requesting holders in
accordance  with this  Section 2 (a "Demand  Registration").  The request  shall
                                     --------------------
specify the number of Registrable  Shares proposed to be included in such Demand
Registration and the intended method of distribution, which may be pursuant to a
shelf registration.  The Company shall promptly use its best efforts to effect a
Demand Registration,  as expeditiously as possible, on an appropriate form under
the  Securities  Act of the  Registrable  Shares  which the  Company has been so
requested  to  register;  provided,  however,  that  the  Company  shall  not be
                          --------   -------
obligated to effect any Demand  Registration  under the Securities Act except in
accordance with the following provisions:

               (i) the  Company  shall not be  obligated  to file more than five
          registration  statements in total  pursuant to this Section 2, subject
          to paragraph (c) below;

               (ii) the Company shall not be obligated to file any  registration
          statement  during  any  period  in which  (A) any  other  registration
          statement  (other than on Form S-4 or Form S-8  promulgated  under the
          Securities  Act or any  successor  forms  thereto)  pursuant  to which
          Registrable  Shares  are to be or were  sold  has been  filed  and not
          withdrawn or has been declared  effective  within the prior 90 days or
          (B) the  Company  has  determined  in good  faith that the filing of a
          registration  statement  would  require  the  disclosure  of  material
          information  that the  Company  has a bona fide  business  purpose for
          preserving as  confidential,  such filing to be delayed until the date
          which is 90 days after such request for registration  pursuant to this
          Section 2(a), provided,  that the Company may only so delay the filing
                        --------
          or effectiveness of a registration  statement pursuant to this Section
          2(a)(ii)(B) on one occasion during any twelve-month period; and

               (iii) with  respect to the Demand  Registration  pursuant to this
          Section  2,  the  Company  may  include  in such  Demand  Registration
          securities  that are not  Registrable  Shares  if,  in the view of the
          managing underwriter,  the inclusion thereof will not adversely affect
          such offering. If such Demand Registration is an underwritten offering
          and the managing  underwriter  advises the Company in writing that the
          inclusion of all  Registrable  Shares and the Other Shares proposed to
          be included  in such  Demand  Registration  would  interfere  with the
          successful marketing (including pricing) of all such securities,  then
          the number of  Registrable  Shares  and Other  Shares  proposed  to be
          included  in  such  Demand  Registration  shall  be  included  in  the
          following order:

                                       4
<PAGE>

               (A) First, up to the number of Registrable Shares requested to be
                   -----
          included which in the opinion of the managing  underwriter can be sold
          without  adversely  affecting the  marketability of the offering,  pro
          rata among the respective  holders  thereof on the basis of the amount
          of Registrable Shares requested to be included in the offering by each
          such holder;

               (B) Second,  any Other Shares the Company proposes to be included
                   ------
          in the Demand Registration; and

               (C) Third,  any Other  Shares  requested  to be  included  in the
                   -----
          Demand  Registration  by any holder  having  contractual  registration
          rights.

          (b) The holders of Registrable Shares requesting a Demand Registration
may, in the notice delivered  pursuant to paragraph 2(a) above,  elect that such
Demand  Registration  be an  underwritten  offering.  Upon such  election,  such
holders shall select one or more nationally  recognized  investment banks to act
as the managing underwriter and shall select any additional  investment banks to
be  used  in  connection  with  such  offering,   provided  that  such  managing
underwriter and investment banks must be reasonably satisfactory to the Company.
The Company  shall,  together  with all holders  proposing  to sell  Registrable
Shares in such offering, enter into a customary underwriting agreement with such
underwriters.

          (c) A request for a Demand  Registration  may be  withdrawn by written
notice to the Company by the holders a majority of the Registrable  Shares to be
included in such registration with the following consequences:

               (i) If such request for a Demand  Registration is withdrawn prior
          to the  filing  date of the  registration  statement,  such  withdrawn
          registration shall not count as a Demand  Registration for purposes of
          paragraph (a) above;

               (ii) If such request for a Demand Registration is withdrawn after
          the  filing  date  of the  registration  statement  but  prior  to its
          effective  date,  such  withdrawn  registration  shall  not count as a
          Demand  Registration  for  purposes  of  paragraph  (a)  above  if the
          participating   holders  (x)  have  reimbursed  the  Company  for  all
          out-of-pocket expenses incurred by the Company in connection with such
          withdrawn  registration  or  (y)  (1)  reasonably  believed  that  the
          registration  statement contained an untrue statement of material fact
          or omitted to state a material fact  required to be stated  therein or
          necessary  to make the  statements  made therein not  misleading,  (2)
          notified  the  Company  of such fact and  requested  that the  Company
          correct such alleged  misstatement or omission and (3) the Company has
          refused to correct such alleged misstatement or omission; and

               (iii) A registration statement that becomes effective shall count
          as a Demand  Registration  for purposes of paragraph  (a) above unless
          (x)  the  registration  statement  becomes  subject  to a stop  order,
          injunction or other order of the Commission or any other  governmental
          agency or court or (y) the  conditions  to  closing  specified  in the
          purchase   agreement  or  underwriting   agreement   entered  into  in
          connection  with such  registration  are not satisfied,  other than by
          some act or omission by the holders.

                                       5
<PAGE>

          Section 3.     Piggyback Registration.
                         ----------------------

          (a)  If at any time the  Company  proposes  for any reason to register
Other  Shares  under  the  Securities  Act  (other  than on Form S-4 or Form S-8
promulgated  under the Securities Act or any successor forms thereto),  it shall
promptly  give  written  notice  to the  holders  of  Registrable  Shares of its
intention to so register the Other Shares and, upon the written  request,  given
within 15 days after delivery of any such notice by the Company,  of any holders
of Registrable Shares to include in such registration Registrable Shares held by
such holders  (which  request  shall  specify the number of  Registrable  Shares
proposed to be included in such registration) (a "Piggyback Registration"),  the
                                                  ----------------------
Company  shall use its  reasonable  best  efforts to cause all such  Registrable
Shares to be  included  in such  Piggyback  Registration  on the same  terms and
conditions as the Other Shares (of similar type as the  Registrable  Securities)
otherwise being sold in such Piggyback Registration;  provided, however, that if
                                                      --------  -------
the  managing  underwriter  advises  the  Company  that  the  inclusion  of  all
Registrable  Shares or Other  Shares  proposed to be included in such  Piggyback
Registration would interfere with the successful  marketing  (including pricing)
of the Other Shares proposed to be registered by the Company, then the number of
Registrable  Shares and Other Shares  proposed to be included in such  Piggyback
Registration shall be included in the following order:

               (i)  First, the Other Shares to be registered by the Company;
                    -----

               (ii) Second,  Registrable  Shares,  pro rata based upon the total
                    ------
          number of Registrable Shares sought to be included in the registration
          and shares having piggyback rights owned by each holder at the time of
          such registration; and

               (iii)  Third,  Other  Shares  (not  included in clause (i) above)
                      -----
          having contractual or incidental piggyback rights, pro rata based upon
          the total number of such Other Shares owned by each holder at the time
          of such registration.

          (b) In connection  with any offering under this Section 3 involving an
underwriting,   the  Company  shall  not  be  required  to  include  a  holder's
Registrable  Shares in the underwritten  offering unless such holder accepts the
terms  of  the   underwriting  as  agreed  upon  between  the  Company  and  the
underwriters selected by the Company.

          Section 4."Market  Stand-Off"  Agreement.  If requested by the Company
                     -----------------------------
and an  underwriter of any capital stock or other  securities of the Company,  a
holder shall not sell or otherwise transfer or dispose of any Registrable Shares
or any other shares of capital  stock of the Company held by such holder  (other
than those included in the registration) during the 180 day period following the
effective  date of a  registration  statement  of the  Company  filed  under the
Securities  Act, or for such shorter period as the officers and directors of the
Company shall agree (the "Lock-Up Period").
                          --------------

          The  obligations  described  in this  Section  4 shall  not apply to a
registration  relating solely to employee  benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated  in the future.  The Company may impose
stop-transfer  instructions with respect to the shares of Common Stock (or other
securities)  subject to the foregoing  restriction until the end of such Lock-Up
Period.

                                       6
<PAGE>

          Section 5.  Expenses.  The  Company  shall  bear  the  expense  of any
                      --------
registrations  effected  pursuant  to  Sections  2  and  3  including,   without
limitation, all registration and filing fees (including all expenses incident to
filing  with the  American  Stock  Exchange  or any  other  national  securities
exchange where the Registrable Shares are listed or accepted for trading),  fees
and expenses of complying with securities and blue sky laws,  printing expenses,
and fees and expenses of the Company's counsel and accountants, and the fees and
expenses of the Selling Holders' Counsel (as defined below) of up to $25,000 for
each  registration,  but excluding any  underwriters'  or brokers'  discounts or
commissions,  transfer  taxes (to the extent that such taxes are required by law
to be paid by the Selling  Holders) and the fees of any counsel,  accountants or
advisors to any Selling Holder, other than the Selling Holders' Counsel.

          Section 6.  Preparation  and Filing.  If and  whenever  the Company is
                      -----------------------
under an  obligation  pursuant to the  provisions  of this  Agreement to use its
reasonable best efforts to effect the  registration  of any Registrable  Shares,
the Company shall, as expeditiously as practicable:

               (a) with respect to a  registration  under  Sections 2 and 3, use
its reasonable  best efforts to cause a registration  statement that proposes to
register such Registrable  Shares to become and remain effective for a period of
270 days or until  all of such  Registrable  Shares  have been  disposed  of (if
earlier);

               (b)  furnish,  at  least  five  business  days  before  filing  a
registration  statement  that proposes to register such  Registrable  Shares,  a
prospectus  relating  thereto or any amendments or supplements  relating to such
registration statement or prospectus,  to each holder of Registrable Shares (the
"Selling  Holder"),  to any  counsel to any  Selling  Holder and to one  counsel
 ---------------
selected by the holders of a majority of such  Registrable  Shares (the "Selling
                                                                         -------
Holders' Counsel"), copies of all such documents proposed to be filed;
----------------

               (c)  prepare and file with the  Commission  such  amendments  and
supplements to such registration statement and the prospectus related thereto as
may be necessary to keep such registration  statement effective for at least the
periods set forth in Section 6(a) or until all of such  Registrable  Shares have
been  disposed  of (if  earlier)  and  to  comply  with  the  provisions  of the
Securities Act with respect to the sale or other disposition of such Registrable
Shares;

               (d) notify in writing any  counsel to any Selling  Holder and the
Selling  Holders'  Counsel  promptly  (i) of the  receipt by the  Company of any
notification with respect to any comments by the Commission with respect to such
registration  statement or prospectus or any amendment or supplement  thereto or
any request by the Commission for the amending or  supplementing  thereof or for
additional  information with respect thereto, (ii) of the receipt by the Company
of any  notification  with respect to the issuance by the Commission of any stop
order suspending the effectiveness of such registration  statement or prospectus
or any amendment or supplement  thereto or the  initiation or threatening of any
proceeding  for that  purpose  and (iii) of the  receipt  by the  Company of any
notification  with  respect  to the  suspension  of the  qualification  of  such
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purposes;

                                       7
<PAGE>

               (e) use its best efforts to register or qualify such  Registrable
Shares under such other securities or blue sky laws of such jurisdictions as any
seller of Registrable  Shares reasonably  requests and do any and all other acts
and things which may be reasonably  necessary or advisable to enable such seller
of Registrable Shares to consummate the disposition in such jurisdictions of the
Registrable  Shares owned by such seller;  provided,  however,  that the Company
                                           --------   -------
will not be required to qualify  generally  to do  business,  subject  itself to
general  taxation or consent to general  service of process in any  jurisdiction
where it would not otherwise be required so to do but for this paragraph (e);

               (f) furnish to each seller of such Registrable Shares such number
of copies of a summary  prospectus or other prospectus,  including a preliminary
prospectus,  in conformity with the requirements of the Securities Act, and such
other  documents  as such  Selling  Holder  may  reasonably  request in order to
facilitate the public sale or other disposition of such Registrable Shares;

               (g) use its best efforts to cause such  Registrable  Shares to be
registered with or approved by such other  governmental  agencies or authorities
as may be necessary by virtue of the business and  operations  of the Company to
enable the  seller or sellers  thereof to  consummate  the  disposition  of such
Registrable Shares;

               (h) notify on a timely basis each Selling Holder at any time when
a  prospectus  relating to such  Registrable  Shares is required to be delivered
under the Securities Act within the  appropriate  period  mentioned in paragraph
(a) of this  Section,  of the  happening  of any  event as a result of which the
prospectus included in such registration  statement, as then in effect, includes
an  untrue  statement  of a  material  fact or omits to  state a  material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading  in light of the  circumstances  then existing and, at the request of
such seller, prepare and furnish to such seller a reasonable number of copies of
a supplement to or an amendment of such  prospectus as may be necessary so that,
as thereafter  delivered to the offerees of such shares,  such prospectus  shall
not include an untrue  statement of a material  fact or omit to state a material
fact required to be stated therein or necessary to make the  statements  therein
not misleading in light of the circumstances then existing;

               (i) make  available for  inspection by any counsel to any Selling
Holder and the Selling Holders' Counsel or any underwriter  participating in any
disposition pursuant to such registration statement and any attorney, accountant
or  other  agent   retained   by  any  such   underwriter   (collectively,   the
"Inspectors"),  all pertinent  financial and other records,  pertinent corporate
 ----------
documents and properties of the Company (collectively,  the "Records"), as shall
                                                             -------
be  reasonably  necessary  to  enable  them  to  exercise  their  due  diligence
responsibility,  and cause the  Company's  officers,  directors and employees to
supply all information (together with the Records, the "Information") reasonably
                                                        ------------
requested by any such Inspector in connection with such registration  statement.

                                       8
<PAGE>

Any of the  Information  which  the  Company  determines  in  good  faith  to be
confidential,  and of which determination the Inspectors are so notified,  shall
not be disclosed by the Inspectors unless (i) the disclosure of such Information
is  necessary  to avoid or correct a material  misstatement  or  omission in the
registration statement, (ii) the release of such Information is ordered pursuant
to a subpoena or other  order from a court of  competent  jurisdiction  or (iii)
such  Information has been made generally  available to the public;  the Selling
Holder agrees that it will, upon learning that disclosure of such Information is
sought in a court of  competent  jurisdiction,  give  notice to the  Company and
allow the Company, at the Company's expense, to undertake  appropriate action to
prevent disclosure of the Information deemed confidential;

               (j)  if  the  offering  is to be  underwritten,  enter  into  any
necessary agreement in connection therewith (including an underwriting agreement
containing customary representations, warranties and agreements);

               (k) in the case of an underwritten offering, use its best efforts
to obtain from its independent certified public accountants "comfort" letters in
customary  form  and at  customary  times  and  covering  matters  of  the  type
customarily covered by comfort letters;

               (l) in the case of an underwritten offering, use its best efforts
to obtain from its outside counsel an opinion or opinions in customary form;

               (m) provide a transfer agent and registrar (which may be the same
entity and which may not be the Company) for such Registrable Shares;

               (n) issue to any underwriter to which any Selling Holder may sell
shares in such offering certificates evidencing such Registrable Shares;

               (o) list such  Registrable  Shares on the American Stock Exchange
or any national  securities exchange on which any shares of the Common Stock are
listed, or if the Common Stock is not listed on a national securities  exchange,
use its best efforts to qualify such  Registrable  Shares for  inclusion on such
national  securities  exchange  or NASDAQ as the  holders of a majority  of such
Registrable Shares shall request;

               (p) otherwise use its best efforts to comply with all  applicable
rules  and   regulations   of  the   Commission   and  make   available  to  its
securityholders,  as soon as reasonably practicable,  earnings statements (which
need not be  audited)  covering  a period of 12 months  beginning  within  three
months after the effective date of the  registration  statement,  which earnings
statements  shall satisfy the provisions of Section 11(a) of the Securities Act;
and

               (q) use its best  efforts to take all other  steps  necessary  to
effect the registration of such Registrable Shares contemplated hereby.

          Section 7.  Indemnification.
                      ----------------

          (a) In connection  with any  registration  of any  Registrable  Shares
under the Securities Act pursuant to this Agreement, the Company shall indemnify
and hold  harmless  the seller of such  Registrable  Shares,  its  officers  and
directors, each underwriter, broker or any other person acting on behalf of such
seller and each other person,  if any, who controls any of the foregoing persons
within the meaning of the Securities Act (the  "Indemnified  Party") against any
                                                ------------------

                                       9
<PAGE>

losses, claims, damages or liabilities,  joint or several (or actions in respect
thereof), to which any Indemnified Party may become subject under the Securities
Act or otherwise,  insofar as such losses,  claims,  damages or liabilities  (or
actions in respect thereof)  ("Losses") arise out of or are based upon an untrue
                               ------
statement  or alleged  untrue  statement  of a material  fact  contained  in the
registration statement under which such Registrable Shares were registered under
the Securities Act, any  preliminary  prospectus or final  prospectus  contained
therein or otherwise  filed with the  Commission,  any  amendment or  supplement
thereto  or any  document  incident  to  registration  or  qualification  of any
Registrable  Shares,  or arise out of or are based upon the  omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements  therein not  misleading,  and shall  reimburse
such Indemnified  Party for any legal or other expenses  reasonably  incurred by
any of them in connection with investigating or defending any Losses;  provided,
                                                                       --------
however,  that the  Company  shall not be liable in any such case to the  extent
-------
that any Losses  arise out of or are based upon an untrue  statement  or alleged
untrue  statement  or omission  or alleged  omission  made in said  registration
statement,  preliminary prospectus, final prospectus,  amendment,  supplement or
document incident to registration or qualification of any Registrable  Shares in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company   through  an  instrument  duly  executed  by  such  Selling  Holder  or
underwriter specifically for use in the preparation thereof; provided,  further,
                                                             --------   -------
that with respect to any preliminary  prospectus,  the foregoing indemnity shall
not  inure  to  the  benefit  of (a)  any  underwriter  or,  in  the  case  of a
registration  statement  filed  with  respect  to an  offering  which  is not an
underwritten  offering,  any Selling Holder,  from whom the person asserting any
Losses  purchased   Registrable  Shares  or  (b)  any  Person  controlling  such
underwriter or Selling Holder,  if (i) a copy of the prospectus (as then amended
or   supplemented  if  the  Company  shall  have  furnished  any  amendments  or
supplements  thereto)  was  required  by law to  have  been  delivered  by  such
underwriter or Selling Holder (as applicable),  (ii) the prospectus had not been
sent or  given  by or on  behalf  of such  underwriter  or  Selling  Holder  (as
applicable) to such person with or prior to a written  confirmation  of the sale
of the  Registrable  Shares to such person,  (iii) the prospectus (as so amended
and supplemented) would have cured the defect giving rise to the Losses and (iv)
such failure to deliver the prospectus (as so amended and  supplemented) was not
the result of noncompliance by the Company with Section 6(f) hereof.

          (b) In connection with any  registration  of Registrable  Shares under
the  Securities  Act  pursuant to this  Agreement,  each  Selling  Holder  shall
indemnify  and hold  harmless  (in the same manner and to the same extent as set
forth in the preceding paragraph of this Section) the Company,  each director of
the  Company,  each officer of the Company,  each  underwriter,  broker or other
person acting on behalf of such Selling Holder,  each person who controls any of
the foregoing  persons  within the meaning of the  Securities Act and each other
Selling Holder under such  registration  statement with respect to any statement
or omission from such  registration  statement,  any  preliminary  prospectus or
final prospectus  contained therein or otherwise filed with the Commission,  any
amendment or  supplement  thereto or any document  incident to  registration  or
qualification of any Registrable  Shares, if such statement or omission was made
in reliance upon and in  conformity  with written  information  furnished to the
Company or such underwriter  through an instrument duly executed by such Selling
Holder  specifically  for  use  in  connection  with  the  preparation  of  such
registration  statement,  preliminary prospectus,  final prospectus,  amendment,
supplement or document; provided, however, that the obligation to indemnify will
                        --------  -------
be several,  not joint and several,  among such Selling Holder,  and the maximum
amount of liability in respect of such indemnification shall be in proportion to
and limited to, in the case of each Selling  Holder,  an amount equal to the net
proceeds  actually  received by such Selling Holder from the sale of Registrable
Shares effected pursuant to such registration.

                                       10
<PAGE>

          (c) The  indemnification  required  by this  Section 7 will be made by
periodic payments during the course of the investigation or defense, as and when
bills are received or expenses  incurred,  subject to prompt refund in the event
any such payments are determined not to have been due and owing hereunder.

          (d) Promptly  after receipt by an  Indemnified  Party of notice of the
commencement  of any  action  involving  a claim  referred  to in the  preceding
paragraphs of this Section 7, such Indemnified Party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the  commencement  of such  action  (it  being  understood  that no  delay in
delivering  or failure to deliver  such notice  shall  relieve the  indemnifying
persons from any  liability or obligation  hereunder  unless (and then solely to
the extent  that) the  indemnifying  person is  prejudiced  by such delay and/or
failure).  In case any such action is brought against an Indemnified  Party, the
indemnifying  party will be entitled to participate in and to assume the defense
thereof,  jointly with any other  indemnifying  party similarly  notified to the
extent  that  it  may  wish,  with  counsel  reasonably   satisfactory  to  such
Indemnified  Party,  and  after  notice  from  the  indemnifying  party  to such
Indemnified  Party  of its  election  so to  assume  the  defense  thereof,  the
indemnifying  party  shall not be  responsible  for any legal or other  expenses
subsequently  incurred by the latter in  connection  with the  defense  thereof;
provided, however, that if any Indemnified Party shall have reasonably concluded
--------  -------
that  there may be one or more legal or  equitable  defenses  available  to such
Indemnified  Party which are  additional to or conflict with those  available to
the indemnifying  party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity  agreement  provided in
this  Section 7, the  indemnifying  party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party and such indemnifying
party shall reimburse such  Indemnified  Party and any person  controlling  such
Indemnified  Party for that  portion  of the fees and  expenses  of any  counsel
retained by the  Indemnified  Party which is  reasonably  related to the matters
covered by the indemnity agreement provided in this Section 7.

          (e) The indemnification  provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the  Indemnified  Party or any officer,  director or controlling  person of such
Indemnified Party and will survive the transfer of securities.

          (f) If the indemnification provided for in this Section 7 is held by a
court of competent  jurisdiction to be unavailable to an Indemnified  Party with
respect to any Losses then the indemnifying  party, in lieu of indemnifying such
Indemnified Party hereunder,  shall contribute to the amounts paid or payable by
such  Indemnified  Party as a result  of such  Losses in such  proportion  as is
appropriate to reflect the relative fault of the  indemnifying  party on the one
hand and of the Indemnified Party on the other in connection with the statements
or  omissions  which  resulted  in such  Losses  as well as any  other  relevant
equitable  considerations.  The relative fault of the indemnifying  party and of
the  Indemnified  Party shall be determined by reference to, among other things,
whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission or alleged  omission to state a material  fact  relates to  information

                                       11
<PAGE>

supplied by the indemnifying  party or by the Indemnified Party and the parties'
relative intent, knowledge,  access to information and opportunity to correct or
prevent such  statement or omission.  The Company and the Selling  Holders agree
that it would  not be just  and  equitable  if  contributions  pursuant  to this
paragraph 7(f) were  determined by pro rata allocation or by any other method of
                                   --------
allocation which did not take into account the equitable considerations referred
to herein. The amount paid or payable to an Indemnified Party as a result of the
Losses  referred to above shall be deemed to include,  subject to the limitation
set forth in paragraph 7(d), any legal or other expenses  reasonably incurred in
connection  with  investigating  or  defending  the  same.  Notwithstanding  the
foregoing,  in no event shall the amount  contributed by a seller of Registrable
Shares exceed the aggregate net offering  proceeds  received by such seller from
the sale of its Registrable Shares.

          Section 8. Underwriting  Agreement.  Notwithstanding the provisions of
                     -----------------------
Sections 6 and 7, to the extent that the Company and the Selling  Holders  shall
enter  into an  underwriting  or similar  agreement,  which  agreement  contains
provisions  covering  one  or  more  issues  addressed  in  such  sections,  the
provisions  contained in such sections  addressing such issue or issues shall be
superseded with respect to such registration by such other agreement.

          Section 9.  Information by Holders.  The Selling Holders shall furnish
                      ----------------------
to the Company such written  information  regarding  such Selling Holder and the
distribution  proposed by such  Selling  Holder as the  Company  may  reasonably
request in writing and as shall be reasonably  required in  connection  with any
registration, qualification or compliance referred to in this Agreement.

          Section 10. Exchange Act Compliance. The Company shall comply with all
                      -----------------------
of the  reporting  requirements  of the  Exchange  Act and with all other public
information reporting requirements of the Commission which are conditions to the
availability  of Rule 144 for the sale of the  Registrable  Shares.  The Company
shall  cooperate  with the  Investors in supplying  such  information  as may be
necessary for the Investors to complete and file any information reporting forms
presently  or  hereafter  required  by  the  Commission  as a  condition  to the
availability of Rule 144.

          Section 11. No Conflict of Rights. The Company represents and warrants
                      ---------------------
to the Investors that the registration rights granted to the Investors hereby do
not conflict  with any other  registration  rights  granted by the Company.  The
Company  may grant,  after the date  hereof,  registration  rights to holders of
capital stock of the Company to the extent that such registration  rights do not
conflict with the registration rights granted hereby.

          Section 12. Transfer of Registration  Rights. The rights hereunder may
                      --------------------------------
be  transferred  or  assigned  in  connection  with a  transfer  of  Registrable
Securities  by any Investor to an Affiliate  of an Investor.  Additionally,  the
rights hereunder may be transferred or assigned in connection with a transfer of
at  least  10% of the  then  outstanding  Registrable  Shares  by any  Investor;
provided,  such  transfer  has been  made in  compliance  with the  terms of the
--------
Standstill  Agreement.  Notwithstanding  the foregoing,  such rights may only be

                                       12
<PAGE>

transferred or assigned provided that all of the following additional conditions
are  satisfied:  (a) such transfer or assignment is effected in accordance  with
applicable securities laws; (b) such transferee or assignee agrees in writing to
become  subject  to the terms of this  Agreement;  and (c) the  Company is given
written notice by such Investor of such transfer or assignment, stating the name
and  address of the  transferee  or assignee  and  identifying  the  Registrable
Securities with respect to which such rights are being transferred or assigned.

          Section 13.  Miscellaneous.
                       -------------

                    (a)  Severability. Whenever possible, each provision of this
                         ------------
Agreement  will be interpreted in such manner as to be effective and valid under
applicable  law, but if any  provision of this  Agreement is held to be invalid,
illegal or  unenforceable in any respect under any applicable law or rule in any
jurisdiction,  such invalidity,  illegality or unenforceability  will not affect
any  other  provision  or any  other  jurisdiction,  and such  invalid,  void or
otherwise  unenforceable  provisions shall be null and void. It is the intent of
the  parties,  however,  that  any  invalid,  void  or  otherwise  unenforceable
provisions be automatically replaced by other provisions which are as similar as
possible in terms to such invalid,  void or otherwise  unenforceable  provisions
but are valid and enforceable to the fullest extent permitted by law.

                    (b)  Entire  Agreement.  This  Agreement,  together with the
                         -----------------
Investment  Agreement,  the Standstill  Agreement and all  schedules,  exhibits,
certificates  and other  documents  delivered  therewith,  contains  the  entire
agreement  among the  parties  with  respect to the  subject  matter  hereof and
supersedes all prior arrangements or understandings with respect hereto.

                    (c)  Successors and Assigns.  This Agreement  shall bind and
                         ----------------------
inure to the  benefit of the  Company  and the  Investors  and their  respective
successors and permitted assigns.

                    (d)  Counterparts.    This   Agreement   may   be   executed
                         ------------
simultaneously  in two or more  counterparts,  any one of which need not contain
the signatures of more than one party, but all such counterparts  taken together
will constitute one and the same agreement.  It shall not be necessary in making
proof  of  this  Agreement  to  produce  or  account  for  more  than  one  such
counterpart. The failure of any Investor to execute this Agreement does not make
it invalid as against any other Investor.

                    (e)  Remedies.  The  Investors  shall  have all  rights  and
                         --------
remedies  reserved  for  the  Investors  pursuant  to  this  Agreement  and  the
Certificate of Incorporation and the Bylaws of the Company, as amended,  and all
rights and remedies  which such  Investor has been granted at any time under any
other  agreement  or contract  and all of the rights which such holder has under
any law or equity.  Any person  having any rights  under any  provision  of this
Agreement  will be entitled  to enforce  such  rights  specifically,  to recover
damages  by  reason of any  breach of any  provision  of this  Agreement  and to
exercise all other rights granted by law or equity.

                                       13
<PAGE>

          It is acknowledged  that it will be impossible to measure in money the
damages  that would be suffered  if the  parties  fail to comply with any of the
obligations herein imposed on them and that in the event of any such failure, an
aggrieved  person  will be  irreparably  damaged  and will not have an  adequate
remedy at law.  Any such person  shall,  therefore,  be  entitled to  injunctive
relief, including specific performance, to enforce such obligations,  and if any
action  should be  brought in equity to enforce  any of the  provisions  of this
Agreement,  none of the parties  hereto shall raise the defense that there is an
adequate remedy at law.

          (f)  Notices. All notices, requests, consents and other communications
               -------
hereunder  to any party  shall be  deemed to be  sufficient  if  contained  in a
written instrument and shall be deemed to have been duly given when delivered in
person, by telecopy,  by  nationally-recognized  overnight courier,  or by first
class registered or certified mail, postage prepaid,  addressed to such party at
the address set forth below or such other address as may hereafter be designated
in writing by the addressee to the addressor:

                          (i)      if to the Company, to:

                                   AMC Entertainment Inc.
                                   106 West 14th Street
                                   P.O. Box 419615
                                   Kansas City, MO
                                   Attention:   Peter Brown
                                    Fax: (816) 480-2517

                                    with a copy to:

                                    Lathrop & Gage L.C.
                                    2345 Grand Boulevard
                                    Suite 2800
                                    Kansas City, MO 64108
                                    Attention:  Raymond F. Beagle, Jr.
                                    Fax: (816) 292-2001

                                    and a copy to:

                                    Skadden, Arps, Slate, Meagher & Flom LLP
                                    4 Times Square
                                    New York, NY 10036
                                    Attention: Eileen T. Nugent
                                    Fax: (212) 735-2000

                                       14
<PAGE>

                                   (ii)     and, if to the Investors, to:

                                    Apollo Investment Fund IV, L.P.
                                    Apollo Overseas Partners IV, L.P.
                                    c/o Apollo Management IV, L.P.

                                    and

                                    Apollo Investment Fund V, L.P.
                                    Apollo Overseas Partners V, L.P.
                                    c/o Apollo Management V, L.P.
                                    1301 Avenue of the Americas, 38th Floor
                                    New York, NY 10019
                                    Attention:  Marc Rowan
                                    Fax:  (212) 515-3262

                                    with copies to:

                                    Akin, Gump, Strauss, Hauer & Feld, LLP
                                    1333 New Hampshire Ave., NW
                                    Washington, D.C.  20036
                                    Attention:  Bruce S. Mendelsohn
                                    Fax:  (202) 887-4288

All such notices, requests, consents and other communications shall be deemed to
have been delivered when received, or if received after the close of business,
on the next business day.

          (g)  Governing Law; Jurisdiction; Venue; Process. This Agreement shall
               -------------------------------------------
be governed by and  construed  in  accordance  with the laws of the State of New
York  without  regard to any choice of law or conflict of law  provision or rule
that would cause the application of the laws of any jurisdiction  other than the
State of New  York.  Any  legal  action  in a  proceeding  arising  out of or in
connection  with this  Agreement  shall be brought in the courts of the State of
New York,  of the County and City of New York or of the United  States  District
Court for the Southern  District of New York,  and by execution  and delivery of
this  Agreement,  the parties  hereby  irrevocably  accept for themselves and in
respect  of  their  property,  generally  and  unconditionally,   the  exclusive
jurisdiction of the aforesaid courts.  The parties hereby  irrevocably waive any
objection  which they may now or  hereafter  have to laying of  jurisdiction  or
venue of any actions or  proceedings  arising out of or in connection  with this
Agreement brought in the courts referred to above and hereby further irrevocably
waive and agree, not to plead or claim in any such court that any such action or
proceeding has been brought in an inconvenient  forum. The parties further agree
that the mailing by certified or registered mail, return receipt  requested,  of
any process required by any such court shall constitute valid and lawful service
of process  against  them,  without  necessity  for  service by any other  means
provided by statute or rule of court.

                                       15
<PAGE>


          (h)  Further  Assurances.  Each party  hereto  shall do and perform or
               -------------------
cause to be done and  performed  all such  further  acts and  things  and  shall
execute and deliver all such other agreements,  certificates,  instruments,  and
documents as any other party hereto reasonably may request in order to carry out
the  provisions  of this  Agreement  and the  consummation  of the  transactions
contemplated hereby.

          (i)  Modifications;  Amendments;  Waivers. The terms and provisions of
               -----------------------------------
this  Agreement  may not be modified,  amended or waived,  except  pursuant to a
writing signed by the Company and the Investors  provided,  however,  Sections 7
through 11 may be amended  pursuant  to a writing  signed by the Company and the
holders of a majority of the Registrable Shares.

          (j)  Headings.  The headings of the various Sections of this Agreement
               --------
have been inserted for  convenience of reference only and shall not be deemed to
be a part of this Agreement.

          (k)  Waiver.  No  course  of  dealing  between  the  Company  and  the
               ------
Investors  or any delay in  exercising  any rights  hereunder  will operate as a
waiver of any rights of any party to this Agreement. The failure of any party to
enforce any of the provisions of this Agreement will in no way be construed as a
waiver of such provisions and will not affect the right of such party thereafter
to enforce each and every  provision of this  Agreement in  accordance  with its
terms.

                                       16
<PAGE>

          (l)  Mutual  Waiver  of  Jury  Trial.   BECAUSE  DISPUTES  ARISING  IN
               -------------------------------
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN  EXPERIENCED  AND EXPERT  PERSON AND THE PARTIES WISH  APPLICABLE
STATE AND FEDERAL LAWS TO APPLY  (RATHER THAN  ARBITRATION  RULES),  THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE,  TO ACHIEVE THE BEST  COMBINATION  OF THE  BENEFITS  OF THE  JUDICIAL
SYSTEM AND OF  ARBITRATION,  THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY  ACTION,  SUIT OR  PROCEEDING  BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.

                        AMC ENTERTAINMENT INC.


                        By:      /S/ PETER C. BROWN
                                 ----------------------------------------------
                                 Name:    Peter C. Brown
                                 Title:   Chairman of the Board,  President
                                          and Chief Executive Officer

                        APOLLO INVESTMENT FUND IV, L.P.

                        By:      APOLLO ADVISORS IV, L.P.
                                 its general partner

                        By:      Apollo Capital Management IV, Inc.
                                 its general partner

                        By:      /S/ MARC ROWAN
                                 ----------------------------------------------
                                 Name:    Marc Rowan
                                 Title:   Vice President

                        APOLLO OVERSEAS PARTNERS IV, L.P.

                        By:      APOLLO ADVISORS IV, L.P.
                                 its managing general partner

                        By:      Apollo Capital Management IV, Inc.
                                 its general partner

                        By:      /S/ MARC ROWAN
                                 ----------------------------------------------
                                 Name:    Marc Rowan
                                 Title:   Vice President

                                       2
<PAGE>

                        APOLLO INVESTMENT FUND V, L.P.

                        By:      APOLLO ADVISORS V, L.P.
                                 its general partner

                        By:      Apollo Capital Management V, Inc.
                                 its general partner

                        By:      /S/ MARC ROWAN
                                 ----------------------------------------------
                                 Name:    Marc Rowan
                                 Title:   Vice President

                        APOLLO OVERSEAS PARTNERS V, L.P.

                        By:      APOLLO ADVISORS V, L.P.
                                 its managing general partner

                        By:      Apollo Capital Management V, Inc.
                                 its general partner

                        By:      /S/ MARC ROWAN
                                 ----------------------------------------------
                                 Name:    Marc Rowan
                                 Title:   Vice President


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>5
<FILENAME>d25605_ex99-5.txt
<DESCRIPTION>EXHIBIT 99.5
<TEXT>


================================================================================


                              STANDSTILL AGREEMENT


                                  by and among


                             AMC ENTERTAINMENT INC.,


                                       and


                         APOLLO INVESTMENT FUND IV, L.P.


                        APOLLO OVERSEAS PARTNERS IV, L.P.


                         APOLLO INVESTMENT FUND V, L.P.


                        APOLLO OVERSEAS PARTNERS V, L.P.


                           APOLLO MANAGEMENT IV, L.P.


                                       and


                            APOLLO MANAGEMENT V, L.P.



                           Dated as of April 19, 2001



================================================================================

<PAGE>


                              STANDSTILL AGREEMENT

     This STANDSTILL AGREEMENT (this "Agreement") is made and entered into this
19th day of April 2001 by and among (i) AMC ENTERTAINMENT INC., a Delaware
corporation (the "Company"), (ii) APOLLO INVESTMENT FUND IV, L.P., a Delaware
limited partnership ("AIF IV") and APOLLO OVERSEAS PART NERS IV, L.P., a Cayman
Islands exempted limited partnership ("AOP IV") and any other partnership or
entity affiliated with and managed by Apollo over which Apollo exercises
investment authority, including voting and dispositive rights, and to which
either AIF IV or AOP IV assigns their interests under the Investment Agreement
(as hereinafter defined)(collectively, the "Apollo IV Investors"), (iii) APOLLO
IN VESTMENT FUND V, L.P., a Delaware limited partnership ("AIF V") and APOLLO
OVERSEAS PARTNERS V, L.P., a Cayman Islands exempted limited partnership ("AOP
V") and any other partnership or entity affiliated with and managed by Apollo
over which Apollo exercises investment authority, including voting and
dispositive rights, and to which either AIF V or AOP V assigns any of their
respective interests under the Investment Agreement (collectively, the "Apollo V
Investors" and together with the Apollo IV Investors the "Apollo Investors"),
(iv) APOLLO MANAGEMENT IV, L.P., a Delaware limited partnership, in its capacity
as investment manager to the Apollo IV Investors ("Apollo IV Management") and
(v) APOLLO MANAGEMENT V, L.P., a Delaware limited partnership, in its capacity
as investment manager to the Apollo V Investors ("Apollo V Management" and
together with Apollo IV Management and any other Person under common control
with Apollo IV Management or Apollo V Management, "Apollo").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, the Apollo Investors are concurrently with the execution hereof
purchasing from the Company, and the Company is hereby issuing, selling, and
delivering to the Apollo Investors, 92,000 shares of Series A Convertible
Preferred Stock, par value 66 2/3(cent) per share (the "Series A Preferred"),
and 158,000 shares of Series B Exchangeable Preferred Stock, par value 66
2/3(cent) per share (the "Series B Preferred" and, together with the Series A
Preferred, the "Preferred Stock") pursuant to that certain Investment Agreement,
dated as of April 19, 2001, by and among the Company, the Apollo Investors and
Apollo (the "Investment Agreement");

     WHEREAS, as a condition to the consummation of the transactions
contemplated by the Investment Agreement, the parties have agreed to restrict
the

                                        2

<PAGE>


ability of the Apollo Investors and certain of their transferees to acquire or
dispose of securities of the Company as set forth herein;

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

     Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:

     1.1.1 "AIF IV" shall have the meaning set forth in the recitals to this
Agreement.

     1.1.2 "AIF V" shall have the meaning set forth in the recitals to this
Agreement.

     1.1.3 "Affiliate" means, with respect to any Person, (i) any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person; (ii) any other Person that owns,
directly or indirectly, ten percent or more of such Person's capital stock or
other equity interests or any officer or director of any such Person or other
Person or, (iii) with respect to any natural Person, any person having a
relationship with such Person by blood, marriage or adoption not more remote
than first cousin; provided, however, that with respect to Apollo or the Apollo
Investors, the term "Affiliate" shall not include any limited partner of the
Apollo Investors or their Affiliates nor any portfolio or investee companies of
the Apollo Investors or their Affiliates so long as, in any case, (x) Apollo
does not control or have investment authority over such limited partner or
portfolio or investee company; (y) such limited partner or portfolio or investee
company does not operate in the domestic theatrical exhibition industry or
otherwise compete with the Company; and (z) Apollo or its Affiliates do not own,
directly or indirectly, 33% or more of such portfolio or investee company's
capital stock or other equity interests. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have correlative meanings.

                                        3

<PAGE>


     1.1.4 "AOP IV" shall have the meaning set forth in the recitals to this
Agreement.

     1.1.5 "AOP V" shall have the meaning set forth in the recitals to this
Agreement.

     1.1.6 "Apollo" shall have the meaning set forth in the recitals to this
Agreement.

     1.1.7 "Apollo Group" shall mean (a) Apollo, (b) the Apollo Investors, (c)
any Affiliate of Apollo (including but not limited to the Apollo Investors)
controlled by Apollo such that Apollo has the legal or contractual power
(including, without limitation, through negative control or through Apollo's
designees or representatives on the board of directors or other governing body
of such Affiliate or under the articles of incorporation or other constituent
documents of such Affiliate or as a result of the voting rights of any
securities or other instruments issued by such Affiliate) to direct the
investments of such Affiliate or to cause such Affiliate to comply with the
terms of this Agreement, and (d) any Person with whom Apollo or any Person
included in the foregoing clauses (b) or (c) is part of a Group.

     1.1.8 "Apollo Investors" shall have the meaning set forth in the recitals
to this Agreement.

     1.1.9 "Apollo IV Investors" shall have the meaning set forth in the
recitals to this Agreement.

     1.1.10 "Apollo V Investors" shall have the meaning set forth in the
recitals to this Agreement.

     1.1.11 "Associate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act.

     1.1.12 "Beneficially Own" with respect to any securities means having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act, as in effect on the date hereof). The terms "Beneficial
Ownership" and "Beneficial Owner" have correlative meanings.


                                        4

<PAGE>


     1.1.13 "Board" shall mean the Board of Directors of the Company.

     1.1.14 "B Trustees" shall mean Raymond F. Beagle, Jr. and Charles J. Egan,
Jr., as (1) successor trustees of the 1992 Durwood, Inc. Voting Trust dated
December 12, 1992, as amended and restated on August 12, 1997, (2) successor
trustees of the trust created under the Revocable Trust Agreement dated August
14, 1989 of Stanley H. Durwood, as amended and restated on May 12, 1999, and (3)
surviving trustees of the Stanley H. Durwood Foundation, or any successor
trustees of any of the trusts referred to in clauses (1), (2) or (3) above.

     1.1.15 "Certificate of Designations" shall mean the Certificate of Designa
tions for the Series A Preferred and the Series B Preferred, setting forth the
relative rights, preferences and terms of the Preferred Stock, as filed with the
Secretary of State of the State of Delaware.

     1.1.16 "Class B Shares" shall mean the Class B Stock, par value 662/3(cent)
per share, of the Company.

     1.1.17 "Common Stock" means the Company's Common Stock, par value
662/3(cent) per share, and any other class of common stock of the Company that
may be created from time to time.

     1.1.18 "Company" shall have the meaning set forth in the recitals to this
Agreement.

     1.1.19 "Derivative Security" shall mean any subscription, option,
conversion right, warrant, phantom stock right or other agreement, security or
commitment of any kind obligating the Company or any of its Subsidiaries to
issue, grant, deliver or sell, or cause to be issued, granted, delivered or
sold, (i) any Voting Securities or any other equity security of the Company,
(ii) any securities convertible into, or ex changeable for, any Voting
Securities or other equity security of the Company or (iii) any obligations
measured by the price or value of any shares of capital stock of the Company.

     1.1.20 "Disposition" shall have the meaning assigned thereto in Section
5.1.

     1.1.21 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.


                                        5

<PAGE>


     1.1.22 "15% Acquisition" shall have the meaning assigned thereto in Section
4.2.

     1.1.23 "Foundation" shall mean The Stanley H. Durwood Foundation.

     1.1.24 "Group" shall mean any group of Persons who, with respect to those
acquiring, holding, voting or disposing of Voting Securities would, assuming
ownership of the requisite percentage thereof, be required under Section 13(d)
of the Exchange Act and the rules and regulations thereunder to file a statement
on Sched ule 13D with the SEC as a "person" within the meaning of Section
13(d)(3) of the Exchange Act, or who would be considered a "person" for purposes
of Section 13(g)(3) of the Exchange Act. "Group" when used with reference to
standards or tests that are based on securities other than Voting Securities
shall have the foregoing meaning except that the words "Voting Securities" in
the second line of the definition of "Group" shall be replaced with the words
"securities of the Company."

     1.1.25 "Independent Director" shall means a member of the Board (i) who is
not and has never been an officer or employee of the Company, Apollo, the Apollo
Investors or of their respective Affiliates, or of an entity that derived more
than 5% of its revenues or earnings in its most recent fiscal year from
transactions involving the Company, Apollo, the Apollo Investors or any of their
respective Affiliates, (ii) who has no relationship or affiliation or
compensation, consulting or contracting arrangement with the Company, the B
Trustees, the Foundation, Apollo, any of the Apollo Investors or any other
entity such that a reasonable person could regard such director as likely to be
unduly influenced by the Company, the B Trustees, the Foundation, Apollo or the
Apollo Investors and (iii) who is nominated by the Nominating Committee of the
Board in accordance with the procedures set forth in its charter, it being
understood that the Company's existing directors elected by the holders of
Common Stock will be deemed independent for purposes of this provision through
at least the remainder of their current terms, provided, however, if the
provisions set forth in the charter of the Nominating Committee are not then in
effect, then it shall mean a member of the Board considered "independent"
pursuant to the rules of the American Stock Exchange or other exchange on which
the Company's securities are then traded or listed.

     1.1.26 "Investment Agreement" shall have the meaning set forth in the
recitals to this Agreement.

     1.1.27 "Nominating Committee" shall have the meaning set forth in the

                                        6

<PAGE>


Investment Agreement.

     1.1.28 "Other Investor Affiliates" shall have the meaning set forth in
Section 4.1.

     1.1.29 "Permitted Underwriter" shall mean any underwriter who is in the
business of underwriting securities and who, in the ordinary course of its
business as an underwriter, acquires Voting Securities in connection with a
public offering with the bona fide intention of reselling all of the Voting
Securities so acquired pursuant to such public offering.

     1.1.30 "Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting as an individual, fiduciary or other capacity.

     1.1.31 "Preferred Stock" shall mean, collectively, the Series A Preferred
and the Series B Preferred.

     1.1.32 "Purchaser Standstill Agreement" shall have the meaning assigned
thereto in Section 5.1(b)(II).

     1.1.33 "Purchasing Person" shall have the meaning assigned thereto in
Section 5.1(b)(I).

     1.1.34 "Qualifying Tender Offer" shall mean shall mean a tender offer or
similar transaction for all of the outstanding Common Stock of the Company that
is made to all holders of Common Stock and is accepted by holders of a majority
of the Company's outstanding shares of Common Stock not owned by Apollo or its
Affiliates.

     1.1.35 "Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated of even date herewith, by and among the Company and the Apollo
Investors.

     1.1.36 "Requisite Independent Directors" shall mean, at any time of
determination, a majority of the Independent Directors who were elected by the
holders of the Company's Common Stock voting as a class.

     1.1.37 "Securities Act" shall mean the Securities Act of 1933, as amended.

                                        7

<PAGE>


     1.1.38 "Series A Preferred" shall have the meaning set forth in the
recitals to this Agreement.

     1.1.39 "Series B Preferred" shall have the meaning set forth in the
recitals to this Agreement.

     1.1.40 "Standstill Period" shall mean the period commencing on the date
hereof and ending on the fifth anniversary hereof.

     1.1.41 "Total Voting Power" shall mean, calculated at a particular point in
time, the aggregate votes represented by all then outstanding Voting Securities
including, with respect to shares of Preferred Stock outstanding, the number of
votes accorded to the underlying Common Stock into which such Preferred Stock is
convertible (including the Common Stock which would be issued upon conversion of
any shares of Series A Preferred which were, in turn, issued upon conversion of
shares of Series B Preferred).

     1.1.42 "Transaction Documents" shall mean this Agreement, the Investment
Agreement, the Certificate of Designations and the Registration Rights
Agreement.

     1.1.43 "Trust" shall mean, collectively, (i) the 1992 Durwood, Inc. Voting
Trust dated December 12, 1992, as amended and restated on August 12, 1997, (2)
the trust created under the Revocable Trust Agreement dated August 14, 1989 of
Stanley H. Durwood, as amended and restated on May 12, 1999, and (3) the
Foundation.

     1.1.44 "Voting Securities" means the shares of the Company's Common Stock,
the Class B Shares, any other securities of the Company having the general
voting power under ordinary circumstances to elect members of the Board of the
Company, the Preferred Stock, and any other securities which are convertible
into, or exchangeable for, Voting Securities.

     1.1.45 "Voting Power" shall mean, calculated at a particular point in time,
the aggregate votes represented by all the then outstanding Common Stock, the
Class B Shares and any other securities of the Company then entitled to vote
generally in the election of directors of the Company.

                                        8

<PAGE>


                                    ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES
                       OF APOLLO AND THE APOLLO INVESTORS

     Each of Apollo and the Apollo Investors, severally and not jointly, hereby
represents and warrants to the Company as follows:

     Section 2.1 Authority. Each of Apollo and the Apollo Investors has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement. The execution, delivery and performance of this Agreement,
and the consummation by Apollo and the Apollo Investors of the transactions
contemplated hereby, have been duly authorized by all necessary action on the
part of Apollo and the Apollo Investors.

     Section 2.2 Enforceability. This Agreement has been duly executed and
delivered by Apollo and the Apollo Investors and constitutes its legal, valid
and binding obligation enforceable against each of them in accordance with its
terms, except as the same may be limited by the terms of this Agreement or by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.

     Section 2.3 No Conflicts. The execution and delivery of this Agreement by
the Apollo and the Apollo Investors, and the performance by each of them of
their respective obligations hereunder, will not (a) contravene any provision of
the organizational documents of Apollo or the Apollo Investor, (b) violate or
conflict with any material law, statute, ordinance, rule, regulation, decree,
writ, injunction, judgment, ruling or order of any governmental authority or of
any arbitration award which is either applicable to, binding upon, or
enforceable against Apollo or the Apollo Investors; (c) conflict with, result in
any breach of, or constitute a default under, or give rise to a right to
terminate, amend, modify, abandon or accelerate, any material agreement which is
applicable to, binding upon or enforceable against Apollo or the Apollo
Investors, except for such violations or breaches which would not, in the
aggregate, inhibit the ability of Apollo or the Apollo Investors to perform
their respective obligations hereunder; or (d) require the consent, approval,
authoriza tion or permit of, or filing with or notification to, any governmental
authority, any court or tribunal or any other person, except for such approvals,
registrations, declarations, notices and filings, the failures of which to be
made or obtained, would not in the aggregate inhibit the ability of Apollo or
the Apollo Investors to perform

                                        9

<PAGE>


their respective obligations hereunder.

     Section 2.4 Investment Experience. Apollo and each Apollo Investor
understands that the purchase of the Preferred Stock made pursuant to the
Investment Agreement and the agreement to be bound by the provisions hereof
involves risk. Each of Apollo and the Apollo Investors acknowledges that it is
able to fend for itself, can bear the economic risk of its investment in the
Voting Securities owned by it and has such knowledge and experience in financial
or business matters that it is capable of evaluating the merits and risks of its
investment in Voting Securities of the Company and its agreement to be bound
hereby.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES
                                    OF APOLLO

     Apollo hereby represents and warrants to the Company as follows:

     Section 3.1 Control by Apollo. Apollo is the investment manager of, and
possesses the ability to direct the investments of, each Apollo Investor. Apollo
controls the Apollo Investors and has the authority to cause the Apollo
Investors to perform their respective obligations under this Agreement and the
other Transaction Documents. Apollo, in its capacity as investment manager,
general partner or manager of the Apollo Investors, has the requisite power and
has taken all necessary corporate or partnership action required to cause the
Apollo Investors to execute and deliver this Agreement and perform their
respective obligations hereunder.


                                    ARTICLE 4
                           ACQUISITIONS OF SECURITIES
                         AND OTHER RESTRICTED ACTIVITIES

     Section 4.1 Restrictions During the Standstill Period. During the Stand
still Period, unless requested by the Requisite Independent Directors, each of
Apollo and the Apollo Investors shall not, and Apollo shall cause each other
member of the Apollo Group not to, and shall use its reasonable best efforts to
cause any controlling person or general partner of Apollo (the "Other Investor
Affiliates") not to, directly or indirectly, alone or in concert with others:

          (a) acquire, offer or propose to acquire or agree to acquire,

                                       10

<PAGE>


     whether by purchase, tender or exchange offer, through the acquisition of
     control of another Person, by joining a partnership, limited partnership,
     syndicate or other Group or otherwise, Beneficial Ownership of any Voting
     Securities, Derivative Securities or any other securities of the Company or
     any rights to acquire (whether currently, upon lapse of time, following the
     satisfaction of any conditions, upon the occurrence of any event or any
     combination of the foregoing) any Voting Securities, other than:

          (i)  the acquisition by Apollo or a member of the Apollo Group of not
               more than 500,000 Class B Shares or shares of Common Stock from
               the Trust;

          (ii) the acquisition by Apollo or a member of the Apollo Group of debt
               securities of the Company;

          (iii) the acquisition of Voting Securities as a result of any stock
               split, stock dividend (including dividends paid in Additional
               Securities (as such term is defined in the Certificate of Desig
               nations) on the Preferred Stock) or other distributions,
               recapitalizations or offerings made available by the Company to
               holders of a class or series of Voting Securities generally;

          (iv) the acquisition of Preferred Stock pursuant to the Investment
               Agreement (including the Series A Preferred and Common Stock
               issuable upon conversion or exchange of the Preferred Stock, as
               the case may be);

          (v)  the repurchase by any Apollo Investor of any shares of Pre ferred
               Stock from any transferee thereof;

          (vi) the acquisition by Apollo or a member of the Apollo Group of
               Class B Shares or shares of Common Stock owned by the Trust which
               the Trust has determined to sell in circumstances where the
               effect of such sale would be to cause this Agreement to terminate
               pursuant to Section 6.1 of this Agreement; pro vided such
               acquisition is approved by the Requisite Independ ent Directors;
               and

          (vii) subject to the provisions of Section 4.2, the acquisition of

                                       11

<PAGE>


               Voting Securities by Apollo or a member of the Apollo Group
               following a 15% Acquisition.

          (b) propose or take substantial steps to effect (in either case, on
     behalf of itself or to or with a third party) any merger, business
     combination, restructuring, recapitalization or similar transaction
     involving the Company or any of its Subsidiaries or the sale or other
     disposition outside the ordinary course of business of any material portion
     of the assets of the Company or any of its Subsidiaries; provided, however,
     that nothing set forth in this clause (b) will prohibit Apollo's activities
     acting together with the Chief Executive Officer of the Company in
     connection with possible acquisitions and disposi tions within parameters
     previously discussed with, and approved by, the Company's Board from time
     to time;

          (c) seek election to, seek to place a representative on, or seek the
     removal of any member of, the Board, except pursuant to the rights granted
     to the holders of Preferred Stock in the Certificates of Designations
     therefor;

          (d) engage in any "solicitation" (within the meaning of Rule 14a-1
     under the Exchange Act) of proxies or consents (whether or not relating to
     the election or removal of directors) with respect to the Company, or
     become a participant in any election contest or, unless first approved by
     the Requisite Independent Directors, execute any written consent in lieu of
     a meeting of the holders of any class of Voting Securities that is
     solicited by or on behalf of any shareholder of the Company;

          (e) unless first approved by the Requisite Independent Directors,
     initiate, propose or otherwise solicit shareholders for the approval of any
     shareholder proposal (as described in Rule 14a-8 under the Exchange Act or
     otherwise) with respect to the Company;

          (f) form, join or in any way participate in or assist in the forma
     tion of a Group with respect to any Voting Securities (other than, with
     respect to Apollo, any such "group" consisting exclusively of Apollo and
     its con trolled Affiliates) or, in the case of Apollo or any member of the
     Apollo Group, enter into any agreement with any Person limiting Apollo's
     discretion with respect to the exercise of the Preferred Stock Approval
     Rights granted under the Investment Agreement;

                                       12

<PAGE>


          (g) deposit any Voting Securities in a voting trust or subject any
     Voting Securities to any arrangement or agreement with respect to the
     voting of such Voting Securities, except for any voting trust or
     arrangement or agreement with respect to the voting of such Voting
     Securities with an Affiliate of Apollo or the Apollo Investors;

          (h) otherwise act, alone or in concert with others, in a manner
     designed or having the deliberate effect of circumventing the restrictions
     otherwise imposed hereunder;

          (j) disclose or publicly announce any intention, plan or arrange ment
     inconsistent with the foregoing; or

          (k) except as otherwise permitted by this Agreement, finance any other
     Persons in connection with any of the activities prohibited by the
     foregoing clauses (a) through (j);

provided that nothing in this Section 4.1 shall (I) prohibit any individual who
is serving as a Director of the Company, solely in his or her capacity as such
Director, from taking any action or making any statement which, in such
Director's best judgment, is in the best interests of the Company's
stockholders, or (II) restrict any disclosure or statements required to be made
by Apollo or any Apollo Investor under applicable law to the extent any such
requirement does not arise from actions by Apollo or such Apollo Investor
inconsistent with this Agreement.

     Section 4.2 Restrictions After the Standstill Period. After the earlier to
occur of (i) expiration of the Standstill Period and (ii) the date on which any
Person (other than the Trust, the Apollo Investors or their respective
Affiliates) acquires shares of Common Stock or Class B Shares and, after giving
effect to such acquisi tion, such Person Beneficially Owns Voting Securities
representing more than 15% of the Voting Power (any such event, a "15%
Acquisition"), and continuing until the date of termination of this Agreement,
each of Apollo and the Apollo Investors shall not, and Apollo shall cause each
other member of the Apollo Group not to, and shall use its reasonable best
efforts to cause Other Investor Affiliates not to, directly or indirectly, alone
or in concert with others, take any action of the type described in clause (a)
of Section 4.1, except that:

          (a) Apollo or a member of the Apollo Group may purchase, or offer to
     purchase, additional Voting Securities pursuant to a Qualifying

                                       13

<PAGE>


     Tender Offer; and

          (b) Apollo or a member of the Apollo Group may propose a merger,
     business combination, restructuring, recapitalization or similar
     transaction involving the Company if such transaction is contingent upon
     approval of the holders of a majority of the Company's outstanding shares
     of Common Stock not owned by Apollo or its Affiliates (or, if such
     transaction is effected pursuant to a tender offer, such transaction is
     effected in a Qualify ing Tender Offer).


                                    ARTICLE 5
                        DISPOSITIONS OF VOTING SECURITIES

     Section 5.1 Restrictions on Disposition. Each of Apollo and the Apollo
Investors shall not, and Apollo shall cause each other member of the Apollo
Group not to, and shall use its reasonable best efforts to cause Other Investor
Affiliates not to, directly or indirectly (including, without limitation,
through the disposition or transfer of any equity interest in another Person),
alone or in concert with others, sell, assign, transfer, pledge, hypothecate,
grant any option with respect to or otherwise dispose of any interest in (or
enter into an agreement or understanding with respect to the foregoing) any
Voting Securities (a "Disposition"), except as set forth below in this Section
5.1.

          (a) Dispositions may be made by Apollo or any Apollo Investor to any
     Affiliate satisfying the qualifications of clause (c) in the definition of
     "Apollo Group", provided, that any such Affiliate at all times continues to
     meet the qualifications of such clause (c), and provided further that any
     such Affiliate shall agree in writing to be bound by this Agreement.

          (b) Dispositions of Voting Securities may be made by an Apollo
     Investor to Persons other than members of the Apollo Group and Other
     Investor Affiliates pursuant to (i) a public offering effected in
     accordance with the Registration Rights Agreement and effecting a broad
     distribution of such Voting Securities offered, (ii) sales permitted by the
     provisions of Rule 144 or Section 4(1) of the Securities Act, each as
     currently in effect, or (iii) in privately-negotiated transactions;
     provided, however, that

               (I) Dispositions shall not be made pursuant to clauses (i),


                                       14

<PAGE>


          (ii), or (iii) of this Section 5.1(b) if any Person (other than a
          Permitted Underwriter) to whom the Disposition in question is made
          would, after giving effect to such Disposition, together with such
          Person's Affiliates and Associates and the members of any Group
          existing with respect to Voting Securities of which such Person is a
          part (any such Person and its Affiliates, Associates and Group members
          being collectively referred to herein as a "Purchasing Person"),
          Benefi cially Own Voting Securities representing more than 15% of the
          Total Voting Power then outstanding.

               (II) Notwithstanding the provisions of the immediately preceding
          paragraph, a Disposition resulting in a Purchasing Person Beneficially
          Owning Voting Securities representing more than 15% of the Total
          Voting Power may be effected if (x) such Disposition has been approved
          by the Requisite Independent Directors and (y) such Purchasing Person
          (including each member of any Group, if such Purchasing Person is not
          an individual shareholder) shall have exe cuted and delivered to the
          Company a written agreement (in form and substance reasonably
          satisfactory to the Company) pursuant to which such Purchasing Person
          agrees to be bound by this Agreement to the same extent as Apollo as
          if references to Apollo herein were to such Purchasing Person (any
          such agreement, a "Purchaser Standstill Agreement").

          (c) Dispositions may be made pursuant to a tender offer, exchange
     offer, merger, business combination or similar transaction for at least 51%
     of the outstanding Voting Securities if:

               (I) in the case of any tender offer, exchange offer, merger,
          business combination or similar transaction in which Apollo, any
          member of the Apollo Group or any Apollo Investor (1) purchases or
          acquires additional Voting Securities, (2) retains any Voting Securi
          ties or (3) if any such party owns shares of Common Stock before such
          transaction, receives additional or different consideration for any
          such shares of Common Stock than the consideration received by the
          other holders of the Company's Common Stock, such tender offer,
          exchange offer, merger, business combination or similar transaction
          has been approved by the holders of a majority of the Company's
          outstanding shares of Common Stock and Class B Shares not owned


                                       15
<PAGE>


          by Apollo, any member of the Apollo Group or any Apollo Investor; or

               (II) in the case of any tender offer, exchange offer, merger,
          business combination or similar transaction not of the type described
          in clause (I), such tender offer, exchange offer, merger, business
          combination or similar transaction has been approved by the Requisite
          Independent Directors.

          (d) Each of Apollo and the Apollo Investors shall, and Apollo shall
     cause each other member of the Apollo Group to, and shall use its
     reasonable best efforts to cause Other Investor Affiliates to, give the Com
     pany written notice after effecting a Disposition in accordance with this
     Section 5.1.

          Section 5.2 Restrictions on Conversion of Series A Preferred.


          (a) During the Standstill Period, the Apollo Investors shall not, and
     Apollo shall cause each member of the Apollo Group not to, and shall use
     its reasonable best efforts to cause Other Investor Affiliates not to,
     convert any shares of Series A Preferred into Common Stock, except in
     connection with a Disposition effected pursuant to paragraph (b) below.

          (b) If, at any time during the Standstill Period, any Apollo Inves
     tor, any member of the Apollo Group or any Other Investor Affiliate desires
     to effect a Disposition of any shares of Series A Preferred to any Person
     other than members of the Apollo Group and Other Investor Affiliates, such
     party may, as part of such Disposition, elect to convert such shares of
     Series A Preferred into Common Stock prior to transfer to such purchasing
     Person. In order to convert shares of Preferred Stock to effect any such
     Disposition, the selling Apollo Investor, member of the Apollo Group or
     Other Investor Affiliate shall deliver the Company, on or before the
     proposed settlement date of such Disposition, written notice of its
     intention to convert Series A Pre ferred as part of a Disposition (a
     "Disposition Notice"). The Disposition Notice shall set forth the number of
     shares of Series A Preferred that shall be converted into Common Stock, the
     sale price for such shares and the purchas ing Person in whose name the
     Common Stock shall be registered. Upon surrender by the selling Apollo
     Investor, member of the Apollo Group or Other Investor Affiliate of
     certificates representing the shares of Series A

                                       16

<PAGE>


     Preferred that are being converted as part of such Disposition, the Company
     shall issue to the purchasing Person certificates representing the
     appropriate number of shares of Common Stock. Any Disposition pursuant to a
     third party made under this Section 5.2(b) shall comply with the provisions
     of Section 5.1 hereof, including Section 5.1 (b) (II).

     Section 5.3 Disposition of Class B Shares. In the event Apollo, any Apollo
Investor or any other member of the Apollo Group acquires any Class B Shares,
Apollo shall not, and shall cause each Apollo Investor or member of the Apollo
Group not to, sell, assign, pledge or otherwise transfer such Class B Shares to
any third party (other than transfers by Apollo to an Affiliate satisfying the
qualifica tions of clause (c) in the definition of "Apollo Group") unless such
Class B Shares are first converted into Common Stock in accordance with the
provisions provided therefor in the Company's Certificate of Incorporation.


                                    ARTICLE 6
                                   TERMINATION

     Section 6.1 Termination. This Agreement shall terminate on earliest to
occur of:

          (a) the tenth anniversary hereof;

          (b) the date that any Person (other than Apollo or any member of the
     Apollo Group or any of their respective Affiliates or any Person approved
     by a majority of the Company's Board (including at least one designee of
     the Series A Preferred)) acquires or enters into an agreement to acquire
     Class B Shares or shares of Common Stock if, after giving effect to such
     acquisition, such Person Beneficially Owns Voting Securities representing
     more than 20% of the Voting Power of the Company, unless such Person has
     entered into a Purchaser Standstill Agreement in connection with such
     acquisition.

          (c) the termination of this Agreement in writing by the Company with
     the approval of the Requisite Independent Directors.

If the potential acquisition of shares by a Person which caused the termination
of this Agreement pursuant to Section 6.1 (b) is not consummated for any reason
within 60 days of such agreement to acquire having been entered into (or until
the date such

                                       17

<PAGE>


Person ceases to actively attempt to acquire such shares pursuant to such
agreement), Apollo and the Apollo Investors agree that (i) all of the provisions
of this Agreement will be binding upon each of them from and after such date
with full force and effect as if such termination had never occurred and (ii)
each of them will vote all of the shares of capital stock of the Company
acquired by them during such 60 day period pro rata in accordance with the votes
(other than Apollo, the members of the Apollo Group, and their respective
Affiliates) of the holders of securities of the same class on all matters
submitted for the vote of such holders until any subsequent termination of this
Agreement in accordance with Section 6.1 hereof.

     Section 6.2 Effect of Termination.

          (a) If this Agreement is terminated in accordance with Section 6.1,
     hereof, this Agreement shall become null and void and of no further force
     and effect, except that (i) the terms and provisions of this Section 6.2
     and Sections 7.4, 7.5, 7.6, 7.7, 7.10 and 7.11 shall remain in full force
     and effect, (ii) if this Agreement is terminated in accordance with Section
     6.1(b) hereof, Article V and Section 7.8 shall remain in full force and
     effect, and (iii) any termination of this Agreement shall not relieve any
     party hereto from any liability for any breach of its obligations
     hereunder, regardless of whether such party terminated this Agreement.

          (b) The Company agrees to notify Apollo promptly upon it having
     knowledge that the Trust has made a determination to sell, and has
     identified a potential purchaser to buy, Class B Shares or shares of Common
     Stock.


                                    ARTICLE 7
                                  MISCELLANEOUS

     Section 7.1 Survival. The representations, warranties, covenants and
agreements contained in or made pursuant to this Agreement shall survive the
execution of this Agreement.

     Section 7.2 Best Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereby agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws, rules and
regulations to consummate and


                                       18

<PAGE>


make effective the transactions contemplated by this Agreement, including using
its best efforts to obtain all necessary waivers, consents and approvals. In
case at any time after the execution of this Agreement, further action is
necessary or desirable to carry out the purposes of this Agreement, the parties
shall cause their proper officers or directors to take all such necessary
action.

     Section 7.3 Legend. Each of the parties hereto acknowledges that the
certificates representing shares of Preferred Stock purchased by pursuant to the
Investment Agreement shall be subject to stop transfer restrictions, and shall
contain a legend substantially as set forth below (except that the first
sentence of such legend shall not be placed on any shares of Common Stock
issuable upon conversion of Series A Preferred that have been registered under
the Securities Act or if, in the opinion of counsel, such sentence is not
required under the Securities Act):

     "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
     TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
     ACT COVERING SUCH SECURITIES OR THE SECURITIES ARE SOLD AND TRANSFERRED IN
     A TRANSACTION THAT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
     REQUIREMENTS OF SUCH ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
     ARE SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER SET FORTH IN A STANDSTILL
     AGREEMENT DATED AS OF APRIL 19, 2001 BETWEEN AMC ENTERTAINMENT INC. AND
     CERTAIN OTHER INVESTORS NAMED THEREIN, COPIES OF WHICH ARE ON FILE WITH THE
     SECRETARY OF AMC ENTERTAINMENT INC."


     Section 7.4 Notices. All notices, requests, consents and other communica
tions hereunder to any party shall be deemed to be sufficient if contained in a
written instrument and shall be deemed to have been duly given when delivered in
person, by telecopy, by nationally-recognized overnight courier, or by first
class registered or certified mail, postage prepaid, addressed to such party at
the address set forth below or such other address as may hereafter be designated
in writing by the addressee to the addressor.

     (a) If to the Company, to:


                                       19

<PAGE>


         AMC Entertainment Inc.
         106 West 14th Street
         Kansas City, Missouri 64105
         Attention:  Peter C. Brown
         Facsimile:  816-480-2517

         With a copy to:

         Lathrop & Gage L.C.
         2345 Grand Blvd.
         Suite 2800
         Kansas City, Missouri 64108
         Attention: Raymond F. Beagle, Jr.
         Facsimile:  816-292-2001

         and

         Skadden, Arps, Slate, Meagher & Flom LLP
         Four Times Square
         New York, New York 10036
         Attention: Eileen T. Nugent
         Facsimile: 212-735-2000

     (b) If to Apollo or to any Apollo Investor, to:

         c/o Apollo Management, L.P.
         1301 Avenue of the Americas
         38th Floor
         New York, NY 10019
         Attention: Marc Rowan
         Facsimile: 212-515-3262

         With a copy to:

         Akin, Gump, Straus, Hauer & Feld, L.L.P.
         1333 New Hampshire Avenue, N.W.
         Washington, D.C. 20036
         Attention:  Bruce S. Mendelsohn
         Facsimile:  202-887-4288


                                       20

<PAGE>


          (c) If to any other Investor or to any other holder of capital stock
     of the Company, addressed to such holder at the address of such holder in
     the record books of the Company; or to such other address or addresses as
     shall be desig nated in writing. All notices shall be effective when
     received.

     Section 7.5 Specific Performance. Each party hereto acknowledges that, in
view of the uniqueness of the transactions contemplated by this Agreement, the
other party would not have an adequate remedy at law for money damages in the
event that this Agreement has not been performed in accordance with its terms.
Each party therefore agrees that the other party shall be entitled to specific
enforcement of the terms hereof in addition to any other remedy to which it may
be entitled, at law or in equity.

     Section 7.6 Severability. If any provision of this Agreement is determined
to be invalid, illegal, or unenforceable, the remaining provisions of this
Agreement shall remain in full force and effect. To the extent permitted by law,
the parties hereby to the same extent waive any provision of law that renders
any provision hereof prohibited or unenforceable in any respect.

     Section 7.7 Entire Agreement; Amendment. This Agreement and the Investment
Agreement (together with all the annexes or exhibits thereto) set forth the
entire agreement between the parties hereto with respect to the matters provided
herein and therein. The provisions of this Agreement govern the subject matter
set forth herein and, except as set forth herein, no provision in this Agreement
shall prevent the exercise of the rights, privileges and preferences of or the
performance of the obligations of Apollo or the Apollo Investors provided under
the Certificate of Designations, Registration Rights Agreement and the
Investment Agreement. Any provision of this Agreement may be amended, modified
or waived in whole or in part at any time by an agreement in writing among the
parties hereto executed in the same manner as this Agreement. With respect to
the Company, approval of any amendment, modification or waiver will be given and
effective only upon approval by the Requisite Independent Directors. No failure
on the part of any party to exercise, and no delay in exercising, any right
shall operate as waiver thereof, nor shall any single or partial exercise by
either party of any right preclude any other or future exercise thereof or the
exercise of any other right.

     Section 7.8 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of each of the parties hereto.


                                       21

<PAGE>


     Section 7.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same document.

     Section 7.10 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and interpreted, in accordance with, the laws of the State
of New York, without regard to conflicts of laws. The parties hereto irrevocably
(a) submit to the exclusive personal jurisdiction of any state or federal court
located in the City of New York in the State of New York in any suit, action or
other legal proceeding relating to this Agreement; (b) agree that all claims in
respect of any such suit, action or other legal proceeding may be heard and
determined in, and enforced in and by, any such court; and (c) waive any
objection that they may now or hereafter have to venue in any such court or that
such court is an inconvenient forum.

     Section 7.11 Remedies; Waiver. To the extent permitted by applicable law,
all rights and remedies existing under this Agreement and any related agreements
or documents are cumulative to, and are exclusive of, any rights or remedies
otherwise available under applicable law. No failure on the part of any party to
exercise, or delay in exercising, any right hereunder shall be deemed a waiver
thereof, nor shall any single or partial exercise preclude any further or other
exercise of such or any other right.


                                       22

<PAGE>


     IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.


                                     AMC ENTERTAINMENT INC.

                                     By: /S/ PETER C. BROWN
                                        ---------------------------------------
                                         Name:  Peter C. Brown
                                         Title: Chief Executive Officer


                                     APOLLO MANAGEMENT IV, L.P.

                                         By:  AIF Management, Inc.,
                                              its General Partner

                                     By: /S/ MARC ROWAN
                                        ---------------------------------------
                                         Name:  Marc Rowan
                                         Title: Vice President


                                     APOLLO MANAGEMENT V, L.P.

                                         By:  AIF Management, Inc.,
                                              its General Partner

                                     By: /S/ MARC ROWAN
                                        ---------------------------------------
                                        Name:  Marc Rowan
                                        Title: Vice President


                                       23

<PAGE>



                                     APOLLO INVESTMENT FUND IV, L.P.

                                         By:  APOLLO ADVISORS IV, L.P.
                                              its general partner

                                         By:  Apollo Capital Management IV, Inc.
                                              its general partner

                                         By: /S/ MARC ROWAN
                                             ----------------------------------
                                             Name:  Marc Rowan
                                             Title: Vice President

                                     APOLLO OVERSEAS PARTNERS IV, L.P.

                                         By:  APOLLO ADVISORS IV, L.P.
                                              its general partner

                                         By:  Apollo Capital Management IV, Inc.
                                              its general partner

                                         By: /S/ MARC ROWAN
                                             ----------------------------------
                                              Name:  Marc Rowan
                                              Title: Vice President

                                     APOLLO INVESTMENT FUND V, L.P.

                                         By:  APOLLO ADVISORS IV, L.P.
                                              its general partner

                                         By:  Apollo Capital Management IV, Inc.
                                              its general partner

                                         By: /S/ MARC ROWAN
                                             ----------------------------------
                                             Name:  Marc Rowan
                                             Title: Vice President



                                                   24

<PAGE>


                                     APOLLO OVERSEAS PARTNERS V, L.P.

                                         By:  APOLLO ADVISORS IV, L.P.
                                              its general partner

                                         By:  Apollo Capital Management IV, Inc.
                                              its general partner

                                         By: /S/ MARC ROWAN
                                             ----------------------------------
                                              Name:  Marc Rowan
                                              Title: Vice President


                                       25




</TEXT>
</DOCUMENT>
</SUBMISSION>
