Exhibit 10.4


 


UNITED STATES
DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK


 


	
   

  	
  )

  	
   

  
	
  UNITED
  STATES OF AMERICA,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  and

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  STATE
  OF ILLINOIS

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  and

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  STATE
  OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  and

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COMMONWEALTH
  OF MASSACHUSETTS,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Plaintiffs,

  	
  )

  	
   

  
	
   

  	
  )

  	
  Civil
  Action No.

  
	
  v.

  	
  )

  	
   

  
	
   

  	
  )

  	
  Filed:

  
	
   

  	
  )

  	
   

  
	
  MARQUEE
  HOLDINGS, INC.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  and

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  LCE
  HOLDINGS, INC.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Defendants.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  



 


HOLD
SEPARATE STIPULATION AND ORDER


 


It is hereby stipulated by and between the undersigned parties, subject
to approval and entry by this Court, that:


 





















 


I.


 


DEFINITIONS


 


As used in this Hold Separate and Stipulation Order:


 


A.                                   “Acquirer” or “Acquirers” means the entity or
entities to whom AMC and Loews divest the Theatre Assets.


 


B.                                     “AMC” means defendant Marquee Holdings, Inc.,
a Delaware corporation with its headquarters in Kansas City, Missouri, its
successors and assigns, and its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures, and their directors, officers, managers,
agents, and employees.


 


C.                                     “Loews” means defendant LCE Holdings, Inc.,
a Delaware corporation with its headquarters in New York City, New York, its
successors and assigns, and its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures, and their directors, officers, managers,
agents, and employees.


 


D.                                    “Theatre Assets” means the first-run,
commercial motion picture theatre businesses operated by AMC and Loews under
the following names and at the following locations:


 


	
  Theatre
  Name

  	
   

  	
  Theatre Address

  
	
  City
  North 14

  	
   

  	
  2600
  N. Western Ave.

  Chicago, IL

  
	
  Fenway
  13

  	
   

  	
  201
  Brookline Ave.

  Boston, MA

  
	
  Meridian
  16

  	
   

  	
  1501
  7th Ave.

  Seattle, WA

  
	
  Webster
  Place 11

  	
   

  	
  1471
  W. Webster Avenue

  Chicago, IL

  
	
  E-Walk
  13

  	
   

  	
  247
  W. 42nd St.

  New York, NY

  
	
  Keystone
  Park 16

  	
   

  	
  13933
  N. Central Expressway

  Dallas, TX

  



 


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and
includes:


 


1.                                       All tangible assets that comprise the
first-run, commercial motion picture theatre business including all equipment,
fixed assets and fixtures, personal property, inventory, office furniture,
materials, supplies, and other tangible property and all assets used in
connection with the Theatre Assets; all licenses, permits and authorizations
issued by any governmental organization relating to the Theatre Assets; all
contracts, agreements, leases, commitments, certifications, and understandings,
relating to the Theatre Assets, including supply agreements; all customer
lists, contracts, accounts, and credit records; all repair and performance
records and all other records relating to the Theatre Assets;


 


2.                                       All intangible assets used in the
development, production, servicing and sale of Theatre Assets, including, but
not limited to all licenses and sublicenses, intellectual property, technical
information, computer software (except defendants’ proprietary software) and
related documentation, know-how, drawings, blueprints, designs, specifications
for materials, specifications for parts and devices, quality assurance and
control procedures, all technical manuals and information defendants provide to
their own employees, customers, suppliers, agents or licensees, and all
research data relating to the Theatre Assets. Provided however, that


 


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this term does not
include (a) any right to use or interest in defendants’ copyrights,
trademarks, trade names, service marks or service names, or (b) assets
that the defendants do not own and are not legally able to transfer.


 


II.


 


OBJECTIVES


 


The Final Judgment filed in this civil action is meant to ensure the
Defendants’ prompt divestiture of the Theatre Assets for the purpose of
establishing viable competitors in the exhibition of first-run, commercial
motion pictures in order to remedy the effects that the United States alleges would
otherwise result from AMC’s acquisition of Loews. This Hold Separate
Stipulation and Order ensures, prior to such divestiture[s], that the Theatre
Assets will remain economically viable and ongoing business concerns and that
competition in the various markets in which these theatres are located is
maintained and not diminished during the pendency of the ordered
divestiture[s].


 


III.


 


JURISDICTION
AND VENUE


 


This Court has jurisdiction over the subject matter of this action and
over each of the parties hereto, and venue of this action is proper in the
United States District Court for the Southern District of New York.


 


IV.


 


COMPLIANCE
WITH AND ENTRY OF FINAL JUDGMENT


 


A.                                   The parties stipulate that a Final Judgment
in the form hereto attached as Exhibit A, may be filed with and entered by
this Court, upon the motion of any party or upon this Court’s


 


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own motion, at any time
after compliance with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. § 16, and without further notice to any party or
other proceedings, provided that the United States has not withdrawn its
consent, which it may do at any time before the entry of the proposed Final
Judgment by serving notice thereof on Defendants and by filing that notice with
this Court.


 


B.                                     Defendants shall abide by and comply with the
provisions of the proposed Final Judgment, pending the entry of the Final
Judgment by this Court, or until expiration of time for all appeals of any
court ruling declining entry of the proposed Final Judgment. From the date of the
signing of this Hold Separate Stipulation and Order by the parties, the
Defendants shall comply with all the terms and provisions of the proposed Final
Judgment as though the same were in full force and effect as an order of this
Court.


 


C.                                     Defendants shall not consummate the
transaction sought to be enjoined by the Complaint herein before the Court has
signed this Hold Separate Stipulation and Order.


 


D.                                    This Hold Separate Stipulation and Order
shall apply with equal force and effect to any amended proposed Final Judgment
agreed upon in writing by the parties and submitted to this Court.


 


E.                                      In the event that (1) the proposed Final
Judgment is not entered pursuant to this Hold Separate Stipulation and Order,
the time has expired for all appeals of any court ruling declining entry of the
proposed Final Judgment, and this Court has not otherwise ordered continued
compliance with the terms and provisions of the proposed Final Judgment, or (2) the
United States has withdrawn its consent, as provided in Section IV.A
above, then the parties are released from all further obligations under this
Hold Separate Stipulation and Order, and the


 


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making of this Hold
Separate Stipulation and Order shall be without prejudice to any party in this
or any other proceeding.


 


F.                                      Defendants represent that the divestiture[s]
ordered in the proposed Final Judgment can and will be made, and that the
Defendants will later raise no claim of mistake, hardship, or difficulty of
compliance as grounds for asking this Court to modify any of the provisions
contained therein.


 


V.


 


HOLD
SEPARATE PROVISIONS


 


Until each divestiture required by the Final Judgment has been accomplished:


 


A.                                   Defendants shall, except as is necessary to
carry out their obligations under this Hold Separate Stipulation and Order and
the proposed Final Judgment, or to comply with other legal obligations, take
all steps necessary to ensure that the Theatre Assets will be maintained and
operated as ongoing, economically viable and active competitors in the
exhibition of first-run, commercial motion pictures. Defendants shall maintain
the viability, marketability, and competitiveness of the Theatre Assets, and
shall not cause the wasting or deterioration of the Theatre Assets, nor shall
they cause the Theatre Assets to be operated in a manner inconsistent with
applicable laws, nor shall they sell, transfer, encumber, or otherwise impair
the viability, marketability or competitiveness of the Theatre Assets.
Defendants shall conduct the business of the Theatre Assets in the regular and
ordinary course and in accordance with past practice, except as otherwise
approved by the United States, and shall use their best efforts to preserve the
existing relationships with suppliers, customers, employees, and others having
business relations with the Theatre Assets. Defendants shall use their best
efforts to keep the organization and


 


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properties of each of the
Theatre Assets intact, including current business operations, physical
facilities, and working conditions. Within twenty (20) days after the entry of
the Hold Separate Stipulation and Order, the Defendants will inform the United
States of the steps taken to comply with the Hold Separate Stipulation and
Order and shall provide to the United States and to the State of Illinois,
State of New York, and Commonwealth of Massachusetts, as appropriate,
sufficient and periodic data and reports on an ongoing basis such that the
plaintiffs are able to monitor the performance of the Theatre Assets prior to
divestiture. The United States, in its sole discretion, after consultation with
the State of Illinois, State of New York, and Commonwealth of Massachusetts, as
appropriate, shall determine the frequency and sufficiency of the data and
reports.


 


B.                                     Defendants shall use all reasonable efforts
to maintain and increase the sales, and revenue of the Theatre Assets, and
shall maintain research, design, product and service improvement, promotional,
advertising, sales, technical assistance, marketing, and merchandising support
for the Theatre Assets at 2005 or previously approved 2006 levels, whichever
are higher.


 


C.                                     Defendants shall provide sufficient working
capital and lines and sources of credit to continue to maintain the Theatre
Assets as economically viable and competitive, ongoing businesses, consistent
with the requirements of Sections V.A and V.B.


 


D.                                    Defendants shall take all steps necessary to
ensure that the Theatre Assets are fully maintained in operable condition at no
less than current capacity, and shall maintain and adhere to normal product and
service improvement, upgrade, repair, and maintenance schedules for the Theatre
Assets.


 


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E.                                      Defendants shall not, except as part of a
divestiture approved by the United States in accordance with the terms of the
proposed Final Judgment, remove, sell, lease, assign, transfer, pledge, or
otherwise dispose of any of the Theatre Assets.


 


F.                                      Defendants shall maintain, in accordance with
sound accounting principles, separate, accurate and complete financial ledgers,
books, and records that report on a periodic basis, such as the last business
day of every month, consistent with past practices, the assets, liabilities,
expenses, revenues, and income of the Theatre Assets.


 


G.                                     Defendants shall take no action that would
jeopardize, delay, or impede the sale of the Theatre Assets.


 


H.                                    Defendants shall not hire, transfer,
terminate, or reduce the salary agreements of any employee whose primary
responsibilities relate to the Theatre Assets, except for transfer bids
initiated by employees pursuant to the Defendants’ regular, established
job-posting policy or as is otherwise consistent with this Hold Separate
Stipulation and Order. Defendants shall provide the United States with ten (10) calendar
days notice of any such transfer.


 


I.                                         Within ten (10) days of the entry of
this Hold Separate Stipulation and Order the Defendants shall appoint, subject
to the approval of the United States, a person or persons to oversee the
Theatre Assets, respectively, who will also be responsible for the Defendants’
compliance with this section. This person or persons shall have complete
managerial responsibility for the Theatre Assets, respectively, subject to the
provisions of the Final Judgment. This person shall take all reasonable steps
to ensure that operational information and competitively sensitive information
regarding the Theatre Assets is held separate from AMC’s current operations,
and not distributed to anyone with operational authority over theatres that


 


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compete with the Theatre
Assets. In the event that any such person is unable to perform his or her
duties the Defendants shall appoint, subject to the approval of the United
States, a replacement within ten (10) working days. Should the Defendants
fail to appoint a replacement acceptable to the United States within this time
period, the United States shall appoint a replacement.


 


J.                                        Defendants shall take no action that would
interfere with the ability of any trustee appointed pursuant to the Final
Judgment to complete the divestiture[s] required by the Final Judgment to
Acquirers acceptable to the United States.


 


K.                                    This Hold Separate Stipulation and Order
shall remain in effect until consummation of the divestiture[s] required by the
proposed Final Judgment or until further order of the Court.


 


ORDER


 


It
is SO ORDERED this       day of        200  .


 


	
   

  	
   

  	
   

  
	
   

  	
  United States District Judge

  



 


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Respectfully submitted,


FOR PLAINTIFF UNITED STATES


OF AMERICA:


 


 


	
  /s/ William H. Jones II

  	
   

  
	
  William
  H. Jones II (WJ 2563)

  Allen P. Grunes (AG 4775)

  Gregg I. Malawer (GM 6467)

  Avery W. Gardiner (AG 2011)

  Joan Hogan (JH 5666)

  



 


Attorneys


 


Bernard M. Hollander (BH 0818)


 


Senior Trial Attorney


 


U.S. Department of Justice


Antitrust Division


Litigation III Section


325 Seventh Street, N.W., Suite 300


Washington, D.C. 20530


Tel: (202) 514-0230


Fax: (202) 307-9952


 


Dated:
December 20, 2005.


 


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FOR PLAINTIFF STATE OF
NEW YORK:

Eliot Spitzer, Attorney General


 


 


	
  /s/ Jay L. Himes

  	
   

  
	
  By: Jay L. Himes (JH
  7714)

  Chief, Antitrust Bureau

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Richard E. Grimm

  	
   

  
	
  Richard E. Grimm (RG
  6891)

  Assistant Attorney General

  	
   

  
	
   

  	
   

  
	
  Antitrust
  Bureau

  	
   

  
	
  Office
  of the Attorney General

  	
   

  
	
  120
  Broadway, Room 26C62

  	
   

  
	
  New
  York, New York 10271-0332

  	
   

  
	
  Tel:
  (212) 416-8282, (212) 416-8280

  	
   

  
	
  Fax:(212)
  416-6015

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  FOR
  PLAINTIFF STATE OF ILLINOIS:

  	
   

  
	
  Lisa
  Madigan, Attorney General

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robert W. Pratt

  	
   

  
	
  By:
  Robert W. Pratt (RP 7924)

  	
   

  
	
  Chief,
  Antitrust Bureau

  	
   

  
	
  Office
  of the Attorney General

  	
   

  
	
  State
  of Illinois

  	
   

  
	
  100
  West Randolph Street

  	
   

  
	
  13th
  Floor

  	
   

  
	
  Chicago,
  Illinois 60601

  	
   

  
	
  (312)
  814-3722

  	
   

  
	
   

  	
   

  
	
  Kavita
  Puri

  	
   

  
	
  Assistant
  Attorney General

  	
   

  
	
  OF
  COUNSEL

  	
   

  



 





















 


FOR PLAINTIFF
COMMONWEALTH OF MASSACHUSETTS


Thomas F. Reilly,
Attorney General


 


 


	
  /s/
  Jeffrey S. Shapiro

  	
   

  
	
  By: Jeffrey S. Shapiro
  (JS 5521)

  Mary B. Freeley (MF 1359)

  Assistant Attorneys General

  Office of the Attorney General

  Commonwealth of Massachusetts

  One Ashburton Place

  Boston, MA 02108

  (617) 727-2200

  



 





















 


FOR DEFENDANT AMC:


 


 


	
  /s/ Ilene Knable Gotts

  	
   

  
	
  Ilene
  Knable Gotts (NY Bar 2797181)

  Damian G. Didden (NY Bar 4163408)

  Wachtell, Lipton, Rosen & Katz

  51 West 52nd Street

  New York, NY 10019

  Tel: (212) 403-1113

  Fax:(212) 403-2113

  



 





















 


FOR DEFENDANT LOEWS:


 


 


	
  /s/ Deborah L. Feinstein

  	
   

  
	
  Deborah
  L. Feinstein

  Arnold & Porter LLP

  555 Twelfth Street, NW

  Washington, D.C. 20004

  Tel:  (202) 942-5015

  Fax: (202) 942-5999