Document:

Exhibit 10.3

 

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.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

FINAL
JUDGMENT

 

WHEREAS, plaintiffs, United States of America, the State of Illinois,
the State of New York, and the Commonwealth of Massachusetts filed their
Complaint on December 21, 2005, plaintiffs and defendants, Marquee
Holdings, Inc. (“AMC”) and LCE Holdings, Inc. (“Loews”), by their
respective attorneys, have consented to the entry of this Final Judgment without
trial or

 

 

adjudication
of any issue of fact or law, and without this Final Judgment constituting any
evidence against or admission by any party regarding any issue of fact or law;

 

AND WHEREAS, defendants agree to be bound by the provisions of this
Final Judgment pending its approval by the Court;

 

AND WHEREAS, the essence of this Final Judgment is the prompt and
certain divestiture[s] of certain rights or assets by the defendants to assure
that competition is not substantially lessened;

 

AND WHEREAS, plaintiffs require defendants to make certain
divestiture[s] for the purpose of remedying the loss of competition alleged in
the Complaint;

 

AND WHEREAS, defendants have represented to the United States that the
divestiture[s] required below can and will be made and that defendants will
later raise no claim of hardship or difficulty as grounds for asking the Court
to modify any of the divestiture provisions contained below;

 

NOW THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the parties, it
is ORDERED, ADJUDGED AND DECREED:

 

I. Jurisdiction

 

This Court has jurisdiction over the subject matter of and each of the
parties to this action. The Complaint states a claim upon which relief may be
granted against defendants under Section 7 of the Clayton Act, as amended
(15 U.S.C. § 18).

 

2

 

II. Definitions

 

As used in this Final Judgment:

 

A.                                   “Acquirer” or “Acquirers” means the entity or
entities to whom defendants 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.                                    “Landlord Consent” means any contractual
approval or consent that the landlord or owner of one or more of the Theatre
Assets, or the property on which one or more of the Theatre Assets is situated,
must grant prior to the transfer of one of the Theatre Assets to an Acquirer.

 

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

 

	
   

  	
   

  	
  Theatre Name

  	
   

  	
  Theatre Address

  
	
  i.

  	
   

  	
  City
  North 14

  	
   

  	
  2600
  N. Western Ave. 

  Chicago, IL

  
	
  ii.

  	
   

  	
  Webster
  Place 11

  	
   

  	
  1471
  W. Webster Avenue 

  Chicago, IL

  
	
  iii.

  	
   

  	
  E-Walk
  13

  	
   

  	
  247
  W. 42nd St. 

  New York, NY

  
	
  iv.

  	
   

  	
  Meridian
  16

  	
   

  	
  1501
  7th Ave.

  Seattle, WA

  
	
  v.

  	
   

  	
  Fenway
  13

  	
   

  	
  201
  Brookline Ave.

  Boston, MA

  
	
  vi.

  	
   

  	
  Keystone
  Park 16

  	
   

  	
  13933
  N. Central Expressway

  Dallas, TX

  

 

3

 

The term “Theatre Assets”
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

 

4

 

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 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.

 

III. Applicability

 

A.                                   This Final Judgment applies to AMC and Loews,
as defined above, and all other persons in active concert or participation with
any of them who receive actual notice of this Final Judgment by personal
service or otherwise.

 

B.                                     Defendants shall require, as a condition of
the sale or other disposition of all or substantially all of their assets or of
lesser business units that include the Theatre Assets, that the purchaser
agrees to be bound by the provisions of this Final Judgment, provided, however,
that defendants need not obtain such an agreement from the Acquirer[s].

 

IV. Divestitures

 

A.                                   Defendants are ordered and directed, within
120 calendar days after the filing of the Complaint in this matter, or five (5) days
after notice of the entry of this Final Judgment by the Court, whichever is
later, to divest the Theatre Assets in a manner consistent with this Final
Judgment to an Acquirer acceptable to the United States in its sole discretion
after consultation with the State of Illinois, State of New York, and
Commonwealth of Massachusetts, as appropriate. The United States, in its sole
discretion, may agree to one or more extensions of this time period not to
exceed 60 days in total, and shall notify the Court in such circumstances.

 

5

 

Defendants agree to use
their best efforts to divest the Theatre Assets as expeditiously as possible.

 

B.                                     In accomplishing the divestiture[s] ordered
by this Final Judgment, defendants promptly shall make known, by usual and
customary means, the availability of the Theatre Assets. Defendants shall
inform any person making inquiry regarding a possible purchase of the Theatre
Assets that they are being divested pursuant to this Final Judgment and provide
that person with a copy of this Final Judgment. Defendants shall offer to
furnish to all prospective Acquirers, subject to customary confidentiality
assurances, all information and documents relating to the Theatre Assets
customarily provided in a due diligence process except such information or
documents subject to the attorney-client or work-product privileges. Defendants
shall make available such information to the United States at the same time
that such information is made available to any other person.

 

C.                                     Defendants shall provide the Acquirer[s] and
the United States information relating to the personnel involved in the
operation of the Theatre Assets to enable the Acquirer[s] to make offers of
employment. Defendants will not interfere with any negotiations by the Acquirer[s]
to employ any defendant employee whose primary responsibility is the operation
of the Theatre Assets.

 

D.                                    Defendants shall permit prospective Acquirers
of the Theatre Assets to have reasonable access to personnel and to make
inspections of the physical facilities of the Theatre Assets; access to any and
all environmental, zoning, and other permit documents and information; and
access to any and all financial, operational, or other documents and
information customarily provided as part of a due diligence process.

 

6

 

E.                                      Defendants shall warrant to all Acquirers of
the Theatre Assets that each asset will be operational on the date of sale.

 

F.                                      Defendants shall not take any action that
will impede in any way the permitting, operation, or divestiture[s] of the
Theatre Assets.

 

G.                                     At the option of the Acquirer[s], defendants
shall enter into an agreement for products and services, such as computer
support services, that are reasonably necessary for the Acquirer[s] to
effectively operate the Theatre Assets during a transition period. The terms
and conditions of any contractual arrangements meant to satisfy this provision
must be commercially reasonable for those products and services for which the
agreement is entered and shall remain in effect for no more than three months,
absent approval of the United States, in its sole discretion, after consultation
with the State of Illinois, State of New York, and Commonwealth of
Massachusetts, as appropriate.

 

H.                                    Defendants shall warrant to the Acquirer[s]
of the Theatre Assets that there are no material defects in the environmental,
zoning or other permits pertaining to the operation of each asset, and that
following the sale of the Theatre Assets, defendants will not undertake,
directly or indirectly, any challenges to the environmental, zoning, or other
permits relating to the operation of the Theatre Assets.

 

I.                                         Unless the United States otherwise consents
in writing, the divestiture[s] pursuant to Section IV, or by trustee
appointed pursuant to Section V, of this Final Judgment, shall include the
entire Theatre Assets, and shall be accomplished in such a way as to satisfy
the United States, in its sole discretion (after consultation with the State of
Illinois, State of New York, and Commonwealth of Massachusetts, as appropriate)
that the Theatre Assets can and will be used by

 

7

 

the Acquirer[s] as part
of a viable, ongoing business of first-run, commercial motion picture theatres.
Divestiture[s] of the Theatre Assets may be made to one or more Acquirers,
provided that in each instance it is demonstrated to the sole satisfaction of
the United States that the Theatre Assets will remain viable and the
divestiture[s] of such assets will remedy the competitive harm alleged in the
Complaint. The divestiture[s], whether pursuant to Section IV or Section V
of this Final Judgment,

 

(1)                                  shall be made to an Acquirer (or Acquirers)
that, in the United States’s sole judgment (after consultation with the State
of Illinois, State of New York, and Commonwealth of Massachusetts, as
appropriate), has the intent and capability (including the necessary
managerial, operational, technical and financial capability) of competing
effectively in the business of first-run, commercial motion picture theatres;
and

 

(2)                                  shall be accomplished so as to satisfy the
United States, in its sole discretion (after consultation with the State of
Illinois, State of New York, and Commonwealth of Massachusetts, as
appropriate), that none of the terms of any agreement between an Acquirer (or
Acquirers) and defendants give defendants the ability unreasonably to raise the
Acquirer’s costs, to lower the Acquirer’s efficiency, or otherwise to interfere
in the ability of the Acquirer to compete effectively.

 

V. Appointment
of Trustee

 

A.                                   If
defendants have not divested the Theatre Assets within the time period specified
in Section IV(A), defendants shall notify the United States of that fact
in writing. Upon application of the United States, the Court shall appoint a
trustee selected by the United States and approved by the Court to effect the
divestiture[s] of the Theatre Assets.

 

B.                                     After the appointment of a trustee becomes
effective, only the trustee shall have the right to sell the Theatre Assets.
The trustee shall have the power and authority to accomplish

 

8

 

the divestiture[s] to an
Acquirer[s] acceptable to the United States (after consultation with the State
of Illinois, State of New York, and Commonwealth of Massachusetts, as
appropriate) at such price and on such terms as are then obtainable upon
reasonable effort by the trustee, subject to the provisions of Sections IV, V,
VI, and VII of this Final Judgment, and shall have such other powers as this
Court deems appropriate. Subject to Section V (D) of this Final
Judgment, the trustee may hire at the cost and expense of defendants any
investment bankers, attorneys, or other agents, who shall be solely accountable
to the trustee, reasonably necessary in the trustee’s judgment to assist in the
divestiture[s].

 

C.                                     Defendants shall not object to a sale by the
trustee on any ground other than the trustee’s malfeasance. Any such objections
by defendants must be conveyed in writing to the United States and the trustee
within ten (10) calendar days after the trustee has provided the notice
required under Section VII.

 

D.                                    The trustee shall serve at the cost and
expense of defendants, on such terms and conditions as the Court approves, and
shall account for all monies derived from the sale of the assets sold by the
trustee and all costs and expenses so incurred. After approval by the Court of
the trustee’s accounting, including fees for its services and those of any
professionals and agents retained by the trustee, all remaining money shall be
paid to defendants and the trust shall then be terminated. The compensation of
the trustee and any professionals and agents retained by the trustee shall be
reasonable in light of the value of the Theatre Assets and based on a fee arrangement
providing the trustee with an incentive based on the price and terms of the
divestiture[s] and the speed with which it is accomplished, but timeliness is
paramount.

 

9

 

E.                                      Defendants shall use their best efforts to
assist the trustee in accomplishing the required divestiture[s]. The trustee
and any consultants, accountants, attorneys, and other persons retained by the
trustee shall have full and complete access to the personnel, books, records,
and facilities of the business to be divested, and defendants shall develop
financial and other information relevant to such business as the trustee may
reasonably request, subject to reasonable protection for trade secret or other
confidential research, development, or commercial information. Defendants shall
take no action to interfere with or to impede the trustee’s accomplishment of
the divestiture[s].

 

F.                                      After its appointment, the trustee shall file
monthly reports with the parties and the Court setting forth the trustee’s
efforts to accomplish the divestiture[s] ordered under this Final Judgment. To
the extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of the
Court. Such reports shall include the name, address, and telephone number of
each person who, during the preceding month, made an offer to acquire,
expressed an interest in acquiring, entered into negotiations to acquire, or
was contacted or made an inquiry about acquiring, any interest in the Theatre
Assets, and shall describe in detail each contact with any such person. The
trustee shall maintain full records of all efforts made to divest the Theatre
Assets.

 

G.                                     If the trustee has not accomplished such
divestiture[s] within six months after its appointment, the trustee shall
promptly file with the Court a report setting forth (1) the trustee’s
efforts to accomplish the required divestiture[s], (2) the reasons, in the
trustee’s judgment, why the required divestiture[s] has not been accomplished,
and (3) the trustee’s recommendations. To the extent such reports contain
information that the trustee deems confidential, such reports shall

 

10

 

not be filed in the
public docket of the Court. The trustee shall at the same time furnish such
report to the United States and, as appropriate, the State of Illinois, State
of New York, and Commonwealth of Massachusetts who shall have the right to make
additional recommendations consistent with the purpose of the trust. The Court
thereafter shall enter such orders as it shall deem appropriate to carry out
the purpose of the Final Judgment, which may, if necessary, include extending
the trust and the term of the trustee’s appointment by a period requested by
the United States.

 

VI. Landlord
Consent

 

A.                                   If defendants are unable to effect the divestiture[s]
required herein due to the inability to obtain the Landlord Consent for any of
the Theatre Assets, defendants shall divest alternative Theatre Assets that
compete effectively with the theatre for which Landlord Consent was not
obtained. The United States shall in its sole discretion (after consultation
with the State of Illinois, State of New York, and Commonwealth of
Massachusetts, as appropriate), determine whether such theatre competes
effectively with the theatre for which landlord consent was not obtained.

 

B.                                     Within five (5) business days following
a determination that Landlord Consent cannot be obtained for one of the Theatre
Assets, defendants shall notify the United States and propose an alternative
divestiture pursuant to Section VI(A). The United States shall have then
ten (10) business days in which to determine whether such theatre is a
suitable alternative pursuant to 

Section VI(A). If the defendants’ selection is deemed not to be a suitable
alternative, the United States shall in its sole discretion select the theatre
to be divested (after consultation

 

11

 

with the State of
Illinois, State of New York, and Commonwealth of Massachusetts, as
appropriate).

 

C.                                     If the trustee is responsible for effecting
the divestiture[s], it shall notify both the United States and the defendants
within five (5) business days following a determination that Landlord
Consent can not be obtained for one of the Theatre Assets. Defendants shall
thereafter have five (5) business days to propose an alternative
divestiture pursuant to Section VI(a). The United States shall have then
ten (10) business days in which to determine whether such theatre is
suitable alternative pursuant to Section VI(a). If the defendants’
selection is deemed not to be a suitable competitive alternative, the United
States shall in its sole discretion select the theatre to be divested (after
consultation with the State of Illinois, State of New York, and Commonwealth of
Massachusetts, as appropriate).

 

VII. Notice
of Proposed Divestitures

 

A.                                   Within two (2) business days following
execution of a definitive divestiture agreement, defendants or the trustee,
whichever is then responsible for effecting the divestiture[s] required herein,
shall notify the United States and, as appropriate, the State of Illinois,
State of New York, and Commonwealth of Massachusetts of any proposed
divestiture[s] required by Sections IV or V of this Final Judgment. If the
trustee is responsible, it shall similarly notify defendants. The notice shall
set forth the details of the proposed divestiture[s] and list the name,
address, and telephone number of each person not previously identified who
offered or expressed an interest in or desire to acquire any ownership interest
in the Theatre Assets, together with full details of the same.

 

12

 

B.                                     Within fifteen (15) calendar days of receipt
by the United States of such notice, the United States may request from
defendants, the proposed Acquirer or Acquirers, any other third party, or the
trustee if applicable additional information concerning the proposed
divestiture[s], the proposed Acquirer or Acquirers, and any other potential
Acquirer. Defendants and the trustee shall furnish any additional information
requested within fifteen (15) calendar days of the receipt of the request,
unless the parties shall otherwise agree.

 

C.                                     Within thirty (30) calendar days after
receipt of the notice or within twenty (20) calendar days after the United
States has been provided the additional information requested from defendants,
the proposed Acquirer or Acquirers, any third party, and the trustee, whichever
is later, the United States shall provide written notice to defendants and the
trustee, if there is one, stating whether or not it objects to the proposed
divestiture[s]. If the United States provides written notice that it does not
object, the divestiture[s] may be consummated, subject only to defendants’
limited right to object to the sale under Section V(C) of this Final
Judgment. Absent written notice that the United States does not object to the
proposed Acquirer[s] or upon objection by the United States, the divestiture[s]
proposed under Sections IV or Section V shall not be consummated. Upon
objection by defendants under Section V(C), the divestiture[s] proposed
under Section V shall not be consummated unless approved by the Court.

 

VIII. Financing

 

Defendants
shall not finance all or any part of any purchase made pursuant to Section IV
or V of this Final Judgment.

 

13

 

IX. Hold
Separate

 

Until the divestiture[s] required by this Final Judgment has been
accomplished defendants shall take all steps necessary to comply with the Hold
Separate Stipulation and Order entered by this Court. Defendants shall take no
action that would jeopardize the divestiture[s] ordered by this Court.

 

X. Affidavits

 

A.                                   Within twenty (20) calendar days of the
filing of the Complaint in this matter, and every thirty (30) calendar days
thereafter until the divestiture[s] has/have been completed under Sections IV
or V, defendants shall deliver to the United States an affidavit as to the fact
and manner of its compliance with Section IV or V of this Final Judgment.
Each such affidavit shall include the name, address, and telephone number of
each person who, during the preceding thirty days, made an offer to acquire,
expressed an interest in acquiring, entered into negotiations to acquire, or
was contacted or made an inquiry about acquiring, any interest in the Theatre
Assets, and shall describe in detail each contact with any such person during
that period. Each such affidavit shall also include a description of the
efforts defendants have taken to solicit buyers for the Theatre Assets, and to
provide required information to prospective purchasers, including the
limitations, if any, on such information. Assuming the information set forth in
the affidavit is true and complete, any objection by the United States to
information provided by defendants, including limitation on information, shall
be made within fourteen (14) days of receipt of such affidavit.

 

B.                                     Within twenty (20) calendar days of the
filing of the Complaint in this matter, defendants shall deliver to the United
States an affidavit that describes in reasonable detail all

 

14

 

actions defendants have
taken and all steps defendants have implemented on an ongoing basis to comply
with Section IX of this Final Judgment. Defendants shall deliver to the
United States an affidavit describing any changes to the efforts and actions
outlined in defendants’ earlier affidavits filed pursuant to this section within
fifteen (15) calendar days after the change is implemented.

 

C.                                     Defendants shall keep all records of all
efforts made to preserve and divest the Theatre Assets until one year after
such divestiture[s] has/have been completed.

 

XI. Compliance
Inspection

 

A.                                   For the purposes of determining or securing
compliance with this Final Judgment, or of determining whether the Final
Judgment should be modified or vacated, and subject to any legally recognized
privilege, from time to time duly authorized representatives of the United
States Department of Justice, the State of Illinois, State of New York, or
Commonwealth of Massachusetts, including consultants and other persons retained
by either of them, shall, upon written request of a duly authorized
representative of the Assistant Attorney General in charge of the Antitrust
Division, the Attorney General for Illinois, Attorney General for New York, or
Attorney General for Massachusetts, and on reasonable notice to defendants, be
permitted:

 

(1)                                  access during defendants’ office hours to
inspect and copy, or at plaintiff’s option, to require defendants provide
copies of, all books, ledgers, accounts, records and documents in the
possession, custody, or control of defendants, relating to any matters
contained in this Final Judgment; and

 

(2)                                  to interview, either informally or on the record,
defendants’ officers, employees, or agents, who may have their individual
counsel present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or interference
by defendants.

 

15

 

B.                                     Upon the written request of a duly authorized
representative of the Assistant Attorney General in charge of the Antitrust
Division, the Attorney General for Illinois, Attorney General for New York, or
Attorney General for Massachusetts, defendants shall submit written reports,
under oath if requested, relating to any of the matters contained in this Final
Judgment as may be requested.

 

C.                                     No information or documents obtained by the
means provided in this section shall be divulged by the United States, the
State of Illinois, State of New York, or Commonwealth of Massachusetts, to any
person other than an authorized representative of the executive branch of the
United States, or of each state government, except in the course of legal
proceedings to which at least one of the plaintiffs is a party (including grand
jury proceedings), or for the purpose of securing compliance with this Final
Judgment, or as otherwise required by law.

 

D.                                    If at the time information or documents are
furnished by defendants to the plaintiffs, defendants represent and identify in
writing the material in any such information or documents to which a claim of
protection may be asserted under Rule 26(c)(7) of the Federal Rules of
Civil Procedure, and defendants mark each pertinent page of such material,
“Subject to claim of protection under Rule 26(c)(7) of the Federal Rules of
Civil Procedure,” then the plaintiffs shall give defendants ten (10) calendar
days notice prior to divulging such material in any legal proceeding (other
than a grand jury proceeding).

 

XII. Notification

 

Unless such transaction is otherwise subject to the reporting and
waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, 15 U.S.C. § 18a (the “HSR Act”), defendants, without
providing advance notification to the United

 

16

 

States, shall not
directly or indirectly acquire any assets of or any interest, including any
financial, security, loan, equity or management interest, in the business of
first-run, commercial theatres in Cook County, Illinois; New York County, New
York (Manhattan); King County, Washington; Suffolk County, Massachusetts; and
Dallas County, Texas during a 10-year period. This notification requirement
shall apply only to the acquisition of any assets or any interest in the
business of first-run, commercial motion picture theatres at the time of the
acquisition and shall not be construed to require notification of acquisition
of interest in new theatre developments or of assets not being operated as
first-run commercial motion picture theatre businesses, provided, that this
notification requirement shall apply to first-run, commercial theatres under
construction at the time of the entering of this Final Judgment.

 

Such notification shall be provided to the United States in the same
format as, and per the instructions relating to the Notification and Report Form set
forth in the Appendix to Part 803 of Title 16 of the Code of Federal
Regulations as amended, except that the information requested in Items 5
through 9 of the instructions must be provided only about first-run, commercial
theatres. Notification shall be provided at least thirty (30) days prior to acquiring
any such interest, and shall include, beyond what may be required by the
applicable instructions, the names of the principal representatives of the
parties to the agreement who negotiated the agreement, and any management or
strategic plans discussing the proposed transaction. If within the 30-day
period after notification, representatives of United States make a written
request for additional information, defendants shall not consummate the
proposed transaction or agreement until twenty (20) days after submitting all
such additional information. Early termination of the waiting periods in this
paragraph may be requested and, where appropriate, granted in the same

 

17

 

manner as is applicable
under the requirements and provisions of the HSR Act and rules promulgated
thereunder. This Section shall be broadly construed and any ambiguity or
uncertainty regarding the filing of notice under this Section shall be
resolved in favor of filing notice.

 

XIII. No
Reacquisition

 

Defendants may not reacquire any part of the Theatre Assets during the
term of this Final Judgment.

 

XIV. Retention
of Jurisdiction

 

This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and directions
as may be necessary or appropriate to carry out or construe this Final
Judgment, to modify any of its provisions, to enforce compliance, and to punish
violations of its provisions.

 

XV. Expiration
of Final Judgment

 

Unless this Court grants an extension, this Final Judgment shall expire
ten years from the date of its entry.

 

XVI. Public
Interest Determination

 

Entry of this Final Judgment is in the public interest.

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Court
  approval subject to procedures

  of Antitrust Procedures and Penalties

  Act, 15 U.S.C. § 16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  United States District Judge

  

 

18

 

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.

 

19

 

	
  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) 942-5999Exhibit 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

  

 

2

 

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

 

3

 

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

 

4

 

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

 

5

 

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

 

6

 

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.

 

7

 

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

 

8

 

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

  

 

9

 

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.

 

10

 

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

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