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Stockholders Agreement

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Title:

Stockholders Agreement

Entities:

Citigroup Global Markets Inc.; Deutsche Bank Trust Company Americas; Lehman Brothers Inc.; Loews Washington Cinemas, Inc. ; U.S. Bank, NA; Bank of America, NA

Date:

2005

Size:

130KB total

Price:

$41

ID:

#2123212

► Corporate ► Holder ► Stockholder Agreements
► Financial
► Financial ► Money Center Banks

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STOCKHOLDERS AGREEMENT

among

LCE Holdings, Inc.

LCE Intermediate Holdings, Inc.

LCE Holdco LLC

LCE Acquisition Corporation

and

Certain Stockholders of LCE Holdings, Inc. and LCE Intermediate Holdings, Inc.

Dated as of July 30, 2004

TABLE OF CONTENTS


1. EFFECTIVENESS; DEFINITIONS		2
1.1. Closing		2
1.2. Definitions		2
2. VOTING AGREEMENT		2
2.1. Certain Actions		2
2.1.1. Annual Budget		2
2.1.2. Merger, Consolidation, Change of Control		2
2.1.3. Indebtedness, etc.		2
2.1.4. Sale of Assets		3
2.1.5. Acquisition of Assets		3
2.1.6. Repurchase of Securities		3
2.1.7. Charter and By-laws		3
2.1.8. Acquisition Documents		3
2.1.9. Executive Officers		4
2.1.10. Management Transactions		4
2.1.11. Equity Issuances		4
2.1.12. Acquisition of Securities		4
2.1.13. Reorganization		4
2.1.14. Dividends		4
2.1.15. Material Contracts Outside the Ordinary Course of Business		4
2.1.16. Recapitalization		4
2.1.17. Litigation		4
2.1.18. Nature of Business		4
2.1.19. Financial Auditors		4
2.1.20. Establishment of Subsidiary		5
2.1.21. Management Equity Program		5
2.1.22. Joint Ventures and Alliances		5
2.1.23. Agreement		5
2.2. Other Restricted Actions		5
2.3. Committees		5
2.4. Directors of the Company and its Subsidiaries		6
2.4.1. CEO Director		6
2.4.2. Directors of Subsidiaries		6
2.4.3. Amendment of By-Laws		5
2.5. Significant Transactions		6
2.6. Consent to Amendment		6
2.7. The Company and Midco		7
2.8. Period		7
3. TRANSFER RESTRICTIONS		7
3.1. Transfers Allowed		7
3.1.1. Permitted Transferees		7
3.1.2. Distributions and Charitable Contributions		7
3.1.3. Public Transfers		7
3.1.4. Tag Along and Drag Along		7

-i-


3.1.5. Other Private Transfers		8
3.2. Certain Transferees to Become Parties		8
3.3. Restrictions on Public Transfers under Rule 144		8
3.4. Restrictions on Transfers to Strategic Investors		9
3.5. Impermissible Transfer		9
3.6. Notice of Transfer		9
3.7. Period		9
4. TAG ALONG AND DRAG ALONG RIGHTS AND RIGHT OF FIRST OFFER		9
4.1. Tag Along		9
4.1.1. Notice		9
4.1.2. Exercise		10
4.1.3. Irrevocable Offer		10
4.1.4. Reduction of Shares Sold		11
4.1.5. Additional Compliance		11
4.2. Drag Along		12
4.2.1. Exercise		12
4.3. Miscellaneous		13
4.3.1. Certain Legal Requirements		13
4.3.2. Further Assurances		13
4.3.3. Sale Process		14
4.3.4. Treatment of Options, Warrants and Convertible Securities		14
4.3.5. Expenses		14
4.3.6. Closing		14
4.4. Right of First Offer		15
4.4.1. Notice		15
4.4.2. Exercise		15
4.4.3. Irrevocable Offer		16
4.4.4. Acceptance of Offers		16
4.4.5. Additional Compliance		16
4.4.6. Determination of the Number of Subject Shares to be Sold		16
4.5. Period		17
5. RIGHT OF PARTICIPATION		17
5.1. Right of Participation		18
5.1.1. Offer		18
5.1.2. Exercise		18
5.1.3. Other Securities		19
5.1.4. Certain Legal Requirements		19
5.1.5. Further Assurances		20
5.1.6. Expenses		20
5.1.7. Closing		20
5.2. Post-Issuance Notice		21
5.3. Excluded Transactions		21
5.4. Certain Provisions Applicable to Options, Warrants and Convertible Securities		22
5.5. Acquired Shares		22
5.6. Period		22

-ii-


6. COVENANTS		22
6.1. Information Rights		22
6.1.1. Historical Financial Information		22
6.1.2. Period		23
6.2. Confidentiality		23
6.3. Directors and Officers Insurance		24
7. REMEDIES		24
7.1. Generally		24
7.2. Deposit		24
8. LEGENDS		24
8.1. Restrictive Legend		24
8.2. 1933 Act Legends		25
8.3. Stop Transfer Instruction		25
8.4. Termination of 1933 Act Legend		25
9. AMENDMENT, TERMINATION, ETC.		25
9.1. Oral Modifications		25
9.2. Written Modifications		26
9.3. Withdrawal from Agreement		26
9.4. Effect of Termination		26
10. DEFINITIONS		27
10.1. Certain Matters of Construction		27
10.2. Definitions		27
11. MISCELLANEOUS		35
11.1. Authority: Effect		35
11.2. Notices		35
11.3. Binding Effect, Etc.		37
11.4. Descriptive Heading		37
11.5. Counterparts		37
11.6. Severability		37
11.7. No Recourse		37
11.8. Aggregation of Shares		38
11.9. Obligations of Company, Midco, Holdco and Acquisition		38
11.10. Indemnity and Liability		38
12. GOVERNING LAW		39
12.1. Governing Law		39
12.2. Consent to Jurisdiction		39
12.3. WAIVER OF JURY TRIAL		40
12.4. Exercise of Rights and Remedies		40

-iii-

STOCKHOLDERS AGREEMENT

This Stockholders Agreement (the Agreement) is made as of July 30, 2004 by and among:

(i)

LCE Holdings, Inc., a Delaware corporation (together with its successors and permitted assigns, the Company);

(ii)

LCE Intermediate Holdings, Inc., a Delaware corporation (together with its successors and permitted assigns, Midco);

(iii)

LCE Holdco LLC, a Delaware limited liability company (together with its successors and permitted assigns, Holdco);

(iv)

LCE Acquisition Corporation, a Delaware corporation (together with its successors and permitted assigns including Loews Cineplex Entertainment Corporation, Loews);

(v)

each Person executing this Agreement and listed as an Investor on the signature pages hereto (collectively with their Permitted Transferees, the Investors); and

(vi)

such other Persons, if any, that from time to time become party hereto as transferees of Shares pursuant to Section 3.2 (collectively, together with the Investors, the Stockholders) in accordance with the terms hereof.

RECITALS

1. The Company has been formed for the purpose of acquiring (the Acquisition), indirectly through one or more subsidiaries, pursuant to a Stock Purchase Agreement, dated as of June 18, 2004 (the Acquisition Agreement), among the Company, Loews Cineplex Entertainment Corporation and the other persons identified therein, all outstanding shares of Loews.

2. Upon the Closing (as defined below), the Common Stock (as defined below) of the Company and the common stock and the Preferred Stock (as defined below) of Midco will be held as set forth on Schedule I hereto.

3. After the closing of the Acquisition, certain managers of the Company and its subsidiaries may purchase shares of Common Stock and Preferred Stock. In addition, Options (as defined below) may be issued to managers pursuant to the Companys equity incentive program. In connection with the purchase of such securities and the issuance of Options, the Company, Midco, Holdco, Loews, the Investors and the managers named therein (collectively with their permitted transferees, the Managers) may enter into a management stockholders agreement (the Management Stockholders Agreement).

4. The parties believe that it is in the best interests of the Company, Midco, Loews and the Stockholders to set forth their agreements on certain matters.

AGREEMENT

Therefore, the parties hereto hereby agree as follows:

1. EFFECTIVENESS; DEFINITIONS.

1.1. Closing. This Agreement shall become effective upon consummation of the closing under the Acquisition Agreement (the Closing).

1.2. Definitions. Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 10 hereof.

2. VOTING AGREEMENT.

2.1. Certain Actions. In addition to any other approval required by the certificate of incorporation of the Company, Midco, or Loews or by applicable law, the approval of the Requisite Stockholder Majority shall be required to do any of the following, and the Company, Midco, Holdco and Loews shall not, and shall cause their respective subsidiaries not to, take any of the following actions without the approval of the Requisite Stockholder Majority (or the approval of such other Stockholder(s) to the extent provided below):

2.1.1. Annual Budget. Approve the annual operating budget of the Company and its subsidiaries, modify in any material respect any such budget or take any action that is or would be reasonably likely to be in material variance therefrom.

2.1.2. Merger, Consolidation, Change of Control. Enter into or effect any transaction or series of related transactions involving the merger or consolidation of the Company or any of its subsidiaries with or into any Person, other than a merger or consolidation of a direct or indirect wholly-owned subsidiary of the Company with or into the Company or another direct or indirect wholly-owned subsidiary of the Company; or enter into or effect a Change of Control transaction.

2.1.3. Indebtedness, etc. Other than a draw down in the ordinary course of business under a debt agreement entered into prior to the date of such draw down the execution of which was previously approved by the Requisite Stockholder Majority, incur any indebtedness (including refinancings), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person (provided that the Company or any of its direct or indirect subsidiaries may provide cross-guarantees for any indebtedness that has been approved under this Section 2.1.3), enter into any agreement under which it may incur indebtedness in the future, or make any loan, advance or capital contribution to any Person (other than the Company or any of its wholly-owned subsidiaries), make any voluntary prepayment of indebtedness of the Company or any of its subsidiaries outside the ordinary course of business, in each case in an aggregate amount in excess of $50,000,000 in any transaction or series of related transactions, or make an amendment to the maturity date, aggregate principal amount or interest rate of existing indebtedness.

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