Exhibit 10.7


 


	
   

  	
  [SEAL]

  
	
   

  	
  RECEIVED

  
	
   

  	
   

  
	
   

  	
  DEC 22 AM 9:39

  
	
   

  	
   

  
	
   

  	
  RICHARD W. WEEKING

  
	
   

  	
  CLERK, U.S. DISTRICT
  COURT

  
	
   

  	
  NORTHERN DISTRICT OF
  CALIFORNIA

  



 


BILL LOCKYER


Attorney General of the State of California


RICHARD M. FRANK


Chief Deputy Attorney General


THOMAS GREENE


Chief Assistant Attorney General


KATHLEEN E. FOOTE


Senior Assistant Attorney General


ADAM MILLER, State Bar No. 168254


Deputy Attorney General


455 Golden Gate Avenue, Suite 11000


San Francisco, CA 94102-7004


Telephone: (415) 703-5551


Fax: (415) 703-5480


Email: Adam.Miller@doj.ca.gov


 


Attorneys for the State of California


 


IN THE UNITED STATES DISTRICT COURT



FOR THE NORTHERN DISTRICT OF CALIFORNIA


 


	
  STATE OF CALIFORNIA,

  	
   

  	
  CASE NO.

  
	
   

  	
   

  	
   

  
	
  Plaintiff,

  	
   

  	
  [PROPOSED]

  
	
   

  	
   

  	
  STIPULATED
  FINAL JUDGMENT

  
	
  v.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MARQUEE HOLDINGS, INC.,

  	
   

  	
   

  
	
  a Delaware corporation,

  	
   

  	
   

  
	
  d/b/a AMC ENTERTAINMENT INC.,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LCE HOLDINGS, INC.,

  a Delaware corporation,

  d/b/a LOEWS CINEPLEX

  ENTERTAINMENT CORPORATION,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Defendants.

  	
   

  	
   

  



 


STIPULATED FINAL JUDGMENT


 


WHEREAS, on June 21, 2005, defendants
announced their intention to merge (the “proposed transaction”);


 


AND WHEREAS, the State of California (“plaintiff”)
filed its Complaint against Marquee Holdings Inc. and LCE Holdings, Inc. (“defendants”)
on            ,       2005,
plaintiff and defendants by
their respective attorneys have consented to the entry of this Final Judgment


 


STIPULATED FINAL JUDGMENT


 


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without trial or adjudication of any issue of fact or law herein,
defendants and their respective attorneys have waived notice of presentation of
this Final Judgment and service of summons, and without this Final Judgment
constituting any evidence against or an admission by any party with respect to
any issue of law or fact herein;


 


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


 


AND WHEREAS, this Final Judgment requires
defendants, as a condition of the proposed transaction, to promptly divest the
two theaters in the State of California identified below;


 


AND WHEREAS, plaintiff’s purpose in seeking
these divestitures, and plaintiff’s actions in effectuating these divestitures,
are to establish a viable competitor(s) in the State of California in the exhibition
of first-run movies;


 


AND WHEREAS, defendants have represented to
the plaintiff that the divestitures ordered herein will be made, and that
defendants will later raise no claim of hardship or difficulty in accomplishing
the divestitures as grounds for asking the Court to modify the divestiture
requirements of this Final Judgment;


 


NOW, THEREFORE, before the taking of any
testimony, and without trial or adjudication of any issue of fact or law
herein, and upon consent of the parties hereto, it is hereby ORDERED, ADJUDGED,
AND DECREED as follows:


 


I.              JURISDICTION


 


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


 


II.            DEFINITIONS


 


“OAG” means the Office of the Attorney
General for the State of California.


 


“AMC” means Marquee Holdings Inc. d/b/a AMC
Entertainment Inc. and AMC Theatres, a Delaware corporation with its principal
place of business in Kansas City, Missouri,


 


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and its successors,
assigns, subsidiaries, divisions, groups, affiliates, partnerships and joint
ventures, and directors, officers, managers, agents, and employees.


 


“Loews” means LCE
Holdings, Inc. d//b/a Loews Cineplex Entertainment Corporation and Loews Theatres,
a Delaware corporation with its principal place of business in New York, New
York, and its successors, assigns, subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures, and directors, officers, managers, agents, and
employees.


 


“Defendants” means
AMC and Loews, collectively or individually.


 


The “State of
California theatre assets” means the movie theatre businesses operated by AMC
at 1000 Van Ness Avenue, San Francisco, CA (commonly known as the AMC Van
Ness), and 1881 Post Street, San Francisco, CA (commonly known as the AMC
Kabuki). This term includes all tangible and intangible assets used in the
operation of these theatres including: all real property (owned and leased);
all personal property, inventory, office furniture, fixed assets and fixtures,
materials, supplies, and other tangible property or improvements used in the
operation of the theatres; all licenses, permits and authorizations issued by
any governmental organization relating to the operation of the theatres, and
all contracts, agreements, leases, licenses, commitments and understandings
pertaining to the theatres including supply agreements and licenses to exhibit
motion pictures. Provided however, that this term does not include (1) any
right to use or interest in the defendants’ trade names, trade marks and
copyrighted material, or (2) assets that the defendants do not own and are
not legally able to transfer. With the approval of OAG, in its sole discretion,
the State of California theatre assets may be modified to exclude assets and
rights that are not necessary to meet the competitive aims of this Final
Judgment and assets that the Acquirer(s) does not desire to purchase.


 


“Acquirer” means
the entity or entities to whom defendants divest the State of California theatre
assets under this Final Judgment.


 


III.           APPLICABILITY


 


A.            The provisions of this Final
Judgment apply to defendants, their successors and assigns, their subsidiaries,
directors, officers, managers, agents, and employees, and all other


 


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persons in active concert or participation with any of them who shall
have received actual notice of this Final Judgment by personal service or
otherwise.


 


B.            Defendants
shall require a party that acquires all or substantially all of the assets used
in defendants’ business of operating movie theatres in the State of California
to be bound by the provision of this Final Judgment; provided, however, that
defendants need not obtain such an agreement from an Acquirer in connection
with the divestiture of the State of California theatre assets.


 


IV.           DIVESTITURE


 


A.            Defendants
are hereby ordered and directed in accordance with the terms of this Final
Judgment, within 180 calendar days after the filing of the Complaint in this
matter or within 60 calendar days of the consummation of the proposed
transaction, whichever is later, to divest the State of California theatre
assets to an Acquirer or Acquirers acceptable to OAG in its sole discretion.


 


B.            Defendants
shall use their best efforts to accomplish the divestitures as expeditiously
and timely as possible. The OAG, in its sole discretion, may extend the time period
for any divestiture for two additional 30 day periods of time, not to exceed 60
calendar days in total.


 


C.            In
accomplishing the divestitures ordered by this Final Judgment, defendants shall
promptly make known, by usual and customary means, the availability of the
State of California theatre assets described in this Final Judgment. Defendants
shall inform any person making an inquiry regarding a possible purchase that
the sale is being made pursuant to this Final Judgment and provide such person
with a copy of this Final Judgment. Defendants shall also furnish to all prospective
Acquirers, subject to customary confidentiality assurances, all information
regarding the State of California theatre assets customarily provided in a due
diligence process, except such information subject to attorney-client privilege
or attorney work-product privilege.


 


D.            Defendants
shall not take any action that will impede in any way the operation of the
State of California theatre assets or jeopardize the divestitures described in
this Final Judgment. Unless OAG otherwise consents in writing, defendants shall
maintain and operate the


 


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theatres
to be divested as active businesses, maintain the management, staffing, sales,
and marketing of the theatres at levels substantially the same as current
levels, and maintain the theatres in operable condition at current capacity
configurations. The obligation of defendants to maintain and operate State of
California theatre assets terminates at the accomplishment of the divestitures
or by order of the Court pursuant to Section V.F. of this Final Judgment.
Nothing in this paragraph shall prevent the defendants from competing with the
Acquirer(s) after the divestiture of the State of California theatre assets has
been accomplished.


 


E.             Unless
OAG otherwise consents in writing, the divestitures pursuant to Section IV, or
by trustee appointed pursuant to Section V of this Final Judgment, shall
include the entire State of California theatre assets and be accomplished by
selling or otherwise conveying the State of California theatre assets in such a
way as to satisfy OAG in its sole discretion that the State of California
theatre assets will be used by the Acquirer(s) as part of a viable, ongoing business
of exhibition of first-run films. The divestitures, whether pursuant to Section IV
or Section V of this Final Judgment: (1) shall be made to an Acquirer
or Acquirers who it is demonstrated to OAG’s sole satisfaction has or have the
intent and capability (including the necessary managerial, operational, and
financial capability) of competing effectively in the business of exhibition of
first-run films; (2) shall be accomplished so as to satisfy OAG, in its sole
discretion, that none of the terms of any agreement between an Acquirer and AMC
or Loews give the defendants the ability unreasonably to raise the Acquirer’s
costs, to lower the Acquirer’s efficiency, or otherwise to interfere with the
ability of the Acquirer to compete effectively.


 


F.             Within
20 calendar days of the filing of the Complaint in this matter and every 30 calendar
days thereafter until the divestitures have been completed, defendants shall
deliver to OAG a progress report describing defendants’ efforts in divesting
and maintaining the State of California theatre assets. The progress report
shall include, at a minimum, (1) the name, address, phone number of any
person who has expressed any interest in acquiring, negotiating or receiving
more information about the State of California theatre assets; (2) the
efforts defendants


 


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have made in soliciting and providing information to prospective
Acquirers; and (3) any changes in the management, staffing, sales, and
play policies of the State of California theatre assets.


 


V.            APPOINTMENT OF TRUSTEE


 


A.            In
the event that defendants have not divested the State of California theatre assets
within the time specified in Section IV of this Final Judgment, the Court
shall appoint, on application of OAG, a trustee selected by OAG to effect the
divestiture of the State of California theatre assets.


 


B.            After
the appointment of a trustee becomes effective, only the trustee shall have the
right to sell the State of California theatre assets included in the trustee’s
appointment. The trustee shall have the power and authority to accomplish any
divestitures at the best price then obtainable upon a reasonable effort by the
trustee and shall have such other powers as the Court shall deem appropriate.
Subject to Section V.C. of this Final Judgment, the trustee shall have the
power and authority to hire at the cost and expense of defendants any
investment bankers, attorneys, or other agents reasonably necessary in the
judgment of the trustee to assist in the divestitures, and such professionals
and agents shall be accountable solely to the trustee. The trustee shall have
the power and authority to accomplish any State of California theatre assets divestitures
at the earliest possible time to an Acquirer or Acquirers acceptable to OAG in
its sole discretion, and shall have such other powers as this Court shall deem
appropriate. Defendants shall not object to a sale by the trustee on any
grounds other than the trustee’s malfeasance, or on the grounds that the sale
is contrary to the express terms of this Final Judgment. Any such objections by
defendants must be conveyed in writing to OAG and the trustee within ten
calendar days after the trustee has provided the notice required under Section VI
of this Final Judgment.


 


C.            The
trustee shall serve at the cost and expense of defendants, on such terms and conditions
as the Court may prescribe, 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


 


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then be terminated. The compensation of such trustee and of any
professionals and agents retained by the trustee shall be reasonable in light
of the value of the divested business and based on a fee arrangement providing
the trustee with an incentive based on the price and terms of the divestitures
and the speed with which they are accomplished.


 


D.            Defendants
shall use their best efforts to assist the trustee in accomplishing the required
divestitures, including best efforts to effect all necessary consents and
regulatory approvals. 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 businesses to be
divested, and defendants shall develop financial or other information relevant
to the business to be divested customarily provided in a due diligence process
as the trustee may reasonably request, subject to customary confidentiality
assurances. Defendants shall permit prospective Acquirers of the assets to have
reasonable access to personnel and to make such inspection of physical
facilities and any and all financial, operational or other documents and other
information as may be relevant to the divestitures required by this Final
Judgment.


 


E.             After
its appointment, the trustee shall file monthly reports with the parties and the
Court setting forth the trustee’s efforts to accomplish the divestitures ordered
pursuant to this Final Judgment; provided, however, that 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 businesses to be divested, and shall describe in
detail each contact with any such person during that period. The trustee shall
maintain full records of all efforts made to divest the businesses to be
divested.


 


F.             If
the trustee has not accomplished such divestitures within 90 days after its appointment,
the trustee thereupon shall file promptly with the Court a report setting forth
(1) the trustee’s efforts to accomplish the required divestitures, (2) the
reasons, in the trustee’s judgment, why the required divestitures have not been
accomplished, and (3) the trustee’s


 


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recommendations; provided, however, that 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. The trustee shall at the same time
furnish such report to the parties, who shall each have the right to be heard
and to make additional recommendations consistent with the purpose of the
trust. The Court shall enter thereafter such orders as it shall deem
appropriate in order to carry out the purpose of the trust which may, if
necessary, include extending the trust and the term of the trustee’s
appointment by a period requested by OAG.


 


VI.           NOTIFICATION


 


A.            Within two business days following
execution of a definitive agreement, contingent upon compliance with the terms
of this Final Judgment, to effect, in whole or in part, any proposed
divestitures pursuant to Sections IV or V of this Final Judgment, defendants or
the trustee, whichever is then responsible for effecting the divestitures,
shall notify OAG of the proposed divestitures. If the trustee is responsible,
it shall similarly notify defendants. The notice shall set forth the details of
the proposed transaction and list the name, address, and telephone number of
each person not previously identified who offered to, or expressed an interest
in or a desire to, acquire any ownership interest in the businesses to be
divested that are the subject of the binding contract, together with full
details of same. Within ten calendar days of receipt by OAG of notice, OAG may
request from defendants, the proposed Acquirer, or any other third party,
additional information concerning the proposed divestitures and the proposed Acquirer.
Defendants and the trustee shall furnish any additional information requested
from them within ten calendar days of the receipt of the request, unless the
parties shall otherwise agree. Within 30 calendar days after receipt of the
notice or within 20 calendar days after OAG has been provided the additional
information requested from defendants, the proposed Acquirer, and any third
party, whichever is later, OAG shall provide written notice to defendants and
the trustee, if there is one, stating whether or not it objects to the proposed
divestitures. If OAG provides written notice to defendants and the trustee that
OAG does not object, then the divestitures may be consummated, subject only to
defendants’ limited right to object to the sale under Section V of this
Final Judgment Absent written notice that OAG does not object to the proposed
Acquirer or


 


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upon objection by OAG, a divestiture proposed under Section IV or Section V
may not be consummated. Upon objection by defendants under the provision in Section V,
a divestiture proposed under Section V shall not be consummated unless
approved by the Court.


 


B.            Until one year after any divestiture
required by this Final Judgment has been completed, defendants shall preserve
all records of all efforts made to preserve the business to be divested and
effect the divestitures.


 


VII.         RETENTION OF JURISDICTION


 


Jurisdiction is retained by this Court for
the purpose of enabling any of the parties to this Final Judgment to apply to
this Court at any time for such further orders and directions as may be
necessary or appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any violations
hereof.


 


VIII.        ATTORNEYS’ FEES AND COSTS


 


Plaintiff is awarded the amount of $45,000
for reimbursement of attorneys’ fees and costs incurred by Plaintiff in this
matter for all work performed up to entry of this Final Judgment.


 


IX.           TERMINATION


 


Unless this Court grants an extension, this
Final Judgment will expire upon the fifth anniversary of the date of its entry.


 


X.            PUBLIC INTEREST


 


Entry of this Final Judgment is in the public
interest.


 


 


	
   

  	
   

  	
  DATED
  this           day of      ,
  200   .

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  United
  States District Court Judge

  
					



 


[ILLEGIBLE]


 


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