Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 75

                                        -159-                                         
          agreement.108  See Exhibit 173-J, J001736.  Mr. Geary testified             
          that he wanted to make it clear that the manager (i.e., Mr.                 
          Lerner) consented to the transfers “because they were what was              
          being planned.”  Before closing on the transaction with CDR, Mr.            
          Lerner executed a consent giving effect to Mr. Geary’s comments.            
          The consent was predated “____________, 1996.”109  We infer from            
          Mr. Geary’s comments and this consent that there was an                     
          understanding on the part of Mr. Lerner that Generale Bank and              
          CLIS would exercise their put rights at the earliest possible               
          point, on December 31, 1996.                                                
                 iii.  Negotiation and Drafting Process                               
               Petitioner suggests that the “intensity and duration of the            
          negotiations” between the Ackerman group and CDR connotes                   
          substance to the banks’ purported partnering with SMP.  In                  
          support of this suggestion, petitioner points to the numerous               
          drafts of the letter agreement, the side letter agreement,                  
          supplementary terms, the exchange and contribution agreement, the           



               108 Mr. Geary’s comments were faxed to Mr. Lerner and his              
          representatives at Shearman & Sterling.                                     
               109 When questioned about the date on the consent, Mr. Lerner          
          testified that the consent was part and parcel of the banks’ put            
          rights.  “It allowed them to implement the put if it were                   
          exercised.  Notice it was undated.  And as part of the                      
          implementation of the put, if they were to exercise it, it was              
          requested that I sign this.”  When pressed about the “1996” date            
          on each of the consents, Mr. Lerner testified that “I would say             
          it’s undated.”                                                              





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