Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 276

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          these letters and summarizing the information and documentation             
          received.  On December 6, 1996, Mr. Wofford faxed to Mr. Lerner’s           
          representative, James M. Rhodes:  (i) The debt release and                  
          assumption agreement dated as of October 9, 1996, by and among              
          MGM Group Holdings, MGM, and Credit Lyonnais; and (ii) the                  
          certificate of amendment of MGM Group Holdings, changing its name           
          to SMHC.                                                                    
               B.  Negotiation and Drafting Process                                   
               At some point, Mr. Lerner, on behalf of Rockport Capital,              
          and Mr. Jouannet, on behalf of CDR, decided to move forward with            
          a transaction involving MGM Group Holdings.  Negotiations                   
          concerning this proposed transaction continued throughout October           
          and November 1996.  The law firm of White & Case, LLP,                      
          represented the interests of CDR during the course of the                   
          negotiation, drafting, and agreement process with the Ackerman              
          group.  Sean Geary was the lead attorney in White & Case’s                  
          representation of CDR.                                                      
               1.  Rockport Capital Confirms Its Interest                             
               On September 11, 1996, Mr. Lerner sent a letter to Mr.                 
          Geary, as counsel for CDR, confirming “the interest of Rockport             
          Capital * * * in MGM Holdings, Inc. * * * and the U.S. tax                  
          attributes which may relate to the direct and indirect                      
          investments by Credit Lyonnais, S.A., and * * * [CDR] in Metro-             







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