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partnership for Federal tax purposes and would be formed with an
aggregate contribution of $20 million. After further
negotiations on the terms of the transaction, the attorneys for
both sides began distilling those terms into an exchange and
contribution agreement, a limited liability company agreement, a
deposit account agreement, and an advisory fee agreement.
4. Santa Monica Pictures, LLC, Is Formed
On December 6, 1996, SMP filed its certificate of limited
liability company. On or about December 10, 1996, SMP applied
for registration with the State of California for the purpose of
registering to transact intrastate business in California.
C. Final Agreements and Documents
On December 11, 1996, the parties finalized the agreements
that they had negotiated over the course of several months.
1. Side Letter Agreement
On December 11, 1996, Rockport Capital, CDR, Generale Bank,
and CLIS executed a side letter agreement pursuant to which
Rockport Capital irrevocably agreed to purchase, upon written or
facsimile notice, all the preferred interests of Generale Bank
and CLIS in SMP for a specified purchase price. Under the side
letter agreement, CLIS and Generale Bank could exercise the put
by giving written or facsimile notice during the period
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