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CDR and CLIS represented and warranted: (1) SMHC had an
authorized capitalization consisting of 200 million shares of
capital stock, of which 60 million shares of common stock, par
value $1.00 per share, were issued and outstanding; (2) the
aggregate amount of capital CLIS contributed to MGM Holdings from
the date of the creation thereof to the date of MGM Holdings’s
liquidation equaled approximately $605 million; and (3) CLIS had
received no payment of principal on the $79 million receivable
and had not written down any of the debt for accounting or tax
purposes. Generale Bank also represented and warranted that it
had received no payment of principal on the $974 million in
receivables and had not written down the loans for accounting or
tax purposes. CDR retained control of SMHC’s tax return filing
obligations for all taxable years or other taxable periods ending
on or before December 31, 1996.
On December 12, 1996, White & Case faxed to Mr. Lerner and
his associates Schedules 1.6(b) and (c) to the exchange and
contribution agreement and a revised deposit account agreement.
Schedule 1.6(b) lists the “U.S. Video Film Rights” to 65 films
(identified by title only), the rights to 26 development
projects, and the rights to the Carolco preferred stock and
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