Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 292

                                       - 59 -                                         
               E.  Exercise of the Put                                                
               On December 26, 1996, Mr. Geary, pursuant to the                       
          instructions of Mr. Jouannet, sent facsimiles to William Ponce,             
          Gary Mazzola, and Celia Murphy at Chase Manhattan Bank, and to              
          Mr. Lerner, transmitting notices from CLIS and Santa Monica                 
          Finance, B.V., exercising their rights under the side letter                
          agreement and the deposit account agreement.35  The $5 million              
          that Somerville S Trust had deposited with Chase Manhattan Bank             
          was duly paid to CLIS and Generale Bank.  Per an informal                   
          agreement between Rockport Capital and Somerville S Trust,                  
          Somerville S Trust became the purchaser and owner of the                    
          preferred interests.                                                        
          VI.  Film Rights Contributed to SMHC                                        
               A.  Film Titles and Development Projects                               
               The following film titles and development projects were                
          listed in Schedule 1.6(b) of the exchange and contribution                  
          agreement as assets of SMHC:                                                
          U.S. Video Film Rights                                                      
          1.   Alley Cat                    7.   Battle of the Valiant                
          2.   Astro Zombies                8.   Beast, The                           
          3.   Auditions                    9.   Blood Brothers                       
          4.   Avenger                      10. Blood Castle                          
          5.   Banana Monster               11. Cardiac Arrest                        
          6.   Battle of the Last Panzer    12. Carthage in Flames                    

               35 Mr. Geary exercised Generale Bank’s and CLIS’s rights               
          under the side letter agreement and deposit account agreement on            
          Dec. 26, 1996; however, the put period did not commence until               
          Dec. 31, 1996.                                                              





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