Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 296

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          selected the “U.S. Video Film Rights” to the 65 film titles and             
          the rights to the 26 development projects that were listed in               
          Schedule 1.6(b) of the exchange and contribution agreement.                 
               4.  Assignments Before the Contributions to SMHC                       
               As described below, a number of documents were executed                
          providing for transfers and assignments of the 65 film titles and           
          26 development projects that Mr. Peters had selected.                       
               According to a document entitled “Assignment” dated as of              
          December 10, 1996, Alpha assigned and transferred to CLIS:                  
          (i) The “U.S. Video Film Rights” to 15 film titles; and (ii)                
          eight development projects for “$0.25 and other good and valuable           
          consideration.”39  According to this document, Alpha made no                
          express or implied warranties or representations with respect to            
          these assets.                                                               
               According to a second document entitled “Assignment” dated             
          as of December 10, 1996, Epsilon assigned and transferred to CLIS           
          18 development projects for “$0.25 and other good and valuable              
          consideration.”  According to this document, Epsilon made no                
          express or implied warranties or representations with respect to            
          these assets.                                                               
               According to a third document entitled “Assignment” dated as           
          of December 10, 1996, EBD assigned and transferred to CLIS the              

               39 The assignment, including its attached schedule, did not            
          define the term “U.S. Video Film Rights”; it identified the films           
          only by titles.                                                             





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