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all the interests that TroMetro owned and held in the $81 million
receivable, the $150 million receivable, and the $79 million
receivable. In exchange, TroMetro received a right to receive 20
percent of all classes of stock of SMHC (or its successor),
exercisable by TroMetro any time after March 1, 2001 (the
TroMetro stock option).
B. Assumption Agreement
As of September 1, 1999, SMP, SMHC, and TroMetro entered
into an assumption agreement. Pursuant to this agreement, SMP
assumed SMHC’s obligation under the TroMetro stock option.
C. Transfer and Assignment of the Carolco Securities
On September 1, 1999, SMHC transferred and assigned to SMP
the Carolco preferred stock ($30 million face amount) and the
Carolco subordinated notes ($30 million face amount).
D. SMHC and Troma Merger
1. SMHC Merges Into Troma
As of September 1, 1999, Troma’s stockholders and board of
directors approved actions in connection with the issuance of
common and preferred stock to SMHC. As of September 2, 1999,
SMHC and Troma entered into a purchase agreement. Pursuant to
this agreement, SMHC purchased 1,070.6 shares of Troma common
stock and 400 shares of Troma Series B convertible preferred
stock in exchange for all the assets listed on Schedule 3.3 of
the agreement and $2.22 million in cash (the SMHC and Troma
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