RAICH ENDE MALTER & CO., LLP Certified Public Accountants 1375 BROADWAY NEW YORK, NEW YORK 10018 TEL: FAX: 212-944-5404 MEMORANDUM TO: EILEEN ALEXANDERSON FROM: THOMAS TURRIN, CPA RE: Foreign Disclosures — Phaidon acquisition September 28, 2012 Eileen, Leon's return will be most affected by the foreign disclosures since the various family trusts will own Phaidon. As you know, all of the Black Family trusts are "intentionally defective grantor trusts". All of the income and other tax attributes of the various family trusts are reported on Leon and Debra's joint personal income tax returns. Likewise, the various disclosures of investment and ownership of non-US investee entities will be reported directly on Leon and Debris personal returns. The summary of foreign disclosures (below) is based on the information that we have been discussing with Gregor Lindsay of PWC London and Brad Okun of Paul Weiss. Once the deal closes, we will review the foreign disclosure requirements in detail with tax counsel — most likely with Brad Okun at Paul Weiss. Form 926 — Return by a US Transferor of Property to a Foreign Corporation - This form reports the amount of the investment in the non-US investee, date of transfer, and other details of the investee entity. This filing is required for the year of initial investment and in years in which further contributions of capital are made (only if such investment is in excess of $100,000). This filing is only required in a year in which an investment is made in excess of $100,000. Form 5471 — Information Return of US Persons with Respect to Certain Foreign Corporations (Annual Filing) - Bidco UK will be a "controlled foreign corporation" (CFC) since it is 100% owned by the various grantor trusts as well as the LDB 2011 LLC. Leon, as grantor, will include form 5471 in his return annually for all years the trusts own Phaidon. The 5471 form discloses details of the foreign corporation including its balance sheet, i