NY Strategy Group LLC ("NYSG") -

NY Strategy Group LLC ("NYSG") - Actions Explanation 1. Complete NYSG 2012 return with the following included: 1. a) III had already included in a) Write off S150k fee to III, included in "officer loans" b) 5385 fee paid to III (by reducing his payable to the company) 2. In 2013, III repays NYSG $600k, the balance of his loan 3. NYSG then pays to JE all of its remaining liquid assets (approximately S800k) in full satisfaction of his then 84,273k loan, with the balance forgiven. Agreement is prepared to reflect this. 4. On 12/31/2013 JE forecloses or buys NYSG stock from III for the 53,458,417 loan he had previously made to III to enable him to buy the stock 5. JE liquidates NYSG (2013 or 2014) recognizing a long-term capital loss of approximately 83,400k his personal income tax return - NYSG had erroneously reflected this S150k as "officer loan", a receivable, instead of an expense b) treating this as additional (taxable) compensation to • in 2012 2. loan payment, paid in full 3. cleans up the JE receivable from NYSG, giving JE the remaining liquid assets of NYSG in the process 4. with NYSG having no remaining assets, JE foreclosures on his 53,458,417 loan he had made to III to enable - to purchase the stock from Schantz (the NYSG stock was security for the loan). Because of the 12/31/13 transaction date, all flow through income for the year will inure to M• 5. JE receives virtually nothing against his cost of $3,458,417. EFTA01113312