Fwd: PRIVILEGED & CONFIDENTIAL

B

To

jeevacation@gmail.com

Jeffrey,

Fyi. Please see the attached.

Yvonne Berger / Executive Assistant to Mr. Wechsler
IMAX Corporation / Ph: [REDACTED] / Fax: [REDACTED]
[REDACTED] / [REDACTED]

J

To

Brad WechslerHalperin, Alan S

my preference , 1 no pik interest on note. 2. terms of put should be fixed price, rather than market. i prefer full recourse,note, . 24 to 48 months, buyer can assign purchase obligation. . brad should pay for put,

EFTA00932863

B

To

jeevacation@gmail.comBrad Wechsler

Cc

Bronstein, Richard JLakhdhir, David K

By copying Rick, I am asking for him to weigh in. Thanks. Alan

Alan S. Halperin I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3313 (Direct Phone) j (212) 492-0313 (Direct Fax)

J

To

Bronstein, Richard.

I suggested no pik , full recourse put below purchse that he buys, . 25%.

EFTA00932862

Rick, if the trust were to enter into a common interest agreement and sell leon a 5 % interest is it your view that there would be sales tax on the sale of the interest. . ? its more like an Ilc or corp , than tangible?

B

To

jeevacation@gmail.com

No sales tax because the underlying asset is an intangible, i.e., an interest in Phaidon Global LLC, so an sale of an individual interest is a sale of an intangible. Different answer if the undivided interest relates to tangible assets (e.g., art).

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell) (212) 492-0744 (Direct Fax)

J

To

Bronstein, Richard.

understood, what do you think of the fixed price put below purchase price. . and that brad pays for it , he should also pay real interest , and full recourse note are you ok with 25% below purchase price

B

To

jeevacation@gmail.com

I'm not sure there is any difference between (a) 25% cash plus 75% nonrecourse note and (b) 100% cash and recourse note with put at 75%. Either way, I would prefer more than 25% exposure to buyer.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell) 2l2 492-0744 (Direct Fax)

J

To

Bronstein, Richard

what do you suggest

B

To

jeevacation@gmail.com

Brad W pays 1/3 to 1/2 cash plus nonrecourse note, put after two years at FMV, put expires after five years. I would rather have no put at all, but apparently Ressler (all cash) insists on it, so Brad would have it, too.

Frankly, we can dress the transaction up all we want, but I think the IRS will not approve the transaction in any event, on audit they will be skeptical and believe that there is an understanding that LDB will take care of the buyers and they will believe that he and his wife want to keep the business (and the facts will show that they stayed involved and didn't reduce their time commitment at all) , and we will face an ugly choice between settling by giving up 40-60% of the loss or going to Tax Court, which will result in an embarrassing article in the Wall Street Journal.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell)

EFTA00932861

(212) 492-0744 (Direct Fax)

J

To

Bronstein, Richard J

if it were publicly traded stock, wash sale rules would apply, and be clear. even you had every intention of buying it back after 30 days, would you still be concerned. is there a way that you feel comfortable.

B

To

jeevacation@gmail.com

I understand the technical arguments, which are not so bad, but the concern comes from the facts that LDB doesn't really want to get out and will stay involved and he is not dealing with unrelated persons, he is dealing with an employee and his brother-in-law, neither of whom really want to own this business, they are doing this only because LDB asked them to do this. Plus if the business increases in value and LDB buys it back at FMV, then he will give up some or all of the tax savings in the repurchase price. So he is taking risk for a benefit that he might not get to keep.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone)I(917) 453-4387 (Cell) (212) 492-0744 (Direct Fax)

J

To

Bronstein, Richard J

I love a good argument bust want to make sure you see it the same way . When I am in New York I'll come by with a bagel

B

To

jetom@gmail.com

I would hope that we could have a discussion and even disagree without it being an argument ;-)

But I'll take the bagel anyway.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell)

J

To

Melanie Spinella

please read the whole page

Forwarded message

From: Bronstein, Richard J
Date: Sat, Dec 12, 2015 at 6:30 PM
Subject: RE: PRIVILEGED & CONFIDENTIAL
To: "jeffrey E." jetom@gmail.com

I would hope that we could have a discussion and even disagree without it being an argument ;-)

But I'll take the bagel anyway.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell)

From: jeffrey E. leeyacationagmail.com> Sent: Saturday, December 12, 2015 2:36:43 PM To: Bronstein, Richard J Subject: Re: PRIVILEGED & CONFIDENTIAL

I love a good argument bust want to make sure you see it the same way . When I am in New York I'll come by with a bagel

On Saturday, 12 December 2015, Bronstein, Richard J • > wrote: Same view wth or without Richard. I think that time commitment understanding came from Brad W, I assume he got it from Leon but I don't know for sure. If business continues down, then Leon is just getting a timing benefit (assuming that write-off comes before he dies). How much is that worth?

We are for sure on the same team, everything is based only on what I believe to be Leon's best interests, please don't take differing views as suggesting anything else.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell) (212) 492-0744 (Direct Fax)

From: Jeffrey E. jeevacation@gmail.com Sent: Saturday, December 12, 2015 1:30:51PM

EFTA00932860

To: Bronstein, Richard J
Subject: Re: PRIVILEGED & CONFIDENTIAL

i understand your concern. . however the greatest likelihood is that this business will continue its downward spiral. leon will also end up writing off the debt . please keep in mind that you and I are on the same team. , - we have not met. . I have great respect for your tax views . do you do many 1040 audits ? if brad did it all without richard„ same view. the time commitment that you referenced. did you get that from Leon?

On Sat, Dec 12, 2015 at 1:17 PM, Bronstein, Richard J < > wrote: I understand the technical arguments, which are not so bad, but the concern comes from the facts that LDB doesn't really want to get out and will stay involved and he is not dealing with unrelated persons, he is dealing with an employee and his brother-in-law, neither of whom really want to own this business, they are doing this only because LDB asked them to do this. Plus if the business increases in value and LDB buys it back at FMV, then he will give up some or all of the tax savings in the repurchase price. So he is taking risk for a benefit that he might not get to keep.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone)I(917) 453-4387 (Cell) (212) 492-0744 (Direct Fax)

From: jeffrey E. jeevacation@gmail.com Sent: Saturday, December 12, 2015 1:11:47 PM To: Bronstein, Richard J Subject: Re: PRIVILEGED & CONFIDENTIAL

if it were publicly traded stock, wash sale rules would apply, and be clear. even you had every intention of buying it back after 30 days, would you still be concerned. is there a way that you feel comfortable.

On Sat, Dec 12, 2015 at 1:06 PM, Bronstein, Richard J < > wrote:
Brad W pays 1/3 to 1/2 cash plus nonrecourse note, put after two years at FMV, put expires after five years. I would rather have no put at all, but apparently Ressler (all cash) insists on it, so Brad would have it, too.

Frankly, we can dress the transaction up all we want, but I think the IRS will not approve the transaction in any event, on audit they will be skeptical and believe that there is an understanding that LDB will take care of the buyers and they will believe that he and his wife want to keep the business (and the facts will show that they stayed involved and didn't reduce their time commitment at all) , and we will face an ugly choice between settling by giving up 40-60% of the loss or going to Tax Court, which will result in an embarrassing article in the Wall Street Journal.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell)

EFTA00932861

(212) 492-0744 (Direct Fax)

From: jeffrey E. jeevacation@gmail.com
Sent: Saturday, December 12, 2015 12:55:58 PM
To: Bronstein, Richard
Subject: Re: PRIVILEGED & CONFIDENTIAL

what do you suggest

On Sat, Dec 12, 2015 at 12:51 PM, Bronstein, Richard J < > wrote:
I'm not sure there is any difference between (a) 25% cash plus 75% nonrecourse note and (b) 100% cash and recourse note with put at 75%. Either way, I would prefer more than 25% exposure to buyer.

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell) 2l2 492-0744 (Direct Fax)

From: jeffrey E. leevacation@gmail.com>
Sent: Saturday, December 12, 2015 12:37:13 PM
To: Bronstein, Richard.'
Subject: Re: PRIVILEGED & CONFIDENTIAL

understood, what do you think of the fixed price put below purchase price. . and that brad pays for it , he should also pay real interest , and full recourse note are you ok with 25% below purchase price

On Sat, Dec 12, 2015 at 11:02 AM, Bronstein, Richard J < wrote: No sales tax because the underlying asset is an intangible, i.e., an interest in Phaidon Global LLC, so an sale of an individual interest is a sale of an intangible. Different answer if the undivided interest relates to tangible assets (e.g., art).

Richard J. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) I (917) 453-4387 (Cell) (212) 492-0744 (Direct Fax)

From: jeffrey E. jeevacation@gmail.com
Sent: Saturday, December 12, 2015 9:39:59 AM
To: Bronstein, Richard.'
Subject: Re: PRIVILEGED & CONFIDENTIAL

I suggested no pik , full recourse put below purchse that he buys, . 25%.

EFTA00932862

Rick, if the trust were to enter into a common interest agreement and sell leon a 5 % interest is it your view that there would be sales tax on the sale of the interest. . ? its more like an Ilc or corp , than tangible?

On Fri, Dec 11, 2015 at 5:01 PM, Bronstein, Richard J <> wrote:

I agree no PIK interest is best. I also prefer full recourse, I have told that to Brad W. We have also said that cash/recourse should be at least 50% of purchase price to avoid option treatment.

I don't really like fixed price put, it makes it even less like a sale, but I would be curious to know what fixed price you have in mind. If it is not substantially higher than the purchase price, it might look like a financing.

We have indicated that the put should not be exercisable for 2-3 years, so it makes sense to me that the note should be longer, like 5 years.

Assignment is not relevant, Brad W is signing and closing at the same time.

Payment for put should be not necessary if put is FMV.

Richard 1. Bronstein I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3744 (Direct Phone) 1 (917) 453-4387 (Cell) (212) 492-0744 (Direct Fax) www.paulweiss.com

From: Halperin, Alan S

Sent: Friday, December 11, 2015 4:56 PM
To: jeffrey E. jeevacation@gmail.com; Brad Wechsler
Cc: Bronstein, Richard J < >; Lakhdhir, David K <
Subject: RE: Re:

By copying Rick, I am asking for him to weigh in. Thanks. Alan

Alan S. Halperin I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (212) 373-3313 (Direct Phone) j (212) 492-0313 (Direct Fax)

From: Jeffrey E. [mailto:jeevacation@gmailcom]
Sent: Friday, December 11, 2015 4:33 PM
To: Brad Wechsler < >; Halperin, Alan S
Subject: Re:

EFTA00932863

my preference , 1 no pik interest on note. 2. terms of put should be fixed price, rather than market. i prefer full recourse,note, . 24 to 48 months, buyer can assign purchase obligation. . brad should pay for put,

On Fri, Dec 11, 2015 at 3:59 PM, Brad Wechsler < > wrote:

Jeffrey,

Fyi. Please see the attached.

Yvonne Berger / Executive Assistant to Mr. Wechsler
IMAX Corporation / Ph: [REDACTED] / Fax: [REDACTED]
[REDACTED] / [REDACTED]

please note