United States' Motion to Exclude Expert Testimony of Plaintiffs'

Montgomery's membership interest for 215,000 shares of Solution6 (the 65,000 shares originally contributed by Montgomery backon 9/25/2001 plus the 165,000 shares acquired by Bemont afterits formation), AUD$13,000 and $150,000. After Bemont redeemedMontgomery, it again had a single member (BPB).Thereafter, during 2001 and 2002, BPB disposed of itsremaining assets: approximately $2.5 million of Australiancurrency, and 7.6 million shares of Solution 6 Stock.TAX CONSEQUENCESBased on the advice of their accountants, Coscia Greilich &Company LLP, Beal, BPB, and Bemont took the position that thetransactions described above had the following federal incometax consequences.Beal's formation of and contribution of property to BPB hadno tax consequences because on formation BPB was disregarded forfederal income tax purposes. Reg. 301. 7701-3 (b) (1) (ii). Therewere no immediate tax consequences to Beal upon execution of theswap agreements, aside from establishing Beal' s tax basis in theswaps. In particular, Beal' s basis in the two long swaps wasthe cost of the swaps, $202.5 million. IRC §1012. See CosciaGreilich & Company LLP Tax Opinion (hereinafter "Tax Opinion")at 63-64.- 7 -