To: Jeffrey EpsteinBeevacation©gmail.com]
From: David Stern
Sent: Fri 9/11/2009 9:27:27 AM
Subject: F Update

Below same summary as yesterday but with confirmed speaking engagements included.

Current Liabilities: £ 4,684,436 (completeness not confirmed, no tax status available) Might be able to negotiate to defer / convert into 10-year notes (approx. £ 2.5 million)

## Business Model:

Use Mothers Army brand (MA) in all activities.

(MA stands for integrity, consciousness, morals, etc)

## Revenues:

Current deals, not signed — DS reviewed contracts:

- Handmade Films for animation of children characters:

	- o [ ] Executive Producer for series "Tea For Ruby": 15% of producer fee, 
7.5% of Handmade fee

	- o [ ] Series "Tea for Ruby": £125K upon signing against 5% of production 
budget; 30% adjusted gross of all revenue

	- o [ ] Series "Little Red": £75K upon signing against 2.5% of production 
budget; 30% adjusted gross of all revenue

	- o [ ] Series Nat Geo Kids: £15K per episode; 15% producers fee; 30% of 
adjusted gross

	- o [ ] Option to acquire 500,000 shares in Handmade Kids Inc. (to be 
established) as non-executive Director

Current deals, not signed, DS is still waiting for contract drafts to verify:

-

- Book "Mothers First" to be published by Atria: US$500k milestone based plus unknown royalty

- Star Branding (Hilfiger) & Castle Hill (manufacturer): fashion line with Tommy Hilfiger support. Castle Hill guarantees sale of US$18m over 3 years of which F. royalty is 8% of which 40% goes to Star Branding (note: bad financial deal but F states that Tommy Hilfiger wants to create TV show staring F and himself about the launch of this label - this would put F. back on screens of US households)

## Revenues: (cont.)

Speaking Engagements Confirmed Bookings:

Gilda's Club Cancer Benefit
Friday, March 19, 2010
Davenport, Iowa
Fee: US$45K gross/US$35K net plus US$7500 travel

Michigan State University — Women in Leadership
Friday, April 16, 2010
Detroit/Lansing, Michigan
Fee: US$40K net plus $7K travel

Women for Women Annual Power of the Purse Luncheon
Wednesday, May 5, 2010
Greenville, NC
Fee US$25K minus 12% plus roundtrip air UK/US

Celebrity Series/Washington Speakers Bureau Monday May 10, 2010 Denver, Colorado Fee: US$50k + hotel and meals — does not include air /ground travel

Discussions held but no contracts, nothing verified:

- Handmade/United Business Media merchandise: US$ tbd

- QVC selling products of F: US$ tbd

- Frozen Food with Findus Group: US$ tbd

- TV show Pony Express in association with Target: US$ tbd

## Structure:

Mothers Army Inc or Ltd (need to check tax / JEE preference) 49% F equity / 51% JEE F Salary on US$250.000/year Receive income as loan: pledge stock

<u>Initial Basic Set Up: (fire all current staff)</u>
Office in New York (or London)
1 Managing Director (identified by DS)
1 PA

## Structure: (cont.)

<u>Estimated Basic Budget p.a (not disucsed with F.) : US$ 1.1 million</u>
F Salary US$250.000
MD Salary US$170.000
Legal US$200.000
Travel US$300.000
Office costs incl PA: US$150.000
Misc : US$30.000

Note: question is whether the office and her location should be in NYC. Would make sense because UK market is poison for her and business is in US. Travel costs would be exchanged for NYC living cost (rent etc)

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