<table><tr><th>From:</th><th>jeffrey E. &lt;jeevacation@gmail.com&gt;</th></tr><tr><td>Sent:</td><td>Friday, January 29, 2016 5:09 PM</td></tr><tr><td>To:</td><td>Melanie Spinella</td></tr><tr><td>Subject:</td><td>Fwd:</td></tr></table>

GOOFY<
=-------- Forwarded message --------
From: Yvonne Berger <>
Date: Thu, Jan 28, 2016 at 4:=5 PM
Subject:
To: "Melanie Spinella <>"
Cc: John Castrucci <> Joe Avantario <>
<> Richard Joslin <> "Jeffrey Eps=ein (jeevacation@gmail.com <mailto:jeevacation@gmail.com> )&q=ot; <jeevacation@gmail.com <mailto:jeevacation@gmail.com> =gt;

## MEMORANDUM

<table><tr><th>TO:</th><th>=AO</th><th colspan="3">Melanie Spinella =C2</th><th>=AO</th><th>=C2</th><th>CC: =AO</th><th>John</th><th>Castrucci</th></tr><tr><td></td><td>=C2</td><td>=AO</td><td>=C2</td><td>=AO</td><td>=C2</td><td>=AO</td><td>=C2</td><td></td><td>=AO Joe Avantario</td></tr><tr><td></td><td>=C2</td><td>=AO</td><td>=C2</td><td>=AO</td><td>=C2</td><td>=AO</td><td>=C2</td><td></td><td>=AO Rich Joslin</td></tr><tr><td></td><td>=C2</td><td>=AO</td><td>=C2</td><td>=AO</td><td>=C2</td><td>=AO</td><td>=C2</td><td></td><td>=AO Jeffrey Epstein</td></tr></table>

FROM: =AO Brad Wechsler

DATE: =AO January 28, 2016

Summary

## MEMORANDUM (cont.)

1. In 2015, based on 180 hour= of usage, the plane costs you approximately $3.4MM/yr (operating costs) w=th approximately $400K of interest costs. Debt amortization in 2015 was $1.5MM. Amount of debt outstanding on the pl=ne today is $19.6MM and the loan is due in September of this year. Last qu=rter, the fmv (actual sales) of a G-V was approximately $14MM. Today, the =verage asking price market is $13MM.

2. Currently the plane is reg=stered under Part 135 as part of chartering business which means all fligh=s "technically" can be business related, thereby maximizing deductions. Last year because of various non-complying =ctivities, 62% of the flights or 111 hours of the 180 hours flown were 135=flights. The balance of the hours were flown under Part 91. Ap=llo hours were 42 of the 180.

3. The alternative to Part 13= is to abandon the chartering business and fly solely Part 91. A numerical=after-tax analysis comparing 135 to 91 for 2015 shows net after tax costs of roughly $2.6MM under Part 135 and $3MM u=der Part 91. (This assumes all non-Apollo hours are non-business which may=be too conservative). If 20% more of Part 91 flights were considered =80 business" there would be additional after tax savings under Part 91of approximately $370K and the net after-t=x costs of Part 135 and Part 91would be a push.

4. The key "life-styl= difference" between 91 and 135 is that there are less rigorous pi=ot rest rules under Part 91.

5. Generally speaking the tax=position is stronger under 135.

6. As a point of information =he charter rate for a G-V today is around $7,500/hr excluding flight incid=ntals of $300K. Your 180 hours would have meant an all-in "chartering" cost without incidentals of a=ound $1.35MM.

7. There is a lot of underlyi=g detail and complexity which can be walked through (Jeffrey has received =etailed numbers). The family office's bottom-line recommendation: is to continue under Part 135 as that is (i) is like=y to have a moderately lower net out of pocket cost to you; (ii) provides =he strongest tax position, (iii) can reduce net costs further, if, and as,=the percentage of Part 135 flights goes up and (iv) makes your plane marginally more attractive to a potentia= purchaser.

8. Structurally, we would hav= plane ownership be held directly by Avioneta which would enter into a man=gement services agreement with Jet Aviation. Avioneta would be owned by you and Debra. Wells Fargo (initial trustee for=purposes of a failed 1031 and Rance (current owner of plane) would disappe=r.

## MEMORANDUM (cont.)

9. To us (and the experts) th=s is a close call but with 135 being the favorable route. Please note, how=ver, everyone is comfortable with reverting to Part 91. (Jeffrey's recommendation I believe).

Let's discuss.

please note

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