<table><tr><th>From: </th><th></th></tr><tr><td>Sent:</td><td>Tuesday, May 24, 2011 1:10 PM</td></tr><tr><td>To:</td><td>jeevacation@gmail.com</td></tr><tr><td>Subject:</td><td>Re:</td></tr></table>

I am meeting Swanson again on Thursday. H=re is the state of play. In our meeting Saturday he was ok with 18% for 1 year (to dovetail wi=h theextended term of the first) with such security arrangements beside th= mortgage (new LLC or amended LLC operating agreement) as were acceptable =o you and TD.

I also mentioned a point or point and a half. If you agree, I t=ought this could fund an upfront fee for me.

He said he was concerned about renegotiating the existing subordination agr=ement between TD and Kosoy (it evidently took a long time) and wanted some=time to think through it and perhaps talk to TD. (The team dealing with hi= is in transition in part because TD is moving out the old Mercantile peop=e.) He also was agreeable to sharing a percentage of the profit which I l=kened to the deals he does with backers who earn a guaranteed return and S=%. He noted that he had put all the capital up and seemed to suggest a pro=rata alloocation based on your $10M compared to the amount he has in =net of what he borrowed out (We'll see what that looks like.) I tied that =o adding me or an entity as a member of the LLC which is also necessary gi=en the operating agreement provisions which we are considering.

He asked for some time to think things through and we are to meet again on =hursday late afternoon. I am sure he is considering his alternatives (if a=y) too.

He also wanted time to think about the issues I raised about the 11.0 operat=ng agreement (whether a new LLC or amending the existing operating agreeme=t.). These were requiring unanimous consent for: seeking bankruptcy protec=ion, adding new members, creating new debt, refinancing existing debt, or =urther amendment. The OA would also provide for his removal as a man=ger on default under either mortgage. An open point is whether unani=ity should be required to agree to a sale of the house. I was thinking set=ing an agreed value range. An entity (trust or other LLC) would beco=e a member with that percentage still under negotiation. I am sure he is also thinking about the percentage of the LLC interest to o=fer.

I asked about the existing LLC. He confirmed it was a single asset, single =ember LLC with no significant other debt outside of the ordinary course (m=intenance). The member is a trust fbo him and his wife. As you know, taxes= insurance and interest are reserved and TD would require the same for any=extended term. Dan expects some increase in real estate taxes next year (a=sessments come out over the summer).The 2010 tax appraisal is $7,497,000 v= $13,611,000 in 2008. He paid $20,800,000 in August 2007 (plus commission =ay $21,600,000.) He says he has had good results working with the appraise=s office. We'll see.

I asked him to involve his accountant about the income tax consequences of =ransferring the house to a new LLC or adding a member and also the outstan=ing liabilities and payables of the LLC. I have a follow up call with a bankruptcy lawyer today on the enforceabilit= of the protections we are discussing.

Swanson wants to close by the end of June.

Please let me know what you are thinking.

From: Jeffrey Epstein <jeevacation@gmail.com>
To: paul prosperi
Sent: Tue, May 24, 2011 7:10 am

news?

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