From: "Emad Hanna" To: "Jeffrey Epstein" <[email protected]> Subject: Lady K Date: Thu, 03 Jun 2010 19:18:06 +0000 Attachments: P6030129.JPG; P6030126.JPG; P6030128.JPG; P6030134.JPG; P6030135.JPG; P6030138.JPG; P6030141.JPG; P6030 I44.JPG; P6030 I43.JPG; P6030 I46.JPG; P6030147.JPG Jeffrey, Please see the below information Casey the boat captain has been overseeing this project and he along with Arran confirmed these additional repairs. Of the potential additional $ 35,000 of repairs the parts come to about $ 10,000 Thank you Emad Hanna Project Controller HBRK Associates PO Box 400 New York, NY 10150 Ph Fax EFTA00750567

From: brice gordon Sent: Thursday, June 03, 2010 2:43 PM To: Emad Hanna Cc: Gary Kerney; ; Rich Kahn; LS] Subject: LSJ: Lady K Emad Gene from Subbase contacted Arran in regard to issues outside of the engine refurbishment on Lady K. This morning Arran and I inspected the areas of concern. The Issues are: Prop shafts/log and bearings x2, this will require removing 2 x 3ft sections from the hull. Rudder posts and bearings x2 Wet manifolds x 4, these are manufactured on sight out of Stainless steel. I have attached photo's of the problem area's. Estimated cost at this time for the above additional work is around $35,000.00 Arran is working with Gene to firm up Estimates and will forward to you Friday. Please note these repairs where unforeseen, it was not until the prop, rudder shafts and engines where removed that these issues became apparent. I have given Gene the approval to move forward with parts orders to get this completed as soon as possible. Most of the additional cost will be labor, as stated in the original estimate. Brice EFTA00750568