EFTA00128660¶
12/18/01 15:49 FAX¶
WinTel Corporation 600 Madison Avenue 25th Floor New York, NY 10022¶
December 18, 2001¶
VIA FACSIMILE¶
Mr. Jeffrey Epstein¶
457 Madison Avenue¶
4th Floor¶
New York, NY 10022¶
Dear Jeffrey:¶
Attached please find a copy of the term sheet sent to you on December 12 (see Exhibit A). Please note the first and second source of repayment. The first being the Treasuries with the loan only made if the Treasuries were in an acceptable form to WinTel and our bridge provider. This would only be executed if the Treasuries were held in an account that we were able to assign and lien the Treasuries. In my quest to acquire the company and in lieu of verifying the Treasuries’ position, I offered to put up a personal guarantee secured by my real estate, as a second source of collateral if the Treasuries were encumbered or the ultimate value of the collateral was deficient.¶
I shared with your in-house counsel, Jeffrey Schantz, that I would only make a personal guarantee if I verify that the Treasuries provided were in fact what was represented to us last week as available and unencumbered. Please review again the term sheet provided to you on December 12 to refresh your memory that we were dependent on a third party providing us securities in a good form that would allow us to borrow up to 95% of the availability of the face value. I understand from your comments last night and today you are highly disappointed. Please imagine how we feel, as we were trying to acquire a company in our industry using documentation from a third party, which as of now appears to be clearly fictitious. I apologize for the inconvenience and embarrassment caused to you and your firm. However, please remember my statement that I am not a fixed income expert; I was looking to you for guidance and clarity of the collateral. We were only last week provided the portfolio and yesterday provided documentation to verify the validity of the Treasuries represented by Century Capital S.A.¶
Attached please find a letter just received from Williams Management and Capital Group, Ltd. for your files (see Exhibit B).¶
Sincerely,¶
Laurence S. Zimmerman¶
Chairman¶
LSZ:bm¶
Attachments¶
EFTA00128661¶
☑ 003/004¶
TERM SHEET¶
EXHIBIT A¶
WINSTAR BRIDGE LOAN¶
• Loan - $15 million¶
- Term - Date of closing of Winstar acquisition on or prior to January 10, 2002
Consideration -¶
• Interest rate - 15%¶
- Equity - 3% of outstanding equity at closing (Founder’s Stock)
• $500,000 Fee¶
-
Security -
-
$130 million in U.S. Treasuries is presently being held at Williams Management & Capital Group Ltd. for the benefit of Wintel Telecom Holdings, Inc. evidenced by a custodial safekeeping receipt. A segregated portion of these securities, in the amount of $15 million, will be held for the benefit of Jeffrey Epstein or his designate.
Personal guarantee by Laurence S. Zimmerman secured by the following:¶
-
515 Park Avenue, 27th & 28th Floors, New York, New York - Appraised value $23,500,000 by Cushman & Wakefield (as of Nov. 2001)
-
0124 Coldstream Lane, Aspen, Colorado - Purchase price $10,900,000 (acquired Dec. 1998)
Current mortgage against 515 Park Avenue is $8.6 million¶
- Current mortgage against Aspen property is $5.5 million¶
Repayment - Proceeds of loan from the Primary lender (i.e., BONY) secured by the safekeeping receipt representing $130 million in U.S. Treasuries¶
- Funding Requirement - $15 million must be funded no later than December 14, 2001, no later than 12:00 P.M.
Agreed to and accepted by:¶
Laurence S. Zimmerman¶
Date¶
Jeffrey Epstein¶
Date¶