EMAIL DETAILS

Hey, below is my response to what Eric sent over yesterday. He took a lot
of time to put it together, so I wanted to take the time to think about it
and give him a detailed, thoughtful, respectful response which I hope I was
able to do below.


I love Eric, I truly do, but the only things that matter in this type of
agreement are shared objectives and shared incentives. These two things
have to be right on both sides or you'll never have a successful
relationship.


Let me think about it some more and we can address after Thanksgiving.


Best,


Neil


----------------------------------------------------------------------------
--------------

Neil Callahan

Rosemont Seneca

401 Greenwich Street, Suite 400 | New York NY 10013 | 212-933-9965 |
212-796-4037

1010 Wisconsin Avenue, Suite 705 | Washington DC 20007 | 202-333-1880

917-945-9516 (mobile)

866-749-8879 (fax)


From: Neil Callahan [mailto:ncallahan@rosemontseneca.com]
Sent: Monday, November 22, 2010 7:51 AM
To: 'Eric Schwerin'
Subject: RE: Draft Agreement


Hi Eric,


Thanks for pulling this together and putting what we discussed on paper so I
could understand it better.


I think the three most important things about an agreement like this are:
1. Define clear objectives, 2. Align incentives, 3. Define details of how
the agreement is managed and governed. So I'll put my feedback into those
three buckets.


1. Define clear objectives:

a. It's not stated clearly but I interpret it as


i. My goal is to be an employee of RSP


ii. There is no path to partnership

b. Both of those are opposite to what I am looking to do and over the
past 8 months I've been behaving and contributing in an opposite fashion, so
it goes against the spirit of what I thought we were working towards

c. This reads like a franchise / independent sales agreement - which
is fine if someone is interested in that role and goes against what you said
of you only want people to carry one business card - no one could make a
living under this agreement and only carry one business card. So those
desires are in conflict with one another.

d. Scope


i. It's not clear if this is supposed to cover RSP's "DC" business or
be an agreement with RSP overall


ii. Also, defining terms with things that do not exist - Global Risk,
Analytics - I am not sure how that is done or how that could be managed, so
I would find another way to account for future state things and how I would
or would not participate in them

e. Also, my most pressing short term need is cash flow and it's
something we've talked about alot, and this agreement does not suggest any
ideas on how to address that objective


2. Aligned incentives:

a. The way the proposal reads, I have all the risk and RSP has all the
upside


i. I am 100% responsible to generate the pool of money for me to
participate in and 80% to 90% of that goes to RSP. That does not incent me
to generate any business for RSP because it's not worth my time or effort do
so - too much risk for too little reward.


ii. I don't get any benefit of what anyone else does within RSP, so
there is no incentive to help anyone or collaborate with anyone

1. You mention the White Elephant type things, but there is no mention
of how or if I'd participate in them

b. 10% of a fee for working on a client


i. My incentive would be to do as little of possible and spend only the
time I equate to 10% and less if you cannot measure it

c. There is no mechanism to understand what's too little, what's too
much and what's just right, so I'd be incented to do what's too little

d. Capped "salary"


i. The way this is written with 80-90% of any new client going to RSP,
you'd be crazy to cap it, so that does not make any sense from your
perspective


ii. Also, if you do cap the "salary", once I hit that mark, I have no
incentive to get any additional business or work on any additional business,
again, not a good idea

e. Contributions to-date


i. This agreement is written as if you just got my resume from a
headhunter, it values my contribution over the last 9 or so months at zero.


ii. With all I've done in terms of strategy, marketing,
organization/operations, business development, and client service - I'd
value that at the market rate of $250-300k annualized. So on the low side
it's at around $187.5k


iii. We also had an agreement in place from March - June where I have
50% of salary accrued (based on a $250k) base for those months and that has
not been honored or addressed


iv. So valuing that at $0 I think is not the message you are trying to
send, but that is how the document is written


3. Managed & governed

a. Once the first two items above are defined, then we'd put in place
more detail on defining terms, etc.

b. We'd also specify payment cycles, etc.


Let's try and talk about it later today, but for the most part, I could not
consider such an agreement in its current form, there is still a lot of
ground to cover in my mind if we want to get an agreement like this done.


Best,


Neil


----------------------------------------------------------------------------
--------------

Neil Callahan

Rosemont Seneca

401 Greenwich Street, Suite 400 | New York NY 10013 | 212-933-9965 |
212-796-4037

1010 Wisconsin Avenue, Suite 705 | Washington DC 20007 | 202-333-1880

917-945-9516 (mobile)

866-749-8879 (fax)


From: Eric Schwerin [mailto:eschwerin@rosemontseneca.com]
Sent: Sunday, November 21, 2010 2:40 PM
To: Neil Callahan
Subject: Draft Agreement


Neil-


Take a look at the attached draft. This is pretty much a written version of
what we talked about this week. I hate these things because they sound so
legalistic and have to anticipate the worst, but hopefully you get the
spirit of it. And, that is that we look at this as being a temporary
measure and a way to grow our business, compensate you fairly and raise all
boats at the same time. I think there are variety of ways to get you to a
salary of $250,000 a year fairly quickly and I think at that point we'll
have a better sense of the business going forward and more confidence to
figure out where we should all be focusing our time and generating the most
income for RSP as a whole and for ourselves individually. Clearly if we are
still working off this model in a year then we have to revisit the current
business as a whole and none of us will be happy with where we are.


The way I look at it is that right now I want to double our current business
(go from 4 to 8 Alt Inv Advisory clients and go from $1m to $2m in corporate
advisory revenue (we are just under $1m now)). At that point under this
type of model I think everyone will be at the levels they want/need to be
(the be able to "pay my mortgage" level) and then we'll also have had the
time to see where the additional "white whale" revenue is ("Security
Technology", "Analytics", "Real Estate", or something else) and re-calibrate
going forward.


FYI, it looks like we have a fifth alternative advisory client already. So,
that will already count as revenue above the "baseline" described in the
agreement. It is a real estate fund that looks like it will start December
1st (a little different that Rosemont Realty and not a conflict per Devon).


Finally, the top priority for us as far as you're concerned would be to get
a CRM/Sugar system up and running quickly. I would find that more important
than dealing with things like YBrant. Let's discuss prioritizing things
like that once you have had a chance to review the attached. It'd be great
to get this finalized and get on with growing the business and making some
cash! My contractor is getting ansty and ready to work on his next project!


Thanks for bearing with this process.


Best,


Eric

--
Eric D. Schwerin
Rosemont Seneca Partners
(202) 333-1880
eschwerin@rosemontseneca.com