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I am sure you thought of it this way as well, but thought looking at it on paper might help.

$500,000 in retainers from Cayova would equate to $41,667 a month. If we felt we need to use some of that for others to work on it (e.g. Devon or Neil to work on this or also Paul has said that Rob could be helpful in Africa - Nevergole could help too) let's say we put NO MORE than $7,500 a month towards "others" which would leave us with $34,166 a month in extra "retainer" dollars to Advisors. That would mean that if we add RARE and no other clients (and keep our current ones), you could draw $69,000 a month from Advisors. $9,000 more than current.

At the same time, if there were a $500,000 loan to RSP Holdings (the BD Holding Company owned by you and I) - that would allow for you to draw an extra $31,250 a month for a year on top of whatever comes out of the Advisory business. If we decided to devote half of that money to the BD for any start-up costs, it would be an extra $15,625 a month. Both of these numbers would be direct to you. Based on current numbers, if we were deciding to add RARE only to the advisory business and keep all advisory income the same you could be drawing $82,250 a month. If we add Cayova under the scenario #1 above, you would draw $91,250. Or $66,625 if we decided to use $250,000 towards other expenses. Or $75,625 with Cayova. (I don't know that there are $250,000 in other BD expenses, just using it as an example if we wanted capital to "build out" the BD.)

I am not including any fees to you for a Board seat.

Sort of play numbers but thought this might help.

If we want to get to the point of doing some due diligence on Cayova, I think it would be good to bring some combination of Devon, Neil and Marc LoPresti in to look at docs, business plan, etc. When Paul and I talked last week he liked the idea of having LoPresti do the legal work for Cayova in the U.S. He said "I'd like to explore engaging the chap that Hunter mentioned that has the 10 person law firm that would be a quarter of the price of Sullivan and Cromwell."

FYI, the other thing to think about on the "risk" side aside from the $2m note is the liability as a member of the Board of a company with some many shareholders.

Let me know if you want me to look at the numbers in any different way.


Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com
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