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Following up on our earlier emails last week, here are my "take it or leave it" points I suggest we propose to John.

1) RSP 50%, JD 25%, NC 25%.
2) Dilution for a fundraising partner is shared evenly; dilution for an operational partner comes out of JD/NC share.
3) Going forward there needs to be unanimous approval by the management committee (made up of JD, NC, DA and ES) for the hiring of any marketers and approval of any fees or equity given to them. And marketers shouldn't begin raising money for us until we have a signed agreement with their broker/dealer. The agreement process will be handled by RSP principals - that is, one of us.
4) There will be a monthly call of the management committee to focus on finances of the fund and expenses incurred (including any personal expenses that people expect reimbursement for).
5) $300K seems too high for me in salary reimbursement. I think $200K is more reasonable - and conforms to the 60/40 split if that is the argument. Remember we agreed to a 60/40 management fee split when Laura was going to be a part of it. Using a $300K salary over five years it actually ends up being a 65/35 split so it has moved to John and Neil's advantage and Laura is no longer part of the equation. $200K over five years would make the management fees split 60/40 and is inline with our agreement. FYI, $250K in salary makes it 62.5/37.5.
6) Devon - not sure if we can do this, but ideally, all Admin functions should be run out of NY - that is, communication with investors, capital call management, etc. I don't have a problem with the communications coming from John but in coordination with us and with approval. Perhaps, this coordinating function could be performed by Neil to some extent as a liaison between John and someone sitting in the NY office.

Thoughts?

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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