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Matt-

Good talking to you earlier this week. I am confident we can find a mutually beneficial way to work together over both the short and long term.

As we discussed, from our point of view and from our recent experiences, the ideal relationship would involve some mix of retainer, percentage of sales and equity investment. A straight percentage of sales relationship usually doesn't work well as we find that neither side will prioritize it high enough if there is not some retainer dollars going out and coming in on both sides. At the same time the equity investment piece should hopefully be important to each of us. As we discussed, the Rosemont Solebury Fund would like to consider making a co-investment in the next round. As an investor, it is a lot easier for us to promote SmartSynch than if it is a straight client/consultant relationship. And hopefully, it will be beneficial to you as well to have the Rosemont fund as even a small strategic investor in SmartSynch for a variety of reasons.

As far as the scope of work going forward, I think it makes sense to focus on a few projects that hold the potential for the biggest sales and the best partnerships long term for SmartSynch.

In the near term, we believe there are promising opportunities we have been following up on with Wal-Mart (our team will be going down to Bentonville on Monday to meet with their Sustainability Team) and Comcast (Daniel Herscovici, who is VP for Strategy and Business Development would like to set up a time to talk to you further). In addition, NY Governor Paterson has expressed an interest in meeting with you to discuss some opportunities to deploy smart meters in the state. We would also like to do things like include SmartSynch in a small networking dinner we are in the process of putting together in September around the Clinton Global Initiative meetings in New York. Getting you up to NY for an event like that would be a far more efficient use of your time in that it will allow you to meet a number of potential partners at one time rather than scheduling one-off trips for one meeting. This could also be a good opportunity to get you in front of Governor Paterson as well if we haven't been able to do so before then.

This immediate focus would not preclude us from following up with others that we have already reached out to on your behalf, but obviously we want to focus on the ones above where there seems to be the most near term promise. I think we can still be helpful with Google, University of Delaware, IBM and others, but we should immediately focus on the near term contacts above and move down the list as we are successful or eliminate one of them if it shows less promise than we thought. In addition, there are number of international opportunities that have been presented to us in the Smart Grid space and it would be worth discussing them as those could hold some real promise long term but obviously that takes a greater time commitment so we would only want to focus on the biggest ones.

Based on the above we would propose that for the remainder of 2010 that our monthly retainer be $7500 a month and that we receive a percentage of sales commensurate with your standard re-seller agreements. This will allow us to focus on the contacts we have made on your behalf to this point and by the end of the year we will know if this model works well for both of us. Hopefully, we will also know if the status of any investment from the Rosemont Solebury co-invest fund by then as well.

We appreciate your interest in being flexible. I know we both know that there is real potential for success if we continue the relationship and hope this is a model that is economically beneficial for both of us. In addition, we enjoy working with you and Stephen and the rest of the team.

Let us know your thoughts after you are able to review and discuss internally.

Best,

Eric


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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