EMAIL DETAILS

All right, Gents, let me give you a heads up of my meeting with
Jonathan last night. Nice to have such a great and long time buddy!

Jonathan has put down what he and I discussed a few days ago into a 7
pager in Chinese to be presented to Super Chairman today when he flies
to HK to see him in person to final confirm things before presenting
the proposal to you two in Wash DC. After all nego and confirmation
from SS in HK Rock will right away translate the piece into English
for my review and edits. I think I will be able to send the Eng
version to you over the weekend before Jonathan and I fly to DC.

Here is the gist of the proposal and upon final nego or confirmation
with SS today Jonathan will discuss in greater detail with you in DC:

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A PE Fund; 2% annual management fee. Carried: 20%.

Fund I size: USD300 million.

Fund I will have a RMB fund and a USD fund with a size of USD150
million, respectively.

Fund I will be managed by some key Bohai team members who plan to
leave together with Jonathan and the team will of course be headed by
Jonathan in our new fund management co.

SS himself to commit USD50 million equivalent RMB to the local RMB
fund and another USD50 million to the USD fund while Jonathan and his
team to commit (through raise) USD50 million or its equivalent RMB
either to the USD Fund or the RMB Fund or both mixed. (Jonathan told
me in private he had that USD50 million commitment from investors
already once he quits Bohai.)

Proposed owership structure of the FMC: SS 40%, Jonathan and one or
two of his senior team members 30%, and we three 30%. (Isn't this nice
and sweet?!)

FMC board directorship: SS 3 seats, Jonathan 1 seat; management team 1
seat, and we 2 seats. 2/3 majority to approve major desions presented
to the board of FMC.

FMC: Chairman SS ir his appointed guy. President Jonathan.

IC: 2/3 IC members majority vote to aprrove an investment in a project.

Management team incentive on carried; 15% of the carried. Jonathan
himself though being president of our FMC but as a shareholder of FMC
won't share with management team on the 15% of the carried but will
share with us the 85% of the carried according to the FMC ownership %.

SS, Jonthan and team, and we based on our best effort to raise the
remaining USD150 million. We three's FMC owership will not be reduced
or changed no matter we have succeeded in helping the fund raise. What
SS and Jonathan ask from us is the following and I confirm this many
times with Jonathan: 1. Make the FMC look internationalized with
guolos' faces on the board and ownership structure (of course guilos
whom SS and Jonathan can get along with and can trust), 2. Open as
many doors as possible in the western world for this very famous Bohai
professional team with impressive track to present our case to the LPs
(they don't need us to do it in China or HK where SS and Jonathan know
almost every LP), and 3. Lastly, they want us to join some of the
meetings in HK and China they arrange when talking to high profile LPs
during the road shows.
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This might not happen but if it does, our worst case scenario as I
reckon is that SS might want to claim more than 40% say maybe 50% or
60% and we three and Jonathan might have to be reduced to 25% (or 20%)
respectively. But so what? Even that, it's great and sweet enough for
us judging from the no money and much smaller efforts we need to
commit and make for the fund raise. I honestly don't think SS will
counter propose we three only get 15%.

Gents, Share with me my big big laughters and joys!!! Let's wait for
Jonathana feedback after his meeting with SS.

Best,

Michael