Subject: Re: Follow On Chafe/King Discussion
From: "Devon Archer" <[email-masked]>
To: "Eric Schwerin" <[email-masked]>
Cc: "Hunter Biden" <[email-masked]>
Date: Mon, 6 Dec 2010 19:35:04 -0500

Nice.

The answer is that we'll start out of the gate doing $20's and $30's
but as we gather assets we want to move up market as the work load's
the same on the larger properties but the fees are static percentages
and obviously larger.  Let's discuss how we manage messaging back but
want to be clear among us.

In regards to the $100mm from the GP it currently breaks down like this:
- $30mm original Lone Rock equity commitment post aquisition (Phase 1)
- $30mm our match on the Rosemont side which is a combination of the
grandfathered broker dealer network and smaller domestic investors
(i.e. Alex's)
- $25mm Lone Rock's equity commitment to the Institutional raise
- $15 - $25mm our match on the Rosemont side

$100 - 110mm total is all allocated to aquisitions as of now.  We need
to put a plan in place and can negotiate from there.  If we show
returns there's reason to diversify some of that equity.

Regardless, beyond the first $100mm all go forward equity raised can
be allocated as we determine against an efficiency plan that all
stakeholders buy into.

Devon

On Mon, Dec 6, 2010 at 6:59 PM, Eric Schwerin
<[email-masked]> wrote:
> D and H-
> FYI, Jeffrey King, Chafe's Deputy Director, called me just now.  Had a bunch
> of questions on the deck which I deferred to Devon/Mahoney for our call with
> them whenever it gets scheduled.   Clearly they are excited about this
> opportunity.
> Couple of the questions he had:  1) it talks about deal sizes from $25m up
> to $100m.  He said from a retrofitting perspective the smaller side of the
> range work better and wanted to know if RR was targeting 3 buildings at
> $100m or 10 at $30m each 2) he also was wondering where the $100m in
> Rosemont's commitment was coming from.  The reason he was asking was he was
> wondering if some of that $100m could be dedicated to financing the
> retrofitting whereas the new money is targeted to acquiring the assets.
> I deferred all the questions to our next call/meeting, but emphasized that
> we have a commitment to make retrofitting part of this new portfolio but we
> were in the earlier stages of this and would be looking for help from them
> to help sculpt it in a way that was most attractive to T-H fund investors so
> nothing was set in stone at this point.
> He also wanted to make clear that they were hoping for a retainer and a
> percentage for the money they help identify.   I kind of avoided that but
> explained that we understood that that was what they wanted and a lot of the
> question of retainer may have to wait until a few of the investors are
> identified and capital was committed as I don't believe there is capital now
> for that.  He said they could be flexible but clearly they would like a
> retainer at some point.
> Let's try and lock in a time for a follow up meeting/call sometime next
> week.
> Best,
> Eric
>
>
> Eric D. Schwerin
> Rosemont Seneca Partners, LLC
> 1010 Wisconsin Ave., NW
> Suite 705
> Washington, DC 20007
> (202) 333-1880
> [email-masked]
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