Subject: Fwd: Revised B-D questions
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Mon, 25 Apr 2011 17:57:08 -0400

To discuss briefly tonight.  I'll also print out.

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked]
P Consider the environment before printing this email.

Begin forwarded message:

From: Eric Schwerin <[email-masked]>
Date: April 24, 2011 5:10:09 PM EDT
To: Arlene Busch <[email-masked]>
Cc: Eric Schwerin <[email-masked]>
Subject: Revised B-D questions

Arlene-

Attached and in the body of the email below are my revisions to the questions for Doug. I will share these with Hunter tomorrow as well.  Let me know if you have questions.

Best,

Eric

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked]
P Consider the environment before printing this email.

What is the scope of coverage of the B-D as it relates to you current lines of business? Meaning are only third-party investment fees included in the revenue of the B-D? What else would be included?

Currently, we have corporate and alternative investment advisory clients that are serviced by Rosemont Seneca Advisors for which we are compensated purely on a monthly retainer.  Our vision of the B-D is that we will move all of the alternative investment advisory clients over to the B-D for whom we perform retainer based services related to “introductions to capital”.   We would also sign up additional alternative investment advisory clients for whom we would perform third-party marketing under a fee-sharing/non-retainer agreement.  Finally, with the establishment of the B-D, we would also be able to take investment banking fees if we are able to identify capital for any of our corporate clients.   All of those things would be included in the revenue stream of the B-D except for retainer income from advisory clients that pre-date the investment.

What is the term of the non- solicit/ non- compete that Hunter and the other revenue producing principals of the B-D will be bound to?

Once the BD established neither Hunter nor any of the principals would do any work that would be in direct competition with RSP Investments nor would we solicit anyone for any other outside investment products, however any “Rosemont” proprietary products would be exempted from this.

Does Hunter or any other employees expect to take a salary from the B-D?

Yes, we envision that Hunter, Arlene and Eric will receive a salary from the B-D.  These salary payments will enable the three of them to focus on developing the business of the B-D and not have to worry about taking on additional advisory clients who could distract from that work. 

What percentage of your current expenses does the B-D expect to be responsible for?

Initially, we expect the B-D to cover travel, entertainment and rent for any work done by the principals in support of the B-D.  That should mean that the B-D will cover between 30-50% of current expenses depending on category.

What are the expected expenses for travel and entertainment for the first 12 months?

$120,000

What are expected revenues of the B-D the first 12? 24 months?

We expect to raise between $200-300 million over the first two years. Fees from this would be .80%.  

Would all my investment be used for working capital?

Yes.

When would the B-D be approved by Finra?

To be discussed with Hunter in person.

Whom are the principals? Fin-ops?

The principals would be Hunter Biden, Arlene Busch, Eric Schwerin and Devon Archer.   Hunter, Eric and Devon would have ownership and not be licensed.   Arlene will be the primary licensee and the day-to-day manager of the business for the short term. Fin-ops would be outsourced.

Would the current associates of Hunter make an investment as well?

No, although we have also allocated money to pay for legal and organizational expenses related to the set up of the B-D and the good capital related to the B-D.