Subject: New RSTP Email Draft
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Wed, 20 May 2015 20:49:05 -0400

A little long, but I think it goes to what you wanted to say.  Let me know if you want me to edit down a little.

Will-  (or are you responding to Neil’s email?)

I understand that Devon has reached out to you to clairfy that he has not recused himself and that RSP is still voting on this matter as a single entity.  I think that gets to the crux of the fundamental misunderstanding here.  Until the negotiations over my exit from the funds have concluded and the document we are discussing has been signed, RSP still has 45% equity in all the RSTP funds.  According to the original agreement we negotiated, the Rosemont Seneca Technology Partners, LLC operating agreement, it takes an 80% vote of the partners to make any changes or make any significant financial decisions.   This was always very important to Devon and me so that we could operate the fund by consensus.  This is not something we would ever give up.  In fact, we only agreed to go down from holding a majority of the equity knowing that the 80% provision would ensure that a majority could not unilaterally make decisions for the whole partnership.  

I see from the revised agreement you sent me on Monday that there are two key differences in that agreement from the one you sent on Friday.  One, the counter-party to the agreement is an entity called RSTP Management, LLC.  I further see that this entity was registered in Delaware on April XX, 2015 and then registered with the SEC as an investment adviser on May 11, 2015, the day before Goldman’s IC approved its investment in RSTP II.   Can you clarify what this entity is and why it would be the counter party to this agreement?  As far as I know RSP has not voted to allow the GP in any of the RSTP entities to change and the GP is still Rosemont Seneca Technology Partners, LLC.  Two, I see that the agreement is now back dated to February 19, 2015.  As we are still negotiating the terms that will govern how we move forward the date of the agreement should be the date that it is signed.

Perhaps the major issue Devon and I have with the proposed agreement you sent is that the new agreement allows a majority in interest of the partners to remove another partner under what seem to be very broad reasons.  This is unacceptable to us and goes against the spirit of the 80% rule we negotiated and particularly if under your proposal I am giving up voting rights.   This is why I am opposed to your request for vesting.  Thank you for your clarification on the RSTP I vesting, but I also can see no vesting requirements in the RSTP II Alpha and Bravo LP agreements or in the Rosemont Seneca Technology Partners, LLC agreement (which should govern Alpha and Bravo as that is the GP of those funds). 

These funds are closed.  We are all incentivized to bring as much value to Counsyl as possible so it is unclear to me why we would need to include vesting provisions.  You will recall that in the midst of our negotiations about my exit I still picked up the phone and called Walmart. 

Because these funds are closed and the sole remaining purpose of the GP partners is to develop business for the funds all of those partners should receive management fees for taking the time to do so.  These funds were created for the sole purpose of investing in Counsyl.  Management fees from those funds should not be used to grow RSTP II or any other funds.  The management fees should go to compensate the partners of the fund for the time they are expending on behalf of that specific fund.

As it relates to the additional attestations you sent - code of conduct, political contributions, etc. - I also can not sign the political contribution document and see no reason why I should when the fund is no longer raising money and not subject to pay to play issues anymore.  I also am concerned about some of the requirements of the code of conduct and some them would need to be clarified.

Finally, on how the GP shares for RSTP I, Alpha and Bravo should be split,  In fact, I believe that the equity in those three entities should be split evenly by you, me, John, Devon, Neil and Rob so that we each get 15%, with Eric and Chris splitting the remaining 10% so that they each getting 5% each.  That seems more than fair to me.  I also want to make clear that there is absolutely no objection from me on Rob being given a clear percentage. Since you were insisting that Rob, Eric and I split our shares out of 22.5% I was merely indicating that since none of you are volunteering to give up anything to cut Rob in, this would have to be something Rob, Eric and I will have to discuss and determine on our own.   I would strongly urge us to all consider cutting Rob in equally, which is more aligned with our operating agreement anyway.

I look forward to your response to the above points.

Best,

Hunter

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked] <x-msg://59/[email-masked]>
P Consider the environment before printing this email.