EFTA02662455.pdf

From: jeffrey E. <[email protected]> Sent: Friday, January 20, 2017 12:31 PM To: Hosain Rahman Subject: Re: Final Notes <CONFIDENTIAL SETTLEMENT COMMUNICATION - FOR SETTLEMENT PURPOSES ONLY> i can talk sometime tomorrowl I would like you=to tell me of ian osbournes role. did he get any commssi=n fees, value on my investment. ? CAUTION you are =alking a taut tightrope with me. . suggesting that my witnesses will be of the same mind in a lawsuit. its clear that b=ackrock will support my complaint - strongly. =div class="gmail_extra"> On Tue, Jan 17, 2=17 at 5:56 PM, Hosain Rahman > wrote:=br> Hi J=ffrey, Here is some background on the BlackRock a=d communication that we had with the Kuwaitis on it. I got clearance to sh=re it with you. We are finalizing the other materials to share with you.=C21, Please treat this as a settlement communica=ion. Let's discuss, Begin forwarded message:=/div> <=pan style="font-family:-webkit-system-font,Helvetica Neue, • - •• • (0,0,0,1.0)">From: Hosain Rahman <mailt Subject= Final Notes Date: October 11, 2016 at 2:18:1= AM PDT To: </=pan>"Farouk Bastaki Cc: "Hussain AlHalabi =br> Farouk, Attached is the bottomline analysis of the options available to the Comp=ny right now. It is a pretty stark difference between the two paths. Ultim=tely we are asking BlackRock to chose the path that is economically best f=r them - we are killing ourselves for them to have a better financial outc=me. Our intentions should be aligned... I've also attached a timeline of our BlackRock relationsh=p. There is a one page summary at the beginning and the full detail behind=it. EFTA_R1_01911288 EFTA02662455  Hey are notes in som= key areas: <=div> Background on the =lobal Allocation team • Dennis Statt=an is head of the Global Allocation Team. • Lisa O'Do=nell, Co-COO of the team, has been the Fund officer overseeing BlackRock&#=9;s position in our company and has been the chief decision maker in this =rocess. • She has been extremely aggressive, mean-spirited and=difficult to work with since the beginning of their investment. She dislik=s all of their private investments and has stated she wants to make a nega=ive example of Jawbone. She objected to our deal in the beginning and feel= like the investment was made despite her viewpoint. • No one =rom Jawbone has ever met Lisa in person. She refused to meet us either in =er Princeton office nor has she ever visited us. We have tried multiple ti=es. • Lisa has repeatedly stated in front of advisors and bank=rs on the phone that she doesn't care if BR loses all of their capital=from this deal- the loss is insignificant for them with the size of their =und. • Lisa has also stated to me directly that we should neve= expect any help from BlackRock in any situation - "we are your cr=ditor, do not ever expect anything from us" • I have heard f=om several different people that they refer to me as "The Terroris=" internally. Terrible given the current state of affairs in the w=rld. • David Clayton is a non-investing Managing Director with=the Fund and has recently been our primary contact recently (he reports to=lisa). • The Senior Investment Analysts on our deal have been =aniel Daniel and Patrick Edelmann. They seem powerless in the situation an= do not stand up to Lisa. • No one from BlackRock has visited =awbone in 2016. They have not seen any of the new things we are working on= No demos of the prototypes, nothing. Possible anticipated points from BlackRock and our =esponses • Management team- we=don't trust Hosain, the Board, his management team, everything he =nd the team have told us has turned out to not be true, promises are never=hit. We have missed targets and it has been painful. We are taking-great care to make sure we don't repeat the mistakes of the past, =here are reasons we missed targets - slow sales in stores, quality issues,=product delays. We had a bad product cycle and we haven't been fun=ed to come out of it. Instead of focusing on the business we fight with BR= It's a waste. But to your point it sort of doesn't matter=relative to the economically rational decision going forward. <=i>Wasting money - opex super high put in this much money three =onths later they needed more money Again perhaps we sho=ld have cut expenses earlier but we needed to move the ball forward to whe=e it is today in many areas. We have a smart focused plan going forward wh=re have a very manageable burn rate and are raising 2 years of operating c=pital. We have never done this in the history of the business. <=i>Deals aren't real, they create the term sheets and they ar=n't real, we can4>=804«t respond until they are real. No one will move forward with=closing until term sheets are agreed to. This feels like a stall tactic.=C24« • They threw this Larry/JPM term sheet in front of us, L=rry Unrein says he isn't sure if he will do it or not, we got the feeling that JP Morgan wasn't a sureshot.=A0- Larry hadn't taken the deal to his investment committee and go=ten final approval because he wanted BR to sign off on it before he got th= final approval to ensure he didn't have to go back multiple times= If BR shows flexibility and a willingness, Larry will come through and fu=d. Other investors are also happy to participate. =/div> Third party feedback 2 EFTA_R1_01911289 EFTA02662456  JP Morgan will tell you that t=ey have never seen a more "destructive" $285M put into a C=mpany • Our Skadden lawyer on the re-structuring side is widely cons=dered to be the top re-structuring lawyer in the country. He will tell you=he has never seen anyone behave as BlackRock has behaved in the dozens of =eals he has worked on - no debtor has not even engaged in a dialogue to gi=e feedback on possible solutions. • Skadden has also stated re=eatedly that the Board since May has done more than any other Board they h=ve ever seen in exploring every option and finding the best solution for a=l constituents - we have turned over every possible stone we could think o= to find a solution. • PJT has never seen a lender behave this way i= any situation they have been involved with ▪ CODE does not understa=d what BlackRock is doing and why please note The information contained in this communication is confidential, =ay be attorney-client privileged, may constitute inside information, an= is intended only for the use of the addressee. It is the property ofJEE Unauthorized use, disclosure or copying of this communication o= any part thereof is strictly prohibited and may be unlawful. If you ha=e received this communication in error, please notify us immediately by=br>return e-mail or by e-mail to [email protected] <mailto:[email protected]> , and destroy this communicat=on and all copies thereof, including all attachments. copyright -all ri=hts reserved 3 EFTA_R1_01911290 EFTA02662457