EFTA00641532.pdf

From: Joi Ito a> To: Jeffrey Epstein <jeevacationggmail.com> Subject: Neoteny 3 update and slightly new subscription agreement Date: Tue, 24 Mar 2015 22:29:02 +0000 Neoteny 3, LP, do Neoteny 3 Management, LLC. do Prague & Company, M., Fifteen Walnut Street, Suite 150, Wellesley, MA 02481- Phone: +1-781-237.5555 ext. 202 - Fax: +1.781.237.7779 E-Mail: Web: Neoteny 3 fund invitation and documents Date: March 25, 2015 Dear Jeffrey *ILASTNAMEI*: As the initial closing date for my new fund, Neoteny 3, LP (the "Fund") draws near, I wanted to reach out and let you know of the closing mechanics, as well as alert you to a couple of additional investor-friendly revisions to the Fund documents. EFTA00641532 The initial closing date will be March 31, 2015. Each investor who has submitted signed Subscription Materials and who has been accepted by the General Partner will be admitted into the Fund as of that date. Verbal commitments are insufficient so if you would like to participate in the Fund and have not already done so, please complete and submit the Subscription Materials attached to this email as soon as possible. Investors who are not admitted to the Fund as of March 31, 2015 may be charged interest as described in the Partnership Agreement. On or shortly after March 31, 2015, I will send an email to investors who have properly completed and submitted their Subscription Materials, confirming that the closing has occurred and those investors have been admitted as Limited Partners of the Fund. Soon thereafter, those investors will receive a separate email from Danielle Prague confirming the amount of their accepted subscription, wire transfer instructions, and the deadline for payment of their capital commitment. We expect to immediately make a capital call for 100% of each investor's capital commitment which will be due no later than April 15 2015. Please note that the Fund is a pass-through entity for purposes of U.S. tax law. We urge all investors, and in particular non-U.S. investors, to consult their own advisors to understand the consequences of an investment in the Fund applicable to their individual circumstances. As noted above, I have made a few additional investor-friendly revisions to the Fund documents: • I expect to appoint an Advisory Committee consisting of at least three members who are representatives or designees of the Limited Partners, to assist in dealing with conflicts of interest and certain other matters. • At the end of the Fund's initial 10-year term, the General Partner will only be able to extend the term of the Fund for one additional year without the consent of a majority-in-interest of the Limited Partners (instead of three additional one- year periods). • The operating expenses required to be paid out of the Fund, as well as the amount of reserves the Fund will be entitled to withhold from distributions, must be reasonable. Enclosed are the Term Sheet and Partnership Agreement reflecting these changes. The Subscription Materials are also enclosed, but there have been no changes to these materials. Please read each of these documents carefully and let me know if you have any questions. If you have already submitted your Subscription Materials, you do not need to resubmit them. EFTA00641533 Here are a few key points about the Fund (that have not changed) for any investors receiving this email for the first time: • The distributions and carry calculations will be done on a deal by deal basis, although Limited Partners will be entitled to recoup losses on previously disposed of investments before the General Partner will receive distributions of carried interest with respect to a particular portfolio company investment. The General Partner will not, however, be required to return any previous distributions of carried interest that it has received. This means that there is a chance that Limited Partners could realize a lower aggregate return than if the Fund was to make distributions on a cumulative basis. • The General Partner will not receive a management fee and the carried interest is 20% (down from 30% on my last fund). Accounting and legal fees will be paid by the Fund directly. • The Fund will generally invest a maximum of $250,000 USD per investment and the focus of the Fund will be early stage, venture capital equity or convertible debt investments, and deals lead by known or trusted investors. Key areas of focus include internet software and services, consumer and network hardware, bio engineering and bio technology, and other opportunistic deals that may come in through my network. Some of the deals will be angel rounds and some may be later stage deals or deals that I lead. • I generally will invest the Fund's money first in any opportunity, but I may co- invest my own money or funds from companies that I am involved in as well. • In some cases, I will receive equity or fee compensation from the companies in which the Fund invests. I may also take board or advisory board positions with these companies and be compensated outside the Fund for these positions. • I will invest $100,000 of my own money into the Fund as a Limited Partner. • Although some of the Fund's investments may arise through the MIT Media Lab, the Fund is completely independent of MIT and the MIT Media Lab, and the Fund will have no rights to technology or opportunities arising out of my relationship with MIT or the MIT Media Lab. Since the Fund is learning about investment opportunities that may not still be available as of or following the initial closing date, the Fund may accept additional capital contributions prior to March 31, 2015 and, to the extent of available funds, the Fund may make a limited number of investments prior to that date. However, investors who submit their capital contributions prior to March 31, 2015 will not be entitled to any additional return. Here is an update on the portfolio and pipeline. Panalopy - (This investment has been completed using the $100,000 I invested in Neoteny 3.) Peer to peer mental health network founded by Media Lab graduate based work done at the lab. $100,000 investment in seed round lead by Union Square Ventures. EFTA00641534 OH2 - (This investment is ready to go pending funding of Neoteny 3.) $250K investment in OH2 - an IP development and holding company for GPCR-related biomedical technology based on research at MIT. I will most likely be involved in organizing and having carry in an additional investment along side the fund investment with a different vehicle. Currently finalizing investment in friends and family and/or convertible note pre-series A. udu - (This investment is ready to go pending funding of Neoteny 3.) App and backend system unifying scheduling, sharing and communications. $100K investment in seed round with stock options for the fund. I am already an advisor to the company and have stock options in the company. Wearlity - (This investment is ready to go pending funding of Neoteny 3.) low-cost, high-quality virtual reality lenses based on technology spinout of Lockheed Martin founded by Chief Innovation Officer (David Allen Smith) of Lockheed Martin who will spin out of Lockheed as CEO. $100K investment in seed round. I already have an investment in the company through an investment vehicle as well as stock options for a board position. Thank you again for your interest in the Fund. Please let me know if you have any questions and I look forward to working with you on this new Fund. Sincerely, Joichi Ito, as manager of Neoteny 3 Management, LLC, the General Partner of Neoteny 3, LP The new files are in this dropbox folder: https://www.dropbox.com/sh/m3yffre94dylzgm/AADQM-caL_XMX5Hbw- RmamvTa?dl=0 This email was sent to v, ±y? did I get this? unsubscribe from this list update subscription preferences Neoteny 3, LP • Fifteen Walnut Street. Suite 150 do Neoteny 3 Management. LW, do Prague 8 Company. • Wellesley. MA 02481 • USA EFTA00641535