551 Fifth Avenue, 21st Floor 50 Califomia Steet, Suite 2320 New York, New York 10176 San Francisco, California 94111 T.(212) 947-3793 (418) 490-0561, F: (212) 947-3796 (15) 381-137 By Email (brontecapital@gmail.com) March 19, 2009 John Hempton Bronte Capital Dear Mr. Hempton: Please be advised that this firm is U.S. legal counsel to (i) Ponta Negra Group, LLC, a Delaware limited liability company (“Investment Manager”), (ii) Ponta Negra Group GP, LLC, a Delaware limited liability company (“General Partner”), (ii) Ponta Negra Offshore Fund I, Ltd., a Cayman Islands exempted company (“Offshore Fund”), and (iv) Ponta Negra Master Fund I, L-P., a ‘Cayman Islands exempted limited partnership (“Master Fund”). The Investment Manager provides investment management and advisory services to the Offshore Fund and the Master Fund, and the General Partner serves as the general partner of the Master Fund. The Investment ‘Manager also provides investment management and advisory services to Ponta Negra Fund I, LLC, a Delawere limited liability company (“Onshore Fund”; and, together with the Investment Manager, the General Partner, the Offshore Fund and the Master Fund, “Ponta Negra”), which employs the same strategy as the Master Fund and trades pari passu with the Master Fund. I write regarding (1) inaccurate, misleading and libelous statements contained in two “articles” on your blog “brontecapital. blogspot.com” entitled “Curiouser and Curiouser” (posted on March 18, 2009) and “Fund marketing material” (posted on March 17, 2009) (collectively, “Posts”) and (2) the uploading and posting of Ponta Negra’s confidential information — the February 2009 and May 2008 letters to investors (collectively, “Investor Letters”) — on the www.scribd.com website (Seribd”). The conduet you have engaged in is illegal. In your March 17" Post, as an introduction to the presentation of Ponta Negra’s February 2009 confidential Investor Letter, you state that you “have identified a couple of frauds” by reading those letters from fund managers “more sucessful than [you]” that did not make sense to you. You then ask your readers to explain the Ponta Negra strategy to you, thereby linking Ponta Negra to those funds you have uncovered as “frauds”. In turing to your readers, rather than seeking an explanation from Ponta Negra to your questions concerning its strategy and performance results, you proceeded to post Ponta ‘Negra’s confidential information on both your blog and on Scribd. By presenting material from Ponta Negra’s confidential Investor Letter in this manner, you imply that because you do not understand the strategy, Ponta Negra must be engaged in a fraud. Although the Posts do not mention Ponta Negra by name, by uploading Ponta Negra’s confidential Investor Letters on Scribd under the “BronteCapital” screen name, a reader can easily determine to which fund you are referring in your blog. Your Posts constitute /ibel in that you accuse Ponta Negra of committing a punishable crime, when in fact, Ponta Negra maintains that it did not and has not engaged in any such conduct. {00135618D00)In your subsequent Post on March 18", you note that the confidential Investor Letter you had in your possession made no mention of an auditor or a custodian. As the Investor Letters are internal, interim letters to existing Ponta Negra investors, Ponta Negra has already provided its auditor and custodian information to investors in its fund documentation and in other prior communications. You noted that you found it “very strange” that when you called the number listed on the Investor Letter your call went to a “mobile in Texas.” AS it so happens, Ponta Negra recently hired one of its former external marketers to come in-house and market Ponta Negra. The external marketer is located in Texas and the recent hire is in the process of moving to New York, but has not completed his move yet. Like your March 17" Post, instead of doing your diligence and asking questions of Ponta Negra directly, you chose to post information which leads reader to believe that there is something wrong with Ponta Negra and its operations, which is nothing more than baseless speculation on your part With respect to the Investor Letters posted on your blog and uploaded to Seribd, these letters are subject to various confidentiality provisions pursuant to the agreements in place between Ponta Negra and its clients. In providing you with copies of the Investor Letters, one or more Ponta Negra investors breached their agreement with Ponta Negra. Having notified you of the confidential nature of these documents and of the confidentiality obligations in place, any distribution, in any form, constitutes tortuous interference of Ponta Negra’s contractual relationship with its investors. We hereby demand that you (1) immediately return to my clients all copies of the Investor Letters and any other Ponta Negra information you have in your possession, (2) certify in an affidavit that you have destroyed all other copies of such Ponta ‘Negra information and have not distributed such information to any other person(s), and advise in writing the name(s) of the person(s) that provided you with the Investor Letters. Accordingly, we demand that you (1) keep the Posts and related comments permanently off of ‘your website and cease publishing the Posts and related comments by any means, (2) remove any links to and/or cached versions of the Investor Letters on any search engine sites, like Google" (3) discontinue any further distribution of Ponta Negra’s confidential information (¢.g., the Investor Letters) and continue to keep the Investor Letters permanently off of Scribd and any other website, (4) agree fo no longer refer to, whether directly or indirectly, Ponta Negra, in any context, and (5) provide Ponta Negra with the name(s) and contact information for the individual(s) who provided you with the Investor Letters. To the extent that you fail to honor your commitment to keep the Posts and Investor Letters offline or fail to timely take the aforementioned actions, my clients will immediately pursue any and all legal remedies available to them. Very truly yours, Douglas R. Hirsch ccom/doc/13371716/PontaNegraFeb09+9422fran (00135615.D00) 2