glow...the parties pay capital in proportion to their ownership in the Company (JV):
"2.3 FUNDING. The Parties shall provide to the Company the working capital
necessary for the construction of the Project Networks and any other funds
required for the operation of the business of such Project Networks
proportionally to the Parties ownership in the Company in terms of Clause 3.1
below as agreed herein. The amount of such funding shall be set forth in the
Initial Plan, the initial draft of which is attached hereto as Schedule 2.2 The
Parties agree to cooperate in good faith and as quickly as practicable to agree
upon a definitive business plan, and until that plan is finished the Initial
Plan shall control."
Globetel will be paid by the Company for their equipment, but how much profit that transaction with the Company will yield for GTEM is not known. Assuming equipment is 49% or less of the cost of the project (likely imo), GTEM would still have to capitalize, for their ownership share of the Company, an amount equal to their own equipment overhead and development costs, plus percentage (all shown on their invoice to the Company for the equipment) plus the difference between that and 49% of the project cost.
"A. In recognition of the development costs incurred by GlobeTel, GlobeTel
shall sell the latest version of the HotZone technology and supporting equipment
to the Company at cost plus [***] percent ([***]%). The foregoing on the
understanding that such [***] percent ([***]%) shall be paid by the Company
exclusively during the first [***] ([***]) months following the date of
incorporation of the Company. For purposes hereof, cost shall mean: the cost
shown in the invoice issued by the vendor of the equipment plus any taxes and/or
expenses, directly related to the purchase of the equipment minus any credits
and/or discounts granted by the vendor, directly related to the purchase of the
equipment"
The only out would be a sweetheart deal where VPN lets them show exorbitant profits and/or development costs and allows them to go on paper as having fulfilled their share, but since when do Peralta's give away money? So they are in for substantial debt to execute this JV. If I were VPN, I would be watching for them to default, then I'd grab the equipment for a settlement and cut them out of the JV. Hence the risk for GTEM if they let VPN (or anyone) finance their share.
In other words, their role as vendor is isolated from their role as part owner of the Company. Any equipment that is supplied to the Company (from GTEM or others) has to be capitalized by the Owners of the company, even if an owner is also a vendor.
all imo.
AI
