PER 8k
Under the terms of this agreement, at closing the Investor will lend us approximately $65 million. The investment will be for a maximum term of 10 years. As consideration, the Investor will receive 45% of Lily Group and a lien on Lily Group’s assets, together with royalties and/or dividends at the rate of 1.25% per annum. We have the right to buy back the equity in Lily Group at the end of any calendar year, on the basis of the fair market valuation of the outstanding.
What is "consideration" in a Business Law perspective slapper?
Answer: Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.
Lily's consideration 45%
Lenders consideration 65 million dollars.
Lender receives their 65 million back, Lily receives their 45%
Is this clear to everyone?
65 million is 45% of what number??? That number is what the lender values the organization at. Just so happens to be $144,444,444.40
Next
Lien: A right given to another by the owner of property to secure a debt, or one created by law in favor of certain creditors.
Regarding: We have the right to buy back the equity in Lily Group at the end of any calendar year.
How about this, We made a shitton of money this year and want to pay off 20 million of our debt right now, without penalty.
Lender: Ok 20 million dollars/current share price = x number of shares. Convert that number of shares back to percentage of initial loan, and that is the percentage of the 45% which would have been returned to Lily Group.
Finally:
royalties and/or dividends at the rate of 1.25% per annum.
65m(.0125)= $812,500 interest and/or dividends(doesn't matter which, still only 1.25% per annum)
$812,500/12 months=$67,708.34/month
Yup! they get 65 million for ten years @ 1.25% per annum
Sweet Deal ehh?
Is this really that difficult?
Any more questions I can help you with please let me know.
Always glad to help
PT
