- 10 -10 focused on ABN's expected return and the venture's transaction costs. These negotiations culminated in various agreements, which we refer to collectively as "the Bermuda Agreement". Mr. Matthews and Mr. den Baas agreed that AlliedSignal would pay all of the partnership's expenses and that AlliedSignal would pay ABN a return, which we refer to as ABN's "specified return", equal to ABN's funding costs (i.e., approximately LIBOR) plus 75 b.p. on funds advanced to the partnership. ABN's specified return consisted of income allocations, and AlliedSignal's direct payments, to ABN. In essence, the direct payments would equal the difference between the specified return and the income allocations. The precise amount of the specified return would depend on the amount of ABN funds held by the partnership and the amount of time that the partnership held such funds. AlliedSignal and ABN also agreed that ABN would receive partial repayment during the partnership's existence (i.e., August 1990 and March 1991) and full repayment by May 1992. Mr. den Baas wanted AlliedSignal to pay "up-front" $5 million of the specified return. Mr. Matthews, however, wanted to delay the payment as long as possible to ensure ABN's adherence to the venture's scheduled steps. Mr. den Baas and Mr. Matthews discussed various ways to characterize and structure AlliedSignal's direct payments to ABN. Ultimately, they decided to characterize some of these payments as "premiums". TheyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011