- Get rid of the $500K payment to aid customer transition.
- Don't give proceeds to Broadweave with exercise of UTOPIA right of first refusal on headend
- Give Provo a full board seat on Broadweave Networks
- Make the playing field level for Nuvont in negotiating the sale of customers
Thursday, May 22, 2008
Still Holding My Breath
There are still some changes I want to see in the iProvo purchase agreement:
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4 comments:
How about removing the "no payments, no interest for six months" period in the financing arrangement? That's a heck of a giveaway to let them run the network for free for 6 months.
I think you're misunderstanding what's going on there. The total amount is split into two parts: the headend note and the system note. This is done because of UTOPIA's right of first refusal on the headend.
Payments on the two notes are roughly the same. Payment on the headend note starts immediately on close of the sale. The headend note is paid off in January, when payments begin on the system note.
The reason to do the payments this way is that if you have a $1.5M note on the headend payable over 20 years that would be an excessively favorable term should UTOPIA choose to exercise the RFR.
On the other hand, if UTOPIA does exercise the RFR, Broadweave will get 6 months of no payments due.
Ah, that makes a lot more sense then. So, basically, Broadweave buys the head-end first, then starts paying for the network? If they've already bought the head-end in the case of a default, do they get to keep it? That confuses me.
Good question.
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