Joint Venture Negotiation between Railco & Gangnam Heavy Industries (GHI) November 9, 2012
* Location of the JV
* Structure of the Company
* C Corporation
* Exclusive sales and marketing agreement with Co-branding.
* Location of Production
* Initially production in US only.
* Begin production in S. Korea after 3 years.
* 50% 50% Stock Ownership and Control.
* 50% board of directors.
* If JV in S. Korea is responsible for production than a majority of voting power and stock ownership is required. * Cannot sell stock without other parties approval. Right of first refusal to purchase stock applies.
* Notice provisions of all corporate actions, including creation of any subsidiary or spin off company, contracts, loan, agreements, transfers of property–real, tangible, and intellectual, hiring and firing of senior management and up. * Veto or Approval power of these corporate actions, even if we have a minority stockholding position. * Violation of notice gives rise to the non-breaching party’s ability to terminate the JV. * Property can only be used for the JV.
* Profits & Royalties
Sales Location| Profits| Royalties years 1–10| Royalties years 11–∞| Asian & European Mkt| 35% Railco65% GHI| 10% to Railco3% to GHI| 8% to Railco1.5% to GHI| US Market| 65% Railco35% GHI| 10% to Railco3% to GHI| 8% to Railco1.5% to GHI|
* Railco will manage the financials of the company
* Initial Funding
* 640 Million USD GHI and 360 Million USD Railco
* Future funding based on initial funding ratios
* Individual efforts to seek a loan required.
* Debt issuance
* Stock issuance
* All IP, technology, and tangible property associated with the JV cannot be transferred in any way...