SERVICES CONTRACT PIPELINE
REVISION II
The services Contract Pipeline (“SCP”) is a tool designed for the Wealth Management Groups (“WMG”) to use in the execution of Transaction Agreements presented as per the respective Services Contracts.
COORDINATOR
WMG MCORP DBII WMG
In the above, the COORDINATOR will be a WMG selected by MCORP and DBII that, in conjunction with its ICIB Work Center, with the other WMG engaged, and with the respective CENTERS of the other WMG, is executing the Transaction Agreement.
The WMG on the left side will hereinafter be referred to as WMG-M and the WMG on the right side will hereinafter be referred to as WMG-D, all of which WMG will be selected by the COORDINATOR.
WMG-M and/or WMG-D may be multiple WMGs, as selected and determined by the COORDINATOR.
The COORDINATOR may also function as the WMG-M, the WMG-D, or as a party to either.
The COORDINATOR will arrange for DBII to acquire negotiable instruments presented by or through WMG-D.
DBII will contract to pay a USD value for instruments, hereinafter “USDP”, negotiated between the COORDINATOR, DBII, and WMG-D.
The negotiable instruments must be acceptable to WMG-M and must have a Net Present Value (“NPV”), as determined by WMG-M, greater than USDP plus any profits that must be distributed to WMG-M and/or WMG-D.
DBII will contract to buy items from MCORP and pay for the purchase with negotiable instruments obtained from/through WMG-D.
MCORP will present the payment instruments provided by DBII to WMG-M.
WMG-M will negotiate the payment instruments at full face value to obtain the NPV thereof.
The NPV will be disbursed by WMG-M:
1. As profits to be provided WMG-M and/or WMG-D, as negotiated with the COORDINATOR and with DBII.
2. The amount required as payment for the items being purchased through MCORP by DBII.
3. The remainder, equal to USDP, will be returned to DBII as “CHANGE”.
The items requested by DBII shall always be income producing or expenditure reduction instruments such as:
1. European Energy Bonds (“EEB”)
2. Revenue Sharing Obligation Bonds (“RSOB”)
3. Other types of Bonds to be specified by DBII
4. Cap and Trade Tax Credits
5. Other Tax Credits to be specified by DBII
6. Vouchers for price reduction negotiated with Vendors through DBII Portal within www.chips-corner.com
7. Uniform Advertising Promissory Notes (“UAPN”) presented by the COORDINATOR as part of a Transaction Agreement.
The distribution of payment of the NPV for items requested by DBII shall be negotiated between the COORDINATOR and DBII for each Transaction Agreement.
The CHANGE (equal to USDP) shall be paid by WMG-M to WMG-D.
The instruments presented by WMG-D to DBII are expected to have far greater face value than USDP
But, since the instruments will not be sold but will be presented as payment, when negotiating the NPV, the full face value plus any interest to be accrued is expected to be used to compute NPV.
COORDINATOR, WMG-M, and WMG-D profits must be distributed as per their respective Services Contracts.
COORDINATOR profits to be distributed as per its respective Services Contract will be equal to 2/3 of the value of the UAPN being redeemed.
EXAMPLE
DBII wishes to acquire a continuous flow of European Energy Bonds.
A COORDINATOR wishes to obtain payment for a set of 30 UAPN, each having a face value of $1 Billion USD.
The COORDINATOR is responsible for preparing all Transaction Agreements, with all WMG, related to achieving the above objectives, to be approved by MCORP and DBII.
The COORDINATOR will select the WMG to be involved, and may change these at any time.
The COORDINATOR will arrange for WMG-D to present Bank Debentures (Medium Term Notes, “MTN”) to be purchased by DBII; i.e., in this example, MTN are selected as the instruments to be negotiated.
The COORDINATOR will arrange for WMG-M to negotiate the NPV of MTN presented.
The COORDINATOR will arrange for European Energy Bonds to be made available at a negotiated price.
The COORDINATOR is responsible for arranging the close of each purchase to be consummated as agreed to by all parties; with all steps being executed simultaneously with all parties at the same closing table, or as if all parties were at the same closing table, as may be agreed by all parties involved; this will include the selection, contracting, and monitoring of law firms, escrow firms, and/or closing banks, that may be required.
The COORDINATOR is responsible for coordinating the negotiation of the value of USDP, of EEB, and of NPV for each purchase to be consummated.
For illustration, assume that the face value of each MTN is $100 Million USD, that USDP value is $25 Million USD and that EEB value is $10 Million USD.
If the MTN is a ten year instrument, without interest coupons, and if the applicable compounded interest rate is 2% the NPV for a fresh cut $100 Million USD instrument would be $82,034,830 and the difference between NPV and USDP would be $57,034,830.
Interest coupons would increase the NPV significantly, but the interest rate used might be greater, thus balancing back to about the same number as above.
Subtracting the value of EEB would yield $47,034,830 as “PROFIT”.
If the agreed upon profit for WMG-M is 20% and for WMG-D is 20%, then 60% of PROFIT (to be paid towards UAPN) would be $28,220,898.
Thus, it would require the processing of 36 purchases to satisfy the payment for a UAPN with a value of $1 Billion USD.
That would provide an income for WMG-M of $338,650,776 and equal income for WMG-D, each of which incomes might include, as may be negotiated, income for the COORDINATOR.
All of these incomes would be distributed as per respective Service Contracts.
Additionally, from the UAPN payment, the COORDINATOR would have $666,666,666.67 to be disbursed as per the COORDINATOR’S Service Contract.
As a result of the purchases made, DBII would own $360 Million USD in value of EEB.
Processing of the full set of 30 UAPN would yield the above amounts multiplied by 30 and would require the processing of a total of 1,080 purchases.
If, on the average, 25 purchases per day are executed, the total process would require 44 days.
If processing takes place 4 days per week, the total process would require 11 weeks.
It is important to note that THE BLUE MILLENIUM FOUNDATION will not provide rebates related to any purchase using the SCP; i.e., the “U.S. DOLLAR BACKED BY GOLD” Protocol in www.chips-corner.com is not applicable; because the SCP is designed to function as a “clearing mechanism”.
However, the Protocol “OFFERING TO PURCHASING/TRADING DEPARTMENTS” found in DBII ALLEY and “CONTRACT ME” VOUCHERS found in CORNERSTONE PORTAL, both in www.chips-corner.com, may be used to further compensate both initial issuer of the MTN and the end funder of MTN.