As compensation to the Pledgors for providing the Backstop Security, the Company will issue to the Pledgors 20 shares of common stock for each $1 of Backstop Security they provide for the SVB loan, for a total of 31,000,000 shares. The Pledgors will also receive a secured note which is activated only in the event of default. The face value of each note is equal to the amount of Backstop Security provided plus a 50% return. An 8% coupon is initiated in the event of default. The notes will rank second in security behind SVB. In the event of default, Pledgors who are not already on the Board of the Company will be appointed to the Board. The Pledgors have the right to approve or deny any debt financing proposed by the Company, but such approval must not be unreasonably withheld, conditioned or delayed. The Pledgors’ expenses will be paid by the Company.
....was this really necessary!
