Tuesday, December 05, 2023 11:45:35 AM
"To the extent not paid pursuant to Section 2(a) above, dividends on the Senior Preferred Stock shall accrue
and shall be added to the Liquidation Preference pursuant to Section 8, whether or not there are funds legally available for
the payment of such dividends and whether or not dividends are declared."
"For each Dividend Period from the date of the initial issuance of the Senior Preferred Stock through and
including December 31, 2012, “Dividend Rate” means 10.0%; provided, however, that if at any time the Company shall have for any reason failed to pay dividends in cash in a timely manner as required by this Certificate, then immediately following such failure and for all Dividend Periods thereafter until
the Dividend Period following the date on which the Company shall have paid in cash full cumulative dividends (including
any unpaid dividends added to the Liquidation Preference pursuant to Section 8) the “Dividend Rate” shall mean 12.0%."
The dividend percentages are all based on LP amounts, and unpaid dividends are added to the LP. No additional shares issued.
The current state is that the NWS is still in place, but now considered "unpaid dividends" which is why the LP grows by the entire net worth amount dollar for dollar. It's the same mechanism as above- in lieu of cash, the unpaid amount increases the LP.
I should also mention that because the NWS was deemed a breach of good faith & fair dealing, that the current unpaid NWS dividend that is increasing the LP may need to be adjusted downward to 10% or 12%.
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