Why would there be a problem with 10mm shares each to the CEO and two other key players/investors? Seems reasonable to me.
As for the loans, whether or not they represent good business practice or not depends on the use of the funds raised and the terms of the notes. Convertibles that have a fixed conversion price can be a reasonably healthy way to raise money. Variable conversions with no set conversion price and the discretion regarding timing of the conversion totally in the hands of the lender can be disasterous, resulting in "death spiral dilution".
I'm not motivated to go to the effort to ferret out the terms of these loans to find out whether or not they are "good" or "bad" but you might be. In any event, they may well have already been converted or otherwise satisfied and be immaterial to the case at hand.
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