Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
On
Pursuant to the Note, the Bank may, by written notice to the Company, declare the principal of and the accrued interest on all outstanding loans to be forthwith due and payable upon the occurrence of certain events of default. The Note defines Default to include, inter alia, (i) a default in payment when due of all or any part of any obligation payable by the Company under the Note, (ii) a default in the observance or performance of certain of the provisions set forth in the Note, (iii) any representation or warranty made in connection with the Note proves untrue or incomplete, (iv) the filing or issuance of any levy or writ of attachment or garnishment or other like judicial process upon the Company or any guarantor, and (v) any other specified event of default.
Guaranty of the Note has been made by four members of the Company's board of directors ("Guarantors"). The Company agreed to issue the four Guarantors shares of the Company's common stock on a monthly basis depending on the outstanding balance due and owing under the Note for agreeing to act as a Guarantor of the Note.
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