Quote:I don't think the injection of the assets are to the benefit of the noteholders, only to SeD as a way for SeD to get shares in AMBS and more ownership in the Company. I wouldn't be surprised if a funding closes and the noteholders complete the debt for equity swap before an asset is injected.
No offense but this post shows that you really don't understand the deal at all.
They signed the deal on January 3. Then they signed an addendum to the LOI effective as of January 3.
The addendum provided as follows:
"In addition to the terms agreed to in the binding letter of intent, January 3, 2017, the following terms will be incorporated into the definitive agreement. In the event of any inconsistency between these terms and the terms of such letter of intent, including Exhibit A letter attached thereto, the terms of this Addendum shall prevail.
1. General
a. Management and Bankers have no intention of bringing variable rate financing into any of the transactions related to the Amarantus restructure strategy. In the unlikely scenario that a variable transaction is engaged, the structured note holders will have the right of participation in these structures.
b. New investors coming into either Amarantus or Avant will be subject to a lock up period in parallel with the release of the structured and/or preferred holders’ release from their lock up.
c. The secured holders will stand still from any action for 90 days to complete the Avant merger, for 90 days to complete the Cutanogen financing and restructure, and for 120 days to complete the Amarantus restructure and financing.
d. The strategies for the AMBS, AVDX and Cutanogen will only be implemented upon the signing of the LOI and the cooperative support of the secured debt holders. Funding would be pursued immediately following the signing of the LOI. Successful funding for any of the two entities at the following levels would trigger the unconditional release of all assets of AMBS by the debt holders: $2.5 million for Cutanogen, $1.5 million for AVDX, or $1.5 million for AMBS, accompanied by an asset injected by SED Biomedical into AMBS that is valued by a nationally recognized firm at a minimum of $12.5 million.
e. The majority of the Series E holders must be in support of the terms agreed to by the secured holders.
f. Amarantus will pay up to $250,000 in aggregate for all of the Holder’s legal counsel representing parties to the Debt Exchange and the Preferred Exchange based on submitted invoices and all back-up to the Holder, and if the aggregate of invoices is in excess of the Maximum Legal Costs, then the Maximum Legal Costs will be allocated pro rata to each Holder based on their respective investment amount, which pro rata share may be combined for convenience for Holders using the same legal counsel; provided after such allocation, any legal costs in excess of each Holder’s allocation will be the responsibility of that Holder.
This addendum and it provisions added to the requirements of the original LOI and benefits the noteholders who still hold a ton of AMBS equity even after the exchange. In fact, they required the addition of this asset as a condition to giving up their liens.
