BUSINESS ADVISORY AGREEMENT
Exhibit 10.9
BUSINESS ADVISORY AGREEMENT
This Agreement is made and entered into as of this 1st day of April, 2008 (the “Effective Date”) between XenaCare Holdings, Inc., a Florida corporation with offices at 14000 North Military Trail, Suite 104, Delray Beach, Florida 33484 (the “Company” or “XENA”) and Newbridge Securities Corporation, a Virginia corporation with its principal offices at 1451 West Cypress Creek Road, Suite 204, Fort Lauderdale, Florida 33309 (the “Advisor”).
WHEREAS, the Company is seeking certain services and advice regarding the Company’s business and financing activities; and
WHEREAS, the Advisor is willing to furnish certain business and financial related advice and services to the Company on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual terms and covenants contained herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1.
Purpose. The Company hereby engages the Advisor on a non-exclusive basis for the term specified in this agreement to render financial and business advisory consulting advice to the Company as a financial advisor relating t o financial and similar matters upon the terms and conditions set forth herein.
2.
Representations of the Advisor. The Advisor represents and warrants to the Company that (a) it is a member in good standing of 1.Financial Industry Regulatory Authority (“FINRA”) and that it is engaged in the securities brokerage business; (b) in addition to its securities brokerage business, the Advisor provides consulting advisory services; and (c) it is free to enter into this Agreement and the services to ‘be provided pursuant to this Agreement are not in conflict with any other contractual or other obligation to which the Advisor is bound. The Company acknowledges that the Advisor is in the securities business and may provide financial and business consulting services and advice of the type contemplated by this Agreement to others, and that nothing contained herein shall be construed to limit or restrict the Advisor in providing such services or advice to othe rs.
3.
Duties of the Advisor. During the term of this Agreement, the Advisor will provide the Company with consulting advice as specified below at the request of the Company, provided that the Advisor shall not be required to undertake duties not reasonably within the scope of the consulting advisory service in which the Advisor is engaged generally. In the performance of these duties, the Advisor shall provide the Company with the benefits of its best judgment and efforts, and the Advisor cannot and does not guarantee or promise that its efforts will have any impact on the business of the Company or that any subsequent improvement will result from the efforts of the Advisor. It is understood and acknowledged by the parties that the value of the Advisor’s advice is not measurable in any quantitative manner, and that the amount of time spent rendering such consulting advice sh all be determined according to the Advisor’s
discretion. The Advisor’s duties may include, but will not necessarily be limited to, rendering the following services to the Company:
(a)
Study and review the business, operations, historical financial performance of the Company (based upon information provided to the Advisor by management) so as to enable the Advisor to provide advice to the Company;
(b)
Assist the Company in attempting to formulate the optimum strategy to meet the Company’s working capital and capital resource needs during the term of this Agreement;
(c)
Assist the Company in seeking to identify and evaluate potential merger and acquisition candidates for the Company and, in appropriate instances, negotiate on the Company’s behalf;
(d)
Assist in the introduction of the Company to institutional or other capital financing sources;
(e)
Assist in the formulation of the terms and structure of any reasonable proposed equity or debt financing or business transaction involving the Company;
(f)
Newbridge, upon request, will seek out and recommend financial events (such as conferences, seminars, etc.) in order for the Company to maximize its awareness to the financial community; and
(g)
Newbridge, upon request, will assist the Company in appropriately positioning itself with the financial community as to its sector and advantages to its peers.
(h)
Newbridge, upon request, will assist the Company in finding proper corporate counsel, auditor, and other professionals to represent the Company.
(i)
Newbridge, upon request, will assist in any presentation to the Board of Directors of the Company in connection with a proposed transaction or financing and, if requested, render a fairness opinion to the Board ‘with respect to the consideration to be paid or received by the Company in connection with any such transaction;
(j)
Newbridge, upon request, will review the Company’s executive compensation and employee benefit plans and make recommendations to the Company as to how such plans may be improved or enhanced and
(k)
Newbridge, upon request, will advise the Company as to the expected reaction of the financial community to any transaction and assist in determining the optimum means of communicating the pertinent aspects of such transaction
(l)
Newbridge, upon request, will review all aspects of the Company’s business and advise as to the over all perception from the financial community;
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(m)
Newbridge, upon request, will seek additional members to join the board of directors or board of advisors;
4.
Term. Subject to the termination provisions set forth in paragraph 16 hereof, the term of this Agreement shall be for one (1) year commencing from the date of this Agreement (the “Term”); provided, however, that this Agreement may be renewed or extended upon such terms and conditions as may be mutually agreed upon by the parties hereto. This Agreement shall terminate, only in the event that the Advisor is no longer a member in good standing of the FINRA.
5.
Advisory Fee. In consideration of the services to be rendered and performed by Newbridge during the Consulting Period, XENA will pay to Newbridge a financial advisory fee of $30,000 payable as follows: (a) twelve consecutive monthly payments of $2,500 the first such payment to be due on the six month anniversary of the Effective Date and every 30 days thereafter. The Company will also issue to Newbridge 500,000 shares of common stock at $0.001 per share. Additionally, the Company shall issue options to purchase 800,000 shares of common stock in the following amounts and strike prices: 200,000 with a strike of $4.50; 200,000 with a strike of $5.00; 200,000 with a strike of $5.50 and 200,000 with a strike of $6.00 (the Warrants). Such Warrants shall expire five years from the issue date. The Shares and Warrants and rights provided under Section 5 shall be deemed earned and vested upon the Effective Date.
6.
Financing Fee.
(a)
In the event the Advisor effects, underwrites or introduces a financing by offering or selling any of the securities of the Company, in a private or public debt and/or equity transaction, pursuant to which the Company obtains financing or other consideration, the Advisor shall receive a Financing Fee in addition to the Advisory Fee and any other fee to be received pursuant to this Agreement, which shall be mutually determined between the Company and the Advisor at the time of any such Financing.
7.
Transaction Finder’s Fee.
(a)
In connection with any transaction (“Transaction”) consummated by the Company during the period ending two years from the termination of this Agreement in which the Advisor during the term of this Agreement introduced the other party (except for any party identified by the Company on a schedule to be provided contemporaneously with the execution of this Agreement) to the Company, the Company will pay to the Advisor a Transaction Fee (“Transaction Fee”) based on the aggregate consideration received or to be paid by the Company in connection with such Transaction, and computed as follows: (i) 7% of the first million dollars or part thereof; 6% of the next million dollars or part thereof; 5% of the next million dollars or part thereof; 4% of the next million dollars of part thereof and 3% of the balance of the value of the transaction, or (ii) as otherwise mutually agreed t o in writing by the parties (the formula can be increased). The Transaction Fee will be payable in the same forms and proportions as the aggregate consideration disbursed or received by the Company, unless otherwise mutually agreed to in writing by the parties.
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(b)
As used herein, the term “aggregate consideration” shall be deemed to be the total amount disbursed or received by the Company (which shall be deemed to include amounts paid into escrow) in connection with a Transaction.
(c)
A Transaction Fee is payable in the event of and upon the closing of a Transaction; provided, however, that if the aggregate consideration consists of or may be increased by future payments or contingent payments related to future earnings or operations, the Company, in its discretion, shall have the choice to either (i) pay that portion of the Transaction Fee at closing based on the present value of any future and/or contingent payments calculated as at closing or (ii) pay that portion of the Transaction Fee calculated and paid when and as such future and/or contingent payments are made to the Company; provided further, however, that even if the Company exercises its discretion under clause (ii) above, the entire Transaction Fee due to the Advisor will be paid within twenty-four (24) months of the date this Agreement is terminated, regardless of whether the Company has then received all payments that are to be made to the Company in connection with the Transaction.
8.
Use of Name and Advice. The Company agrees that any reference to Advisor in any release, communication or other material is subject to Advisor’s prior written approval, which may be given or withheld in its sole discretion and which will expire immediately upon Advisor’s resignation or the termination of this Agreement. No statements made or advice rendered by Advisor in connection with the services performed by Advisor pursuant to this Agreement will be quoted by, nor will any such statements or advice be referred to, in any communication, whether written or oral, prepared, issued or transmitted, directly or indirectly, by the Company without the prior written authorization of Advisor, which may be given or withheld in its sole discretion, except to the extent required by law (in which case the appropriate party shall so advise Advisor in writing prior to such use and shall consult with Advisor with respect to the form and timing of disclosure).
9.
Representations and Warranties of the Company. Set forth on Exhibit C are the representations and warranties of the Company.
10.
Covenants of the Company. The Company covenants and agrees with Advisor that:
(a)
During the Term of this Agreement, the Company will deliver to the Advisor:
(i)
as soon as they are available, copies of all reports (financial or other) mailed to shareholders;
(ii)
as soon as they are available, copies of all reports and financial statements furnished to or filed with the Commission, the FINRA or any securities exchange;
(iii)
every press release and every material news item or article of interest to the financial community in respect of the Company or its affairs which was prepared and released by or on behalf of the Company; and
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(iv)
any additional information of a public nature concerning the Company (aid any future subsidiaries) or its businesses which the Advisor may reasonably request.
(b)
During the Term of this Agreement, the Company will provide to a designated representative of Advisor’s investment banking team, a quarterly current client list and shareholder list, which will be treated at all times as “Confidential Information” as defined in that certain Confidentiality Agreement between the Company and the Advisor,
(c)
During the Term of this Agreement, the Company will allow the Advisor to nominate an observer to the Board of Directors of the Company. The choice of such person shall be subject to the approval of the Company, which approval shall not unreasonably be withheld. All out-of-pocket expenses incurred by that person shall be reimbursed by the Company who will not receive compensation different from the other non-officer directors; provided, however, that any single expense item in excess of $500 shall be preapproved by the Company.
11.
Costs and Expenses. In addition to the fees payable hereunder, the Company shall reimburse the Advisor, within five (5) business days of its request, for any and all reasonable out-of-pocket expenses incurred in connection with the services performed by the Advisor under this Agreement; provided, however, that any single expense item in excess of $200 or monthly expense in excess of $500 shall be preapproved by the Company.
12.
Company Information. The Company recognizes and confirms that, in advising the Company and in fulfilling its engagement hereunder, the Advisor will use and rely on data, material and other information furnished to the Advisor by the Company (the “Company Information”). The Company acknowledges and agrees that in performing its services under this engagement, the Advisor may rely upon the Company Information without independently verifying the accuracy, completeness or veracity of same. The parties further acknowledge that the Advisor shall have no responsibility for the accuracy of any statements to be made by Company management contained in press releases or other communications, including, but not limited to, filings with the SEC and FINRA. In addition, in the performance of its services, the Advisor may look to such others for factual information, economi c advice and/or research upon which to base its advice to the Company hereunder as the Advisor shall in good faith deem appropriate.
13.
Indemnification.
(a)
The Company agrees to indemnify and hold harmless the Advisor, each person who controls the Advisor within the meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended, and the Advisor’s officers, directors, employees, accountants, attorneys and agents (the “`Advisor’s Indemnitees”) against any and all losses, claims, expenses, damages or liabilities, joint or several, to which they or any of them may become subject (including the costs of any investigation and all reasonable attorneys’ fees and costs) or incurred by them, to the fullest extent lawful, in connection with any pending or threatened litigation, legal claim or proceeding, whether or not resulting in any liability, arising out of or in connection with the services rendered by the Advisor or any transactions in
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connection with this Agreement; provided, however, that the indemnity agreement contained in this Section 12(a) shall not apply to any such losses, claims, related expenses, damages or liabilities arising out of gross negligence, willful misconduct or fraud of the Advisor, or a material breach of the Advisor’s representations and warranties hereunder.
(b)
The Advisor agrees to indemnify and hold harmless the Company and its officers, directors, employees, accountants, attorneys and agents (the “Company’s Indemnitees”) against any and all losses, claims, expenses, damages or liabilities, joint or several, to which they or any of them may become subject (including the costs of any investigation and all reasonable attorneys’ fees and costs) or incurred by them, to the fullest extent lawful, in connection with any pending or threatened litigation, legal claim or proceeding, whether or not resulting in any liability, arising out of gross negligence, willful misconduct or fraud of the Advisor; provided, however, that the indemnity agreement contained in this Section 12(b) shall not apply to any such losses, claims, related expenses, damages or liabilities arising out of the gross negligence, willful misconduct or fraud of the Company , or a material breach of the Company’s representations and warranties hereunder. In addition, Advisor and Advisor’s Indemnitees shall not have any liability to the Company or Company Indemnitees in connection with the services rendered pursuant to the Agreement except for any liability for claims, liabilities, losses or damages finally judicially determined to have resulted solely as a result of the gross negligence or willful misconduct of Advisor or Advisor’s Indemnitees. In no event shall Advisor or .Advisor’s Indemnitees be responsible for any special, indirect, punitive or consequential damages.
(c)
Each Advisor’s Indemnitee or Company’s Indemnitee, as the case may be (an “Indemnified Person”), shall give prompt written notice to the Company or the Advisor, as appropriate (the “Indemnifying Party”), after the receipt by such Indemnified Person of any written notice of the commencement of any action, suit or proceeding for which such Indemnified Person will claim indemnification or contribution pursuant to this Agreement. The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Person within twenty (20) business days after the receipt of written notice from such Indemnified Person of such commencement, to assume, at its expense, the defense of any such action, suit or proceeding; provided, however, that an Indemnified Person shall have the right to employ counsel in any such action, suit or proceeding, and to parti cipate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Indemnifying Party fails to assume the defense of such action, suit or proceeding or fails to employ separate counsel reasonably satisfactory to such Indemnified Person in any such action, suit or proceeding; or (ii) the Indemnifying Party and such Indemnified Person shall have been advised by counsel that there may be one or more defenses available to such Indemnified Person which are in conflict with, different from or additional to those available to the Indemnifying Party, or another Indemnified Person, as the case may be (in which case, if such Indemnified Person notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Indemnified Person); it being understood, however, t hat the Indemnifying Party shall not, in connection with any one such action or proceeding of separate but substantially similar or related actions or proceedings arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time acting
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for each Indemnified Person in any one jurisdiction. The Indemnifying Party shall not settle or compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding in which any Indemnified Person is a party and as to which indemnification or contribution has been sought by such Indemnified Person hereunder, unless such Indemnified Person has given its prior written consent or the settlement, compromise, consent or termination includes an express unconditional release of such Indemnified Person, satisfactory in form and substance to such Indemnified Person, from all losses, claims, damages or liabilities arising out of such action, claim, suit or proceeding.
(d)
If for any reason the indemnity provided for in this Section 12 is unavailable to an Indemnified Person or insufficient to hold an Indemnified Person harmless, then the Indemnifying Party, to the fullest extent permitted by law, shall contribute to the amount paid or payable by such Indemnified Person as a result of such claims, liabilities, losses, damages or expenses in such proportion as its appropriate to reflect (i) the relative benefits received by the Company on one hand and by the Advisor on the other, from the transaction or proposed transaction under this Agreement and (ii) the relative fault of the Company and the Advisor, as well as any relevant equitable considerations. The relative fault of the Company on the one hand and the Advisor on the other shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the om ission or alleged omission to state a material fact relates to information supplied by the Company or by the Advisor. The indemnity, contribution and expense reimbursement obligations set forth herein (i) shall be in addition to any liability an Indemnifying Party may have to any Indemnified Person at common law of otherwise, (ii) shall survive the termination of this Agreement, (iii) shall apply to any modification of this Agreement and shall remain in full force and effect following the completion or termination of the Agreement, (iv) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Advisor or any other Indemnified Person, and (v) shall be binding on any successor or assign of the Company or the Advisor and the respective successors or assigns to all or substantially all of the Company’s or the Advisor’s business and assets.
(e)
In the performance of its services, the Advisor shall be obligated to act only in good faith, and shall not be liable to the Company for errors in judgment that are not the result of gross negligence or willful misconduct.
14.
Use of Advice by the Company. The Company acknowledges that all opinions and advice (written or oral) given by the Advisor to the Company in connection with the engagement of the Advisor are intended solely for the benefit and use of the Company in considering the matters to which they relate, and the Company agrees that no person or entity other than the Company and its Board of Directors shall be entitled to make, use or rely upon the advice of the Advisor to be given hereunder, and no such opinion or advice shall be used for any other purpose, or reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose, nor may the Company make any public references to the Advisor, or use the Advisor’s name in any reports or releases of the Company without the Advisor’s prior written consent.
The Company acknowledges that the Advisor makes no representations or commitment whatsoever as to making a market in the Company’s securities or recommending or advising its
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clients, or any other persons, to purchase the company’s securities. Research reports or corporate business reports that may be prepared by the Advisor will, when and if prepared, be done solely on the merits and the judgment and analysis of the Advisor or any of its senior personnel.
15.
The Advisor as an Independent Contractor. The Advisor shall perform its services hereunder as an independent contractor and not as an employee of the Company or an affiliate thereof. It is expressly understood and agreed to by the parties hereto that the Advisor shall have no authority to act for, represent or bind the Company or any affiliate thereof, in any manner, except as may be agreed to expressly by the Company in writing from time to time.
16.
Termination. This engagement would commence on the date on which we both sign and deliver a definitive business advisory agreement and continue for a period of one (1) year (the “Consulting Period”). The term may be extended or shortened with a thirty day written notice to either of the parties. In the event the Company terminates the Agreement, all options, warrants and shares that have been earned (as per section 3 (a) and 3 (b) above) shall be promptly delivered to the Advisor and the Company has no further obligation regarding any amounts that have not been earned. Unless otherwise specifically provided, termination of this Agreement shall not affect the Advisor’s rights as set forth in paragraph 5 hereof.
17.
Representations, Warranties and Agreements to Survive. The respective indemnities, agreements, representations, warranties and other statements of the Company and the Advisor set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Advisor, the Company, or any of their respective officers or directors.
18.
Notices. All communications hereunder will be in writing and, except as otherwise expressly provided herein, sent by overnight mail, to the Company at
XenaCare Holdings, Inc.
14000 North Military Trail, Suite 104
Delray Beach, Florida 33484
Attention: Frank Rizzo, President
and to the Advisor at:
Newbridge Securities Corporation
1451 West Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309
Attention: Douglas K. Aguililla
19.
Parties in Interest. This Agreement is made solely for the benefit of the Advisor and the Company, and their respective controlling persons, directors and officers, and their respective successors, assigns, executors and administrators. No other person shall acquire or have any right under or by virtue of this Agreement.
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20.
Headings. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.
21.
Applicable Law; Venue and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to conflict of law principles. Any action arising out of this agreement shall be brought exclusively in a court of competent jurisdiction located in Broward County, Florida, and the parties hereby irrevocably submit to the personal jurisdiction of such courts, and waive any objection they now or hereafter may have to the laying of venue in such courts.
22.
Integration. This Agreement constitutes the entire agreement and understanding of the parties hereto, and supersedes any and all previous agreements and understandings, whether oral or written, between the parties with respect to the matters set forth herein. No provision of this Agreement may be amended, modified or waived, except in a writing signed by all of the parties hereto.
23.
Counterparts. This Agreement may be executed in any number of counterparts, each of which together shall constitute one and the same instrument.
24.
Authority. This Agreement has been duly authorized, executed and delivered by and on behalf of the Company and the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.
THE COMPANY
XENACARE HOLDINGS, INCORPORATED
By:
/s/ Frank Rizzo
Mr. Frank Rizzo President
THE ADVISOR
NEWBRIDGE SECURITIES CORPORATION
By:
/s/ Douglas K. Aguililla
Douglas K. Aguililla, Managing Director of Investment Banking
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DISCLOSURE SCHEDULE
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Advisor as follows:
(a)
The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the state of its incorporation, with full corporate power and authority to own its properties and conduct its business and is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which the nature of its business or the character or location of its properties requires such qualification, except where the failure to so qualify would not have a material adverse effect on the business, properties or operations of the Company and its subsidiaries as a whole.
(b)
The Company has full legal right, power and authority to enter into this Agreement, and to consummate the transactions provided for herein, and this Agreement, when executed by the Company, will constitute a valid and binding agreement, enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy or other similar laws affecting the rights of creditors generally or by general equitable principles and except as the enforcement of indemnification provisions may be limited by federal or state securities laws).
(c)
Except as disclosed in the Company’s public filings or on the Disclosure Schedule attached hereto (“Disclosure Schedule”), the Company is not in violation of its articles of incorporation or bylaws or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material bond, debenture, note or other evidence of indebtedness or in any material contract, indenture, mortgage, loan agreement, lease, joint venture, partnership or other agreement or instrument to which the Company is a party or by which it may be bound or is not in material violation of any law, order, rule, regulation, writ, injunction or decree of any governmental instrumentality or court, domestic or foreign; and the execution and delivery of this Agreement and the consummation of the transactions contemplated therein and will not conflict with, or result i n a material breach of any of the terms, conditions or provisions of, or constitute a material default under, or result in the imposition of any material lien, charge or encumbrance upon any of the property or assets of the Company pursuant to, any material bond, debenture, note or other evidence of indebtedness or any material contract, indenture, mortgage, loan agreement, lease, joint venture, partnership or other agreement or instrument to which the Company is a party nor will such action result in the material violation by the Company of any of the provisions of its articles of incorporation or bylaws or any law, order, rule, regulation, writ, injunction, decree of any government, governmental instrumentality or court, domestic or foreign, except where such violation will not have a material adverse effect on the financial condition of the Company.
(d)
The authorized, issued and outstanding capital stock of the Company is as disclosed in writing to the Advisor and all of the shares of issued and outstanding capital stock of the Company set forth therein have been duly authorized, validly issued and are fully paid and nonassessable; the holders thereof do not have any rights of rescission with respect therefor and
Exhibit C
Page 1
are not subject to personal liability for any obligations of the Company by reason of being stockholders under the laws of the State in which the Company is incorporated; and none of such outstanding capital stock is subject to or was issued in violation of any preemptive or similar rights of any stockholder of the Company.
(e)
Except as disclosed in the Company’s public filings or on the Disclosure Schedule, the Company is not a party to or bound by any instrument, agreement or other arrangement providing for it to issue any capital stock, rights, warrants, options or other securities, except for this Agreement and as disclosed in writing to the Advisor. Upon the issuance and delivery pursuant to the terms hereof of any securities to the Advisor, the Advisor will acquire good and marketable title to such securities free and clear of any lien, charge, claim, encumbrance, pledge, security interest, defect or other restriction of any kind whatsoever other than restrictions as may be imposed under the securities laws.
(f)
Except as disclosed in the Company’s public filings or on the Disclosure Schedule, the Company has good and marketable title to all of its properties and assets as owned by it, free and clear of all liens, charges, encumbrances or restrictions, except as disclosed in writing to the Advisor or which are not materially significant or important in relation to its business or which have been incurred in the ordinary course of business.
(g)
The financial information contained in the Company’s public filings fairly presents the financial position and results of operations of the Company at the respective dates and for the respective periods to which they apply. Said information has been prepared in accordance with generally accepted accounting principles applied on a basis which is consistent in all material respects during the periods involved, except in the case of unaudited financial statements’ normal recurring adjustments.
(h)
There has been no material adverse change or material development involving a prospective adverse change in the condition, financial or otherwise, or in the prospects, value, operation, properties, business or re alts of operations of the Company whether or not arising in the ordinary course of business.
(i)
To the knowledge of the Company, except as disclosed in the Company’s public filings or on the Disclosure Schedule, there is no pending or threatened, action, suit or proceeding to which the Company is a party before or by any court or governmental agency or body, which might result in any material adverse change in the financial condition or business of the Company as a whole or might materially and adversely affect the properties or assets of the Company as a whole nor are there any actions, suits or proceedings against the Company related to environmental matters or related to discrimination on the basis of age, sex, religion or race which might be expected to materially and adversely affect the conduct of the business, property, operations, financial condition or earnings of the Company as a whole; and no labor disturbance by the employees of the Company exists or is, to the knowledge of the Company, imminent which might be expected to materially and adversely affect the conduct of the business, property, operations, financial condition or earnings of the Company as a whole.
(j)
Except as disclosed in the Company’s public filings or on the Disclosure Schedule, the Company has properly prepared and filed all necessary federal, state, local and
Exhibit C
Page 2
foreign income and franchise tax returns, has paid all taxes shown as due thereon, has established adequate reserves for such taxes which are not yet due and payable, and does not have any tax deficiency or claims outstanding, proposed or assessed against it.
(k)
The Company has sufficient licenses, permits, right to use trade or service marks and other governmental authorizations currently required for the conduct of its business as now being conducted and the Company is in all material respects complying therewith, To its knowledge, none of the activities or businesses of the Company are in material violation of, or cause the Company to materially violate any law, rule, regulations, or order of the United States, any state, county or locality, or of any agency or body of the United States or of any state, county or locality.
(l)
The Company knows of no outstanding claims for services either in the nature of a finder’s fee, brokerage fee or otherwise with respect to this Agreement for which the Company or the Advisor may be responsible.
(m)
The Company has its property adequately insured against loss or damage.
(n)
To the best of the Company’s knowledge it has generally enjoyed a satisfactory employer-employee relationship with its employees and, to the best of its knowledge, is in substantial compliance in all material respects with all federal, state, local, and foreign laws and regulations respecting employment and employment practices, terms and conditions of employment and wages and hours.
(o)
Except as disclosed in the Company’s public filings or on the Disclosure Schedule, no officer or director of the Company, holder of 5% or more of securities of the Company or any affiliate of any of the foregoing persons or entities has or has had, either directly or indirectly, (i) an interest in any person or entity which (A) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by the Company, or (B) purchases from or sells or furnishes to the Company any goods or services, or (ii) a beneficiary interest in any contract or agreement to which the Company is a party or by which it may be bound or affected.
(p)
The minute books of the Company have been made available to the Advisor and contain a complete summary of all meetings and actions of the directors and stockholders of the Company, since the time of its incorporation and reflect all transactions referred to in such minutes accurately in all respects.
(q)
Except as disclosed in the Company’s public filings or on the Disclosure Schedule, no holders of any securities of the Company or of any options, warrants or other convertible or exchangeable securities of the Company have the right to include any securities issued by the Company in any registration statement to be filed by the Company or to require the Company to file a registration statement under the Act and no person or entity holds any anti-dilution rights with respect to any securities of the Company.
Exhibit C
Page 3
