Representations, Warranties, and Covenants
The Stock Purchase Agreement contains:
(a) representations and warranties from the Company to East, including representations and warranties relating to, among others: corporate
organization, capitalization, corporate authority and absence of conflicts, third party and governmental consents and approvals, reports and regulatory matters, financial statements, the absence of undisclosed liabilities, internal controls,
brokers fees, absence of certain changes or events, legal proceedings and compliance with law, taxes and tax returns, employee matters, certain material contracts, property and investments securities, intellectual property, state takeover
laws, the information to be provided by the Company for inclusion in the proxy statement and insurance;
(b) representations and
warranties from East to the Company, including representations and warranties relating to: organization, limited liability company authority and absence of conflicts, third party and governmental consents and approvals, regulatory matters,
brokers fees, legal proceedings, state takeover laws, the information to be provided by East for inclusion in the proxy statement, sufficiency of funds, no arrangements with management or shareholders of the Company, certain securities laws
matters and certain matters related to the Contributed Assets;
(c) covenants providing that the Company will conduct its business in the
ordinary course until the Closing and use its reasonable best efforts to maintain and preserve intact the Companys assets and business organization;
(d) covenants providing that the Company will not, until the Closing, take (or omit to take) certain non-ordinary course and other
actions without the written consent of East or pursuant to specified exceptions;
(e) covenants providing that the Company will use its
commercially reasonable efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, approvals and authorizations of all
third parties and governmental entities that are necessary or advisable for the Company to consummate the Stock Purchase, including (i) filing a proxy statement to solicit shareholder approval of the Advisory Agreement, the Stock Purchase and
an amendment of the Companys certificate of incorporation to increase the number of authorized shares of Common Stock; and (ii) notifying the U.S. Small Business Administration (the SBA) of the contemplated Stock Purchase, and
taking such actions and making such filings as may reasonably be necessary to obtain the SBAs approval to the continued effectiveness of the Companys SBA license (the SBA Approval) or obtaining confirmation that SBA Approval
is not required; and
(f) certain other covenants, including covenants regarding access to information, cooperation, seeking Company
shareholder approval, and the timing and efforts to be taken by Rand Management in connection with its registration as an investment adviser under the Investment Advisers Act of 1940, as amended.
Conditions to Closing
The
obligations of the parties to consummate the Stock Purchase is subject to certain conditions, including:
(a) the approval by Company
shareholders of the Stock Purchase, including the issuance of the Shares at a price per share that is below the Companys then current net asset value per share, the Advisory Agreement and an amendment of the Companys certificate of
incorporation to increase the number of authorized shares of Common Stock shall have been obtained;
(b) Rand Management shall be
registered as an investment adviser under the Investment Advisers Act of 1940, as amended;