AND
ITS SHAREHOLDERS TO A BUSINESS COMBINATION WITH THE COMPANY AND THAT ADVISOR
WILL OBTAIN SIMILAR CONSENTS FROM ANY FUTURE SHAREHOLDERS, MEMBERS OR OTHER
EQUITY HOLDERS OF THE ADVISOR.
B)
THE NUMBER OF SHARES TO BE ISSUED BY THE COMPANY TO THE ADVISOR
OR ITS SHAREHOLDERS, MEMBERS OR OTHER EQUITY HOLDERS AS THE CASE MAY BE, SHALL
BE DETERMINED AS FOLLOWS: THE NET INCOME OF THE ADVISOR FOR THE CALENDAR MONTH
IMMEDIATELY PRECEDING THE MONTH IN WHICH THE MERGER AGREEMENT IS EXECUTED, AS
DETERMINED BY AN INDEPENDENT AUDIT CONDUCTED IN ACCORDANCE WITH GENERALLY
ACCEPTED AUDITING STANDARDS, SHALL BE ANNUALIZED (THE "ANNUAL NET INCOME"). THE
ANNUAL NET INCOME SHALL THEN BE MULTIPLIED BY NINETY PERCENT (90%) AND THEN
DIVIDED BY THE "FUNDS FROM OPERATIONS PER WEIGHTED AVERAGE SHARE" OF THE
COMPANY.
"FUNDS FROM OPERATIONS PER WEIGHTED AVERAGE SHARE" SHALL BE EQUAL TO
THE ANNUALIZED FUNDS FROM OPERATIONS, ON THE BASIS OF FOUR (4) TIMES THE FUNDS
FROM OPERATIONS FOR THE FISCAL QUARTER IMMEDIATELY PRECEDING THE
12
MONTH IN WHICH THE MERGER AGREEMENT IS EXECUTED, PER WEIGHTED AVERAGE SHARE OF
THE COMPANY FOR SUCH QUARTER AS STATED IN THE QUARTERLY REPORT ON FORM 10-Q OF
THE COMPANY GIVEN TO ITS SHAREHOLDERS FOR SUCH QUARTER.
THE RESULTING QUOTIENT
SHALL CONSTITUTE THE NUMBER OF SHARES TO BE ISSUED BY THE COMPANY TO THE ADVISOR
OR ITS SHAREHOLDERS, MEMBERS OR OTHER EQUITY HOLDERS AS THE CASE MAY BE, WITH
DELIVERY THEREOF AND THE CLOSING OF THE BUSINESS COMBINATION TO OCCUR WITHIN
NINETY (90) DAYS AFTER THE DATE THE ELECTION NOTICE IS GIVEN TO ADVISOR.
ANY
SUCH TRANSACTION WILL OCCUR, IF AT ALL, ONLY IF THE BOARD OF DIRECTORS OF THE
COMPANY OBTAINS A FAIRNESS OPINION FROM AN INVESTMENT BANKING OR VALUATION FIRM
TO THE EFFECT THAT THE CONSIDERATION TO BE PAID FOR THE BUSINESS COMBINATION IS
FAIR, FROM A FINANCIAL POINT OF VIEW, TO THE COMPANY.
13.
EXPENSES OF THE COMPANY.
THE COMPANY SHALL
PAY ALL OF ITS EXPENSES AND SHALL REIMBURSE THE ADVISOR FOR ITS EXPENSES AS
PROVIDED IN SECTIONS 9 AND 10 HEREOF AND, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, IT IS AGREED THAT THE FOLLOWING EXPENSES OF THE COMPANY SHALL BE PAID
BY THE COMPANY:
A)
TO THE EXTENT THE ADVISOR IS NOT EXPRESSLY REQUIRED TO PAY SUCH
EXPENSES PURSUANT TO THIS AGREEMENT, SALARIES AND OTHER EMPLOYMENT EXPENSES OF
THE PERSONNEL EMPLOYED BY THE COMPANY, DIRECTORS' FEES AND EXPENSES INCURRED IN
ATTENDING DIRECTORS MEETINGS, TRAVEL AND OTHER EXPENSES INCURRED BY DIRECTORS,
OFFICERS AND EMPLOYEES OF THE COMPANY AND THE COST OF DIRECTORS' LIABILITY
INSURANCE;
B)
THE COST OF BORROWED MONEYS;
C)
ALL TAXES APPLICABLE TO THE COMPANY;
D)
LEGAL, ACCOUNTING, AUDITING, UNDERWRITING, BROKERAGE, LISTING,
REGISTRATION AND OTHER EXPENSES AND TAXES INCURRED IN CONNECTION WITH THE
ORGANIZATION OR TERMINATION OF THE COMPANY, THE ISSUANCE, DISTRIBUTION,
TRANSFER, REGISTRATION AND STOCK EXCHANGE OR QUOTATION SYSTEM LISTING OF THE
COMPANY'S SECURITIES;
E)
FEES AND EXPENSES PAID TO ADVISORS, INDEPENDENT CONTRACTORS, THE
MANAGEMENT AGENT, CONSULTANTS, MANAGERS AND OTHER AGENTS EMPLOYED DIRECTLY BY
THE COMPANY OR