Concierge medicine is a membership-based approach to practicing medicine that can have significant benefits for medical practices scenarios. It offers patients expanded, expedited, and more personalized primary care, and gives physicians more time to collaborate with patients. A hybrid approach to “membership medicine” can help medical practices and physicians address challenges related to creating new or additional revenue streams. Concierge medicine can also benefit practitioners looking for a lifestyle change, as well as medical practices seeking to improve physician retention. Concierge medicine programs can significantly impact revenue stream even for traditional medical practices by generating recurring monthly subscription revenue. Just as with the cost of any monthly subscription model, concierge medicine models rely on market conditions to dictate the price point. Prices are based on: (a) supply and demand in the geographical region, (b) the patient population, (c) the nature of the current practice, and (d) the culture of the practice. For example, a physician practice or provider that offers a hybrid concierge medicine program to one hundred members and charges each member a $200 monthly fee, can generate $240,000 annually, separate from any third-party payors. Pricing errors or overestimating the market are common mistakes. Concierge medicine can be critical to physician retention and recruitment. The flexibility of concierge models can help organizations counter physician burnout, which is due in part to demanding fee-for-service environments that incentivize physicians to see high volumes of patients. Giving physicians flexibility over the pace of their practice can improve physician satisfaction thereby increasing the retention of senior physicians while assisting with the recruitment of new physicians. Physicians must clearly communicate the scope of services covered by the concierge program to avoid regulatory compliance and legal issues. Concierge medicine models can also be an attractive service option within traditional medical practices. When structured correctly, concierge medicine models complement, rather than oppose traditional practice models. Productivity levels and patient outcomes often improve over time because physicians spend more time with patients. Physicians and medical practices must be proactive about seeking guidance when it comes to integrating concierge medicine. Concierge medicine models are most effective when properly structured well in advance of implementation. While concierge medicine part can be great way for physicians that want to scale back their practice or just generate more revenue, it is far from perfect. The reality is that certain markets and physician specialties are better suited for concierge medicine than others. However, the most important factor for any physician or medical practice looking to implement a concierge medicine program is to work closely with a healthcare attorney, who is familiar with the nuanced regulatory hurdles and compliance risks involved. If you believe your medical practice and patients could benefit from a concierge medicine program, please reach out to one of our experienced healthcare attorneys to discuss. Michael C. Foster (908) 360-8456 mfoster@olenderfeldman.com Craig D. Bronsnick (908) 964-2482 cbronsnick@olenderfeldman.com

Artificial Intelligence (AI) is transforming businesses across all sectors, offering enhanced efficiency, analytics, and decision-making capabilities. However, alongside these benefits come considerable risks, particularly when sensitive and confidential business information becomes unintentionally public. Companies must understand these risks and adopt clear, legally robust AI policies and procedures to mitigate them effectively. Understanding AI Risks and Confidentiality Exposure: The fundamental risk associated with using AI, especially open systems, is the inadvertent exposure of confidential information. Many AI platforms (particularly the free platforms) operate by scraping the Internet, including data input by platform users, absorbing data into vast "data lakes," subsequently using that data for machine learning purposes and to expand its “knowledge.” This practice could render “confidential” information publicly accessible or at least indirectly discoverable, significantly undermining trade secret protection and confidentiality obligations. A recent example is the lawsuit Doe v. OpenAI LP, No. 23-CV-01346 (N.D. Cal. 2023), where plaintiffs alleged unauthorized use and public exposure of personal and proprietary data. Such cases highlight the necessity of proactive measures to prevent unintended disclosures. Can Incorporating AI Provisions in NDAs and Commercial Contracts Help? Yes. Addressing AI usage in Non-Disclosure Agreements (NDAs) and other commercial contracts involving confidential information can avoid any doubt about the impact of using AI and can educate those who might otherwise accidentally expose your confidential of proprietary information to AI due to a simple lack of understanding. Such contractual provisions should define acceptable use parameters for confidential or proprietary information in and with AI platforms. The American Bar Association emphasizes that companies should explicitly delineate data protection standards, usage restrictions, and clarify ownership of any derivative data or insights produced by AI within their commercial agreements (ABA Journal, "Navigating Legal Risks in Artificial Intelligence," 2023). What is the Difference Between Closed vs. Open AI Systems? Open AI systems continuously integrate into their broader datasets all data input by users. Such a system puts the confidentiality of all such data at great risk. Closed systems typically do not incorporate user data into their machine learning models outside of the users specific usage. Instead, they rely solely on predefined external data sources, thus maintaining higher levels of data confidentiality and privilege. Why is are AI Policies and Procedures Essential? Developing comprehensive AI policies and procedures is a necessity to: identify permissible AI platforms; clarify the scope/limits on the use such platform(s); provide guidance on handling confidential information; and provide a chain of command to address any open questions or issues as they arise. Failure to adopt and implement clear guidelines could lead to costly litigation and irreparable reputational harm. If you have any questions about this article, the use of AI in your business, how to protect your confidential or proprietary information against AI, or in the development and implementation of sound AI usage policies and procedures, please contact Michael J. Feldman, Esq. (mfeldman@olenderfeldman.com or 908-964-2486) or Niharika Reddy, Esq. (nreddy@olenderfeldman.com or 908-743-9297).

The Hidden Danger of Fast Capital Rick Colosimo: Mike, you've worked as a CFO and led M&A for major companies. Now, you advise small business owners on financial and growth strategy. What’s one of the biggest mistakes you see when companies are under cash pressure? Mike Princi: One of the riskiest decisions I see is turning to merchant cash advances (MCAs). These are particularly common in businesses that generate most of their revenue through credit card transactions. An MCA provides a lump sum of cash upfront, in exchange for fixed daily or weekly repayments. It seems fast and simple—but the costs can escalate quickly. I call it a “financial Venus flytrap”—easy to enter, nearly impossible to exit without damage. Daily withdrawals drain cash just when a business needs flexibility most. Why MCAs Are Structurally Risky Rick: That sounds serious. What makes MCAs so problematic? Mike: Unlike traditional loans, MCAs don’t have fixed monthly payments. Instead, they deduct from your daily or weekly card sales, no matter your costs. When business slows, you still owe the same—choking your working capital. Yes, you can renegotiate smaller payments toward a fixed percentage of your daily sales (which used to be common). But it never happens fast enough. The real issue is the outrageous cost. The fees seem simple, like 20% of the borrowed amount, but when you annualize that through proper modeling, it often equates to 60% to over 100% in effective interest. We’d call that the “cost of capital.” That’s incredibly expensive. MCAs use a factor rate, typically ranging from 1.1 to 1.5. This means that for every $1 you receive, you repay $1.10 to $1.50. That may sound harmless, but compressed into short repayment periods, the cost of capital skyrockets. Rick: What people may not know is that these aren’t loans, which means there is no protection from usury. That means those high rates of return – like interest – are legal. Businesses at Highest Risk Rick: What kinds of businesses are most vulnerable? Mike: Companies with fast-moving operations and tight margins. Think online retailers, restaurants, medical/dental/vet practices, franchise operators, and service providers. These businesses often experience seasonal revenue patterns and need working capital flexibility—but they lack a dedicated process for cash flow planning. Because MCAs are easy to access and require minimal underwriting, they’re tempting. They offer quick access to capital with fewer or no credit checks in exchange for being much more expensive than traditional financing. That speed might solve a short-term need, but if the business doesn’t rebound quickly, it leads to deeper financial stress. Some owners even stack multiple MCAs, creating a compounding debt cycle. Smarter Alternatives to MCA Funding Rick: So what should business owners do instead? Mike: Start by thinking like an investor: Is this capital generating a return above its cost? If not, avoid it. Most of these businesses don’t see 60% returns in their best years. Why should the MCA company make more money than you? Second, every business should maintain a simple 13-week cash flow forecast. This rolling calendar, meaning it’s updated every week, gives visibility into income and expenses. When you plug in an MCA repayment schedule, it becomes clear how disruptive those payments can be. Finally, treat MCAs as a last resort, not a recurring solution. If you’re using one to cover routine bills, the real issue isn’t timing—it’s structural. And if you start stacking them up, you know you have a problem. The Truth About “Advance Factoring” Rick: What about products marketed as “advance factoring?” Are they better? Mike: Often, no. True factoring means selling receivables you already have and transferring some or all of the collection risk. That has long been legitimate, and the cost is dramatically lower than MCAs. But “advance factoring” is just a rebranded MCA. If you’re still responsible for repayment even if your customers default, that’s not factoring—it’s disguised debt and with these returns, often illegal. The name might be different, but the risks are the same. Lower-Cost Alternatives to Traditional MCAs Rick: Are there better ways to access short-term capital? Mike: While MCAs inherently come with higher costs than traditional financing, there are several alternative funding options that can provide similar benefits (quick access, flexible repayment) with potentially lower costs and fewer challenges: Revenue-Based Financing (RBF): Similar to MCAs but typically offered by more regulated lenders with lower factor rates (often 1.06–1.3 instead of 1.1–1.5). Companies like Clearbanc (now Clearco) and Capchase offer these for specific business types. Business Lines of Credit: Provides flexible access to funds with lower interest rates (8–25% APR vs. effective annual rates of 40–200% for MCAs). You only pay interest on what you use. Options include traditional bank lines or online lenders like Bluevine or Fundbox. Invoice Factoring: If you have B2B customers, factoring companies will advance 80–90% of invoice values for fees of 1–5% per month, often cheaper than MCAs. Short-term Business Loans: Online lenders like OnDeck, Kabbage (now part of American Express), or traditional SBA loans offer more predictable payment structures with lower effective rates. Credit Cards: it seems impossible to suggest a 28% APR credit card, but that’s a much better rate than what you pay with an MCA. It’s not a great option at all, but it’s still better. Prevention Rick: What can an owner do to prevent this in the first place? Mike: The key is planning ahead. Waiting until you're desperate limits your options and leads to bad decisions. That’s why I recommend at least 13 weeks on a rolling basis. That 3 months can be enough time to spot problems in advance. Evidence-based financial planning is your first line of defense. Use reliable past data, straight-line forecasts for the future, and scenario planning for possible major changes to make deliberate and informed financial decisions. The second line of defense is operational strength—consistent billing practices, disciplined cost control, and dependable revenue performance. Together, these form a resilient foundation and reduce the likelihood of relying on high-cost or predatory financing. Finally, the third line of defense is being proactive: use your control over the business to make changes to fit your situation. If you see cash becoming tighter, reduce expenses, don’t pay your bills early, and try to collect your receivables earlier. Business owners have the power to act – to steer the business away from a cash crunch just as surely as you’d steer your car away from a brick wall. In this framework, I often highlight to owners the importance of the four V’s: Volume, Velocity, Variability, and Value. Effective planning enables a business to manage the Volume of transactions and maintain a healthy Velocity of cash inflows, keeping the business ahead of financial obligations. Strong operations help reduce Variability in performance and increase the Value created from each dollar of revenue. Businesses that measure and optimize around these four pillars are far better positioned to withstand pressure and avoid financial traps. Final Advice Rick: Any closing thoughts? Mike: You can’t fix a weak business model by borrowing more money. And no one should sign a financing agreement without knowing the true cost of capital. MCAs offer speed, but they erode control. My mission is to help founders and operators protect their flexibility and make decisions like owners—not just borrowers. Michael Princi is an experienced owner, operator, investor, and advisor who brings a practical, disciplined approach to building and scaling businesses. A graduate of West Point and former Army officer, he applies clear thinking and structured leadership to help companies align strategy with execution. Through his work with CerteVerus AI and Thoughtstorm, Michael partners with founders, executives, and investors to unlock value, improve performance, and drive sustainable growth. You can find Mike at mike@thoughtstorm.com. If you have any questions about this article, the use of MCAs in your business, how to project and plan your cashflow, or the development and implementation of sound planning policies and procedures, please contact Richard J. Colosimo, Esq. (rcolosimo@olenderfeldman.com or 908-964-2480).

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump. OBBBA amends, among others, provisions of Section 1202 of the Internal Revenue Code (IRC) as it pertains to qualified small business stock (QSBS). Immediately prior, on June 30, 2025, New Jersey Governor Murphy signed into law Bill A4455/S4503 (NJ QSBS Exemption) aligning IRC Section 1202 on behalf of New Jersey based taxpayers. Background QSBS is a U.S. tax incentive benefitting eligible stockholders in early-stage companies. QSBS provides an exclusion, subject to limits described below, on capital gains tax for U.S. federal tax purposes on the divestiture of stock from such companies. And, beginning in tax year 2026, New Jersey taxpayers will have the ability to claim the NJ QSBS Exemption for the purposes of N.J. state tax purposes. The intent of QSBS under the IRC and NJ QSBS Exemption seeks to promote investment in early-stage companies and reward founders/employees in a stock sale. QSBS Qualifications & OBBBA Changes The issuance of QSBS is only available to U.S. C-corporations. Such company structure typically allows companies to retain earnings at a lower tax rate and promote company growth. Moreover, if you are a venture backed company, you will most likely be forced into becoming/converting to a U.S. C-corporation. Additional criteria for issuing QSBS is that (i) the stock needs to be issued directly by the company, and (ii) the company needs to be an active small business as prescribed under the IRC. Furthermore, it must meet the thresholds to which OBBBA amends for QSBS issued after July 4, 2025: QSBS Thresholds QSBS Disqualification It is important to note that certain rules continue to apply to companies being disqualified from issuing QSBS based on certain company activities such as stock repurchases, cash management of investments, and exceeding gross asset thresholds in fundraising activities. Conclusion Taken together, OBBBA changes make QSBS more flexible, more generous, and accessible to a broader swath of companies in the startup ecosystem allowing many early investors and founders/employees to realize meaningful tax benefits. If you have any questions about this Alert, how OBBBA impacts your business, explore the formation/conversion of a C-corporation structure, or require a QSBS attestation letter for your stockholders, please contact Kurt Olender (kolender@olenderfeldman.com), Paul Lee (plee@olenderfeldman.com) or Niharika Reddy (nreddy@olenderfeldman.com).

What Is A Special Purpose Entity? Richard Colosimo: Mike, thanks for joining us today. In your career, you’ve been a consultant and a CFO and an M&A professional, and an investor and founder. Today, I’m hoping you can give us some advice for people entering into small investment partnerships, which typically take the form of a special purpose entity. Let’s dive right in—what exactly is an SPE, and why do investors use them? Michael Princi: Glad to be here. A special purpose entity, or SPE, is a legal entity created to fulfill a specific, narrow purpose—typically to hold a single investment or asset. They’re used across many sectors and especially in real estate and private equity of all kinds. Most people will see these in smaller deals. In big deals, they’re used but only in the corporate org chart of a deal; typical investors are limited partners in a venture or PE fund that is a limited partnership. But in smaller deals, such as when a bundler is bringing a number of investors together in a single entity to make an investment in a portfolio company, that entity will almost always be an SPE (or should be!). An all but mandatory feature is that they’re “bankruptcy remote.” That means the entity is legally isolated from the parent company’s financial troubles (or those of its portfolio company). If something goes wrong with the sponsor – the investors, creditors generally can’t go after the assets inside the SPE. This insulation makes SPEs ideal for managing risk for investors in these kinds of multiple-investor entities. How Do SPEs Operate? Rick: That sounds important if you’re investing with other people. So, how do SPEs typically operate? Mike: Most SPEs are and should be passive. They’re not businesses that sell goods or offer services. Instead, they hold something—often equity in a real estate development, a subsidiary company, or a portfolio of assets. There should be no day-to-day activity and very limited monthly activity. Because of that, you won’t see regular income or operating cash flows during the life of the investment. The most common cash transactions would be: Capital contributions (inflows) from investors, usually at the start or occasionally for planned expenses. Capital investment (outflows) into the portfolio investment. Operating income distributions (inflows from the portfolio investment) Tax distributions (inflows and outflows) to cover pass-through tax obligations for the SPE or investors, respectively. Liquidating distributions at the end, when the underlying investment is sold or exited. Rick: It seems like SPEs aren’t designed to generate cash during the holding period. Mike: Right. An SPE is usually not an income-generating engine. All the capital flows into the investment. It often doesn't flow back out until there's an exit. If you’re managing one, you can’t just assume you can count on internal cash flow to cover even basic costs—like tax filings or accounting fees. How Are SPEs Funded? Rick: That brings us to financial planning. What sort of costs do SPEs typically face, and how should they be funded? Mike: Great question. Even “quiet” entities incur costs. For example: Annual tax prep State filing fees Audit or financial statement preparation Legal maintenance, especially for compliance These costs might be small individually, but they add up over time. If the entity doesn’t generate operating income, the manager needs to plan beforehand how those expenses will be paid. Will you hold back a reserve? Will you do capital calls? Do you have an agreement to fund these costs through another affiliated entity? If you don’t plan ahead, you’ll hit a big pothole when the bills come due. What Should SPE Managers Watch Out For? Rick: What are some of the traps that trip up SPE managers? Mike: One of the biggest traps is taking on debt that requires regular payments. If you’re using leverage in an SPE, you need to be very clear in your mind about how interest and principal will be serviced. If the investment isn’t generating cash, then you’re setting yourself up for a default unless you’ve already raised additional capital to cover debt service. And from a corporate finance perspective, raising equity at a high WACC to cover debt service at a low WACC points to a structural problem with how the whole investment has been designed. Debt is a real problem because there’s an outsider who is going to want those payments on time every month. Another common trap is signing up for obligations that assume future operating cash flow—things like fixed management fees, ongoing service contracts, or even routine overhead. Those only make sense in a company that has operating revenue, which the SPE doesn’t. They have to be managed tightly from a cash flow perspective, and to be done right, you have to plan for it in advance. These two problems showcase situations where failure to plan is planning to fail. Preventing Problems Rick: So does the cash flow statement help here? Mike: Yes. The cash flow statement is your best friend in understanding where you stand. It has three sections: CFO (Cash Flow from Operations) – usually zero in an SPE. CFI (Cash Flow from Investing) – mostly shows outgoing flows to acquire or improve assets. CFF (Cash Flow from Financing) – where new equity or debt comes in or is paid off. If your CFO and CFI are not producing new cash, which is what is expected, then the only source of new cash is CFF—bringing in money from outside. That’s why it’s so important to structure your SPE carefully and communicate expectations to investors early, before you bring money in. If you’ll need additional equity in year 3 for legal or tax work, that better be in the plan. No one likes surprises that didn’t have to be surprises. Rick: Let’s talk about financial controls. What kind of controls should a well-managed SPE have? Mike: Even if your SPE has no regular operations, you still need solid financial controls. These include: Monthly financial statements – even if they show little activity, transparency builds trust. You can’t manage what you don’t measure. Clear documentation of all capital flows – when money came in, where it went, and what’s still available. A financial forecast or capital plan – this should show expected cash needs, such as filing costs, legal fees, and reserve planning. For an SPE, this is something you can plan. Remember, it’s not an operating business. The more passive the entity, the more important it is to plan ahead and also communicate proactively. Investors may forget that the entity needs even a few thousand dollars a year to stay in good standing. Avoiding Insolvency Rick: Suppose you didn’t plan well—what happens when an SPE runs out of cash? Mike: That’s when things get uncomfortable. If you haven’t reserved enough or communicated the need for future capital, you have limited options. You may need to: Call for more equity from your existing investors—which can be tough if the request is unexpected. Bring in bridge financing, if appropriate—but again, you’re borrowing into a non-cash-generating entity. Fund expenses personally or through a sponsor, which may not be feasible or fair. These approaches require a mechanism to recapture them, which means more expenses if it’s not already in your documents. This is why early planning and ongoing communication are critical. Solvency isn’t just about having more assets than liabilities—it’s more often about having enough liquidity to meet obligations as they come due. You can have $20m in stock in a unicorn startup, but if you don’t have $5000 for tax prep for the SPE and investors, you’re technically insolvent. Rick: And that label can cause all kinds of mischief across multiple levels and contracts. How can an SPE manager avoid getting to that point? Mike: A few best practices go a long way: Model out all expected expenses over the life of the entity, and include a contingency factor, a cushion for unexpected expenses. Hold back reserves from the initial capital raise to cover non-investment costs. This way, you solve the problem once, upfront. Establish a formal capital call policy, even for minor costs—so no one is surprised later. Without a mechanism, everyone is forced to figure out a plan and then get people to agree. That takes time and money that certainly weren’t in your budget either. Issue financials regularly, and make sure your cash position is always clear. And most importantly, never assume there will be operating cash flow or future raises to rely on. If you treat every dollar you hold as all you’ll get, you’ll stay disciplined. Final Advice Rick: Final thoughts for people working with SPEs? Mike: Don’t be lulled into thinking “passive” means “low maintenance.” SPEs require careful design and active oversight, especially around capital planning and financial control. If you handle the cash flow side with foresight and transparency, your SPE will do exactly what it’s meant to: quietly and efficiently serve a specific purpose, without surprises. Rick: Thank you! This was incredibly insightful. Mike: Glad to help. If more investors understood the inner workings of SPEs, we’d see far fewer problems down the road. Michael Princi is an experienced owner, operator, investor, and advisor who brings a practical, disciplined approach to building and scaling businesses. A graduate of West Point and former Army officer, he applies clear thinking and structured leadership to help companies align strategy with execution. Through his work with CerteVerus AI and Thoughtstorm, Michael partners with founders, executives, and investors to unlock value, improve performance, and drive sustainable growth. You can find Mike at mike@thoughtstorm.com. If you have any questions about this article, using SPEs, a manager’s duty to carry out long-term planning, or how to project and plan your cashflow, please contact Richard J. Colosimo, Esq. (rcolosimo@olenderfeldman.com or 908-964-2480).

More businesses are attempting to use AI to perform a variety of tasks that legal counsel would typically perform, including: draft contracts, review and summarize documents, conduct legal research. The reality is that while AI can do great things, there are tremendous risks and pitfalls in using AI to perform such legal services, the results of which can be catastrophic, and very often increase legal fee expenditures. Why is your “AI lawyer” potentially (likely) wrong? A few simple reasons: Garbage in, garbage out. The information that AI provides is highly dependent on the accuracy of the query. If the end user does not fully understand what they are looking for or trying to accomplish, or they phrase what they want incorrectly, then the likelihood that a wrong answer is provided increases exponentially. You don’t know what you don’t know, and neither does AI. While many legal services may seem “easy” or “routine”, the reality is that providing even simple legal answers requires experience and knowledge that non-lawyers rarely have. More to the point, neither you, nor AI, know if the answer that is provided by AI (whether an answer to a legal question or the drafting of a document) is correct unless an experienced attorney has reviewed the results. AI does not, actually, know anything. It is important to understand that AI does not “think” or “solve problems.” Rather, it is a highly efficient information gathering and parsing technology that uses probability to determine whether information it finds is the most likely information to be the correct answer to the question posed. Said another way, it searches the internet, and the information that shows up the most can often be delivered as the “right” answer when, in fact, it is not. AI can hallucinate. AI has been known to make things up in an effort to make the user happy. There have been numerous examples, some with very serious consequences. Search “AI hallucinations in legal cases” and you will find myriad examples of people, including lawyers, getting caught by AI. Breach of Confidentiality: There is no attorney-client privilege when providing information to AI. Most AI users also do not fully understand the confidentiality or lack thereof of information they input. A recent analysis found that by using AI to search for other AI inquiries only, you could actually learn much about the people using AI just from the information the users sought which was not protected. In addition, providing certain information to an AI platform may breach contractual or other legal obligations of confidentiality, or you may expose sensitive information to the public. On the other hand, by leaving out sensitive or confidential information, you may not provide AI with sufficient or complete information to obtain the most thorough and thought out answer resulting in the potential failure of the very purpose for which AI was used in the first place. Unknown Biases: Each AI system was developed differently with different inherent biases and limits of which the user may often not be aware. This is why different AI systems often come to different conclusions or provide different output even where the input is the same. A non-attorney using AI to provide legal services is unlikely to have any idea of whether the AI output is accurate, effective or proper under the circumstances. Lack of Accountability: Attorneys are accountable to their clients and to well-known ethical codes of conduct. Attorneys are required to carry malpractice insurance. Attorneys are educated in the law and continue their training throughout their career and unlike with AI, clients often choose their attorney based on this experience. AI, on the other hand, has zero accountability and zero training on the law. If AI makes a mistake, the user is out of luck, and more significantly, the user may never even know about it until it is too late. Bottom line – you can use AI as a head start on solving a legal problem or to create a legal document, but the final outcome should be reviewed by qualified legal counsel. This is not a pitch for legal services – it is a warning that relying solely on AI for services provided by qualified legal counsel will very likely result in a bad outcome. For more information on the use of AI in your business operations and related legal issues, please contact Michael Feldman, Esq., at mfeldman@olenderfeldman.com or Kurt Olender, Esq., at kolender@olenderfeldman.com.

Traditional NDAs weren't designed for a world where employees and contractors routinely interact with AI tools for work. When someone inputs confidential information into most AI platforms, that data doesn't necessarily just disappear. It might be used to train future models, stored indefinitely, or accessed by the platform provider. Some platforms explicitly state they don't use inputs for training, but their privacy policies can change, and contractual protection is critical. Why Current NDAs Fall Short Most NDAs were drafted before anyone imagined employees and contractors would be having conversations with artificial intelligence about work projects. Yet that's exactly what's happening across industries every day. The problem isn't necessarily intentional wrongdoing but it's that people don't realize they're potentially violating confidentiality when they ask an AI tool for help with a presentation or to debug some code. Essential Updates Start with a broad prohibition. Effective language may include: "Recipient shall not input, upload, or provide any Confidential Information to artificial intelligence systems, machine learning platforms, or automated content generation tools without prior written consent from Discloser." Define "AI Tools" broadly. Rather than naming specific platforms, stronger definitions use: "AI Tools include any artificial intelligence, machine learning, or automated system that processes, analyzes, or generates content based on user inputs." This catches everything from ChatGPT to industry-specific AI applications. Build in flexibility for legitimate use. Complete AI prohibition isn't always realistic. For clients who want some AI usage permitted, effective frameworks include an approval process: the AI tool must be pre-approved, offer enterprise-level protections, and interactions must occur through approved platforms/accounts with proper data protection agreements. Require sanitization when AI use is allowed. If a client permits any AI interaction with their information, data sanitization requirements are essential. All identifying details, specific metrics, and proprietary methodologies must be removed before any AI interaction. Practical Considerations Don't just copy and paste AI language into your existing NDA template. Consider how these new provisions interact with your current confidentiality definitions, return of confidential information clauses, and remedy provisions. I've seen instances where new AI restrictions contradicted existing language about permitted disclosures. Also, think about enforcement. How will you know if someone violates these AI provisions? Technical monitoring may be necessary for organizations with high-value confidential information. For more information, contact John Billiris at jbilliris@olenderfeldman.com

In today’s business landscape, contracts that automatically renew (commonly known as “evergreen” or “autorenewal” contracts) are becoming increasingly prevalent. While these arrangements may appear convenient at first glance, the fine print often contains provisions that can restrict flexibility, impose long-term commitments, or escalate costs over time. Here is what business owners need to know before signing an autorenewal contract. What Is an Autorenewal Contract and Why Should You Care? An autorenewal contract is one that automatically renews at the end of its initial term unless a party provides written notice of termination within a specified timeframe. Failure to provide written notice within the timeframe required will result in the contract being renewed for an additional term. Here is an example of an autorenewal clause: “The initial term of this Agreement shall be one (1) year commencing as of the date hereof. Thereafter, the term of this Agreement shall automatically renew for successive one (1) year terms unless either party gives written notice of non-renewal at least sixty (60) days before the initial term or then-current renewal term.” Under the terms of the above provision, if neither party provides the required advance written notice, the contract renews – whether or not that was the parties’ intention. While it may be possible to negotiate termination after missing the deadline, most parties will enforce the renewal term. Key Considerations Before Signing One of the most important things to understand about any autorenewal contract is its terms. Understanding the “T.E.R.M.” of each contract can help you avoid unintended consequences: T – Term Length: Duration of the initial contract term (e.g., 1 year, 3 years) E – Exit Notice Period: How far in advance must notice be given to terminate the contract (e.g., 30, 60, 90 days prior to the contract’s renewal date). R – Required Notice Method: The required method to terminate (e.g., email, certified mail to a specified address/department) M – Modifications Upon Renewal: Any changes that take effect upon the contract renewing for another term (e.g., price increases or additional obligations) To avoid missing notice periods and unintentionally locking your business into a lengthy renewal term, you should calendar the relevant time periods/notice requirements after signing to ensure you do not miss the deadline to terminate the contract. What To Avoid Don’t Sign If You’re Uncertain: If you are unsure about the long-term commitment or financial implications, avoid locking into an autorenewal contract. However, if the counterparty insists on an autorenewal provision, consider the following strategies: Shorten the Renewal Term: Negotiate a shorter renewal period, such as six months instead of a full year, to maintain flexibility while still benefiting from the arrangement; Include an Early Exit Clause: Incorporate a clause that allows the business to terminate the contract early for a fee that is reasonable and manageable; or Implement Performance Metrics: Include benchmarks, service levels, or performance metrics to ensure the contract continues only if it provides measurable value to the business. Don’t Rely on Goodwill: Even longstanding vendor relationships can turn into litigation if the contract’s terms are not strictly observed. Consequences of Missing the Termination Deadline Failing to properly terminate an autorenewal contract can have serious consequences and result in: Automatic renewal and the legal obligation to perform under the new term. Litigation risks, especially if you attempt to cancel after missing the deadline to provide notice of nonrenewal. Are Autorenewal Contracts Enforceable? Generally, yes. Most jurisdictions consider these contracts enforceable, but the enforceability may depend on whether the renewal terms are disclosed and whether the agreement complies with applicable consumer or commercial protection laws. Bottom Line Autorenewal contracts are not inherently bad; however, they require close attention. Before entering into or attempting to exit an autorenewal contract, seek legal counsel to safeguard your interest and avoid committing your business to obligations it cannot afford. For more information, contact Joseph Chletsos at jchletsos@olenderfeldman.com.

What Is the “Mansion Tax”? The New Jersey Mansion Tax is a transfer tax that applies when certain classifications of real estate are transferred for 1 million dollars or more. It is collected at closing and must be paid before the deed can be recorded. The tax applies to the sale/transfer of (a) residential homes, (b) commercial properties (including office and retail buildings, warehouses, farmland, but excluding industrial properties and vacant land) and (c) ownership interests in entities (LLCs, corporations, partnerships) that own such real estate (“Controlling Interest Transfer Tax”). What changed? On June 30, 2025, the new provisions were signed into law, revising New Jersey’s Mansion Tax and Controlling Interest Transfer Tax (collectively the “Tax”). The provisions took effect July 10, 2025 for real estate contracts executed that day or later. Prior to the change, the Tax was a flat 1% tax on the purchase price and was paid by the Buyer for purchases over 1 million dollars. Going forward, the Tax will be a tiered rate structure starting at 1% for properties over 1 million dollars and rising up to, and capped at, 3.5% for properties over 3.5 million dollars. MOST IMPORTANTLY, the obligation to pay the tax has shifted from the buyer to the seller. Rate Structure. As such, for all sales subject to the Tax going forward, the Seller shall pay a tax based upon the sales price as follows: $1M–$2M → 1% $2M+–$2.5M → 2% $2.5M+–$3M → 2.5% $3M+–$3.5M → 3% Over $3.5M → 3.5% Grace Period. Contracts executed prior to July 10, 2025, are subject to the previous 1% “flat-tax” rate if the deed is recorded by November 15, 2025. Practical Impacts. Sellers need to budget for higher closing costs, particularly for properties above 2 million dollars. The shift means more tax exposure for sellers. Sellers must also be cognizant of the effect of small price increases over any threshold (e.g., $1.99M → $2.01M will double the Tax.) Buyers may see somewhat more favorable terms in negotiations since they no longer will have to pay the Tax, which could influence pricing. For pending transactions: check whether the transaction is subject to the 1% “flat-tax” rate. Timing is critical. Contracts executed before July 10, 2025 must have a recorded deed before November 15, 2025. If you have questions or concerns about this or any other real estate matter, please contact Jason Hawrylak at (908) 827-5537 or jhawrylak@olenderfeldman.com.

One question we hear frequently from our corporate clients is: “Do we really need Employment Practices Liability Insurance?” The answer is yes – EPLI is no longer optional. It’s an insurance necessity. What is EPLI? Employment Practices Liability Insurance (EPLI) is a type of insurance separate and apart from comprehensive general liability insurance and is expressly designed to protect businesses from the financial fallout of employment-related claims. These claims typically arise from allegations of discrimination, harassment, wrongful termination, retaliation, or other violations of state or federal employment law. Why EPLI is a Necessity Coverage Beyond General Liability: Standard commercial general liability (CGL) insurance policies do not cover claims arising from or related to employment decisions such as hiring, firing, promotions, or employee discipline. EPLI is specifically designed to cover these gaps in coverage, providing essential protection where CGL coverage stops. Rising Employment Litigation: Employment claims are on the rise and defending them is expensive. The average cost to defend and settle a single employment claim can range from $160,000 to over $300,000. Annual premiums for EPLI, on the other hand, typically range from $2,500 to $4,000 for small businesses. Even cases that settle early can cost tens of thousands of dollars. Adding to the risk, many employment statutes include fee-shifting awards, meaning that if the employee wins at trial (even a small “nuisance value” award) the employer may be ordered to pay all the plaintiff’s legal fees, which are often higher than the alleged damages. EPLI helps absorb both defense costs and potential award/settlement, ensuring the company is not left to front the entire bill. Protecting Leadership and the Company – EPLI coverage typically extends to directors, officers, and key decision-makers, shielding them from liability in employment-related claims. These added protections can be critical in attracting and retaining top talent at the executive level who want assurances of protection. Act Now to Protect Your Business It is important to remember that EPLI only covers claims made after the policy is in place. If an employer waits to secure coverage until an employee has already raised concerns or filed a charge or complaint, those allegations will almost always be excluded as a “pre-existing” claim. Even if the claims occur during the coverage period, if there are allegations that predate the coverage period the carrier may have the ability to disclaim coverage. This is why employers should obtain EPLI coverage now, before issues arise, or risk a potential claim being excluded from coverage. Make EPLI Part of Your Insurance Portfolio EPLI is more than a “nice-to-have” policy, it is a strategic safeguard for any employer. Obtaining coverage proactively – before allegations arise – is essential to mitigate risk and ensure your business is fully protected. We recommend reviewing your full insurance portfolio, including your CGL, D&O, Business Interruption, and Workers’ Compensation policies, to ensure EPLI coverage is in place and sufficient for your organization’s needs. Taking this step proactively can protect your business, your leadership team, and your bottom line from the significant costs associated with employment-related claims. For more information on compliance, please contact the OlenderFeldman Employment Practices Group here.

When preparing a home for sale, owners don’t simply hang a sign on the lawn. They ensure the foundation is solid, the interior inviting, and the curb appeal attractive. Preparing a business for sale—whether to a strategic buyer, private equity group, or individual investor—requires the same intentionality and discipline. A well-prepared business reduces buyer concerns, enhances valuation, and creates leverage at the negotiating table. Below are three critical areas every business owner should address before going to market: Check the Foundation Just as an inspector examines the structural integrity of a home, buyers will begin with the fundamentals of a business. Confirm corporate governance documents (articles, bylaws, shareholder agreements) are current and consistent. Ensure financial statements are accurate, organized, and supported by reconciliations. Verify that tax filings are up to date and resolve discrepancies or exposures. Address outstanding compliance obligations such as licenses, permits, or regulatory filings. Prepare the Interior Buyers want to see that the “inside” of the business—its people and operations—is well-structured and scalable. Review employee classifications (W-2 employees vs. independent contractors) and ensure job descriptions and contracts are clear. Audit employee handbooks, HR policies, and benefits programs for compliance and competitiveness. Examine vendor contracts (insurance, IT, HR, payroll, professional services) for renewal dates, termination rights, and potential risks. Catalog debt obligations, leases, and financing arrangements; resolve or renegotiate unfavorable terms. Document key operational processes (sales, customer service, supply chain) to demonstrate resilience and transferability. Exterior Cleanup & Curb Appeal First impressions influence buyer confidence. Prior to selling a business, owners should ensure external-facing documents and brand reflect strength and professionalism. Review and update client contracts to ensure they are enforceable and favorable. Confirm privacy, cybersecurity, and data protection policies meet regulatory standards and client expectations. Evaluate intellectual property protections (trademarks, patents, proprietary processes) and register or strengthen where needed. Mitigate customer concentration risks by diversifying accounts and demonstrating stable revenue streams. Refresh marketing collateral and brand presence to highlight growth potential. The Takeaway Just as staging a home minimizes surprises for buyers, staging a business enhances its value and shortens the path to closing (saving the owners time and resources). Preparation is not cosmetic—it is strategic. The more proactive you are, the greater your leverage during negotiations. If you are considering an exit in the next two to three years, begin the staging process today. A well-prepared business signals strength, mitigates risk, and positions a business for maximum value in the marketplace. For more information, contact Melissa Green: mgreen@olenderfeldman.com

When selling your company, one of the most important sections of the purchase agreement is the representations and warranties. These are the statements and promises you make to a buyer about your business—its assets, operations, contracts, finances, and liabilities—at the time of sale. They give the buyer confidence that what they’re buying is exactly what they expect. If a statement later proves false, the buyer can seek compensation under the indemnification provisions of the agreement. Due Diligence and Disclosure Before closing, buyers conduct due diligence—a deep dive into your company’s records, contracts, and financials. This process determines what representations and warranties appear in the purchase agreement. Sellers typically provide a disclosure schedule listing exceptions to these representations (for example, permitted liens, known lawsuits, and contract limitations). Complete and accurate disclosure helps limit post-closing disputes and protects the seller from future claims. Risk Allocation and Survival Periods Representations and warranties are the core of risk allocation in a deal. Together with disclosure schedules, survival periods (how long a buyer can bring a claim), and indemnification provisions, they define who bears the financial risk if something goes wrong after closing. Fundamental representations (like ownership of the company) often survive indefinitely. • General representations (like accuracy of contracts) may survive for 12–18 months. • Buyers and sellers also negotiate baskets (minimum claim thresholds) and caps (maximum liability limits) to manage exposure. Stock vs. Asset Sales In a stock or equity sale, the buyer purchases the entire company—including all assets and liabilities—so representations cover the business as a whole. In an asset sale, the buyer purchases selected assets and assumes only specified liabilities, so each asset and obligation must be clearly listed. For example, a vendor debt not disclosed in an asset deal stays with the seller. Common Representations and Warranties Most agreements include representations covering: Organization and Authority – confirming the company is validly formed and authorized to sell. • Capitalization – confirming ownership and outstanding equity interests. • Financial Statements and Liabilities – ensuring accuracy and completeness. • Material Contracts, Customers, and Suppliers – verifying key agreements are enforceable and principal terms. • Taxes and Legal Compliance – assuring all filings, payments, and regulations are current. • Intellectual Property, Real Estate, and Insurance – confirming ownership and coverage. • Employment and Benefits – ensuring compliance with labor and benefit laws. Practical Tips for Sellers Be transparent: Fully disclose exceptions to avoid post-closing claims. • Use qualifiers: Terms like “to the seller’s knowledge” or “material” can limit liability. • Align your team: Coordinate disclosures with your attorney, accountant, and advisors. • Negotiate fairly: Set realistic baskets, caps, and survival periods. • Consider insurance: Representation and warranty insurance can help cover unexpected claims. Final Thought Representations and warranties shape both the economics and peace of mind in a sale. Understanding them—and working closely with experienced advisors—helps business owners protect their sale proceeds and ensure a smoother, lower-risk transaction. For more information, contact Hank Forcier hforcier@olenderfeldman.com or Ryan Carroll rcarroll@olenderfeldman.com