. Entity Changes Consolidation Merger LBO Growth By Acquisition Stock sale or swap Assets sale Assets and liabilities sale Retraction 1

. Key Issue Is Type Of Purchase Acquisition Specifically reject acquisition of liabilities Stock only Assets including name, goodwill, customer list Consolidation Merger Will not always hold up 2

. Acquisition “Acquisition” is a generic term referring to any type of purchase by one entity of another Stock Purchase or Swap Assets Purchase or Assets and Liabilities 3

. Acquisition Basics Assets Only This may not necessarily transfer liabilities to the buyer Each products or tort case as to case law in that state, the purchase agreement and the facts of the case Assets & Liabilities Acquiring company can assume past incurred and future liabilities arising out of past operations 4

. “Consolidation” is the combination of two separate corporations into a single new entity The law views mergers and consolidations as continuations of the previous company(ies) Almost without exception, the current company will be held liable for actions of the preceding company 5

. Merger A contractual and statutory process in which one (survivor) company acquires all assets and liabilities of another Owners receive either payment or ownership equity of surviving company The old company is absorbed into the survivor and ceases to exist 6

. Leveraged Buyout Also known as "leverage acquisition” Involves the purchase of the assets or stock of a business enterprise under a financing arrangement involving a significant amount of debt and very little or no equity capital-- primarily by using the assets of the acquired enterprise as collateral, and the acquired earnings stream to amortize (or retire) the debt 7

. Summary Entity changes require knowledgeable advisors Lawyer Finance expert CPA Insurance agent/broker Start dialogue with seller / buyer early Provide confidentiality agreement Role is to minimize risk not stop the transaction 8