Page 1 Recording of this session via any media type is strictly prohibited. Page 1 ICM002 Buy a Company, Buy a Lawsuit

Page 2 Recording of this session via any media type is strictly prohibited. Speaker 1- Speaker 2 - Rafael RiveraMichael Smith Insurance ManagerChief Operating Officer General Electric CompanyGlobal Commercial Insurance - AIG Speaker 3 -Speaker 4 - Koji FukumuraSusanne Murray PartnerExecutive Vice President Cooley LLCAlliant Insurance Services

Page 3 Recording of this session via any media type is strictly prohibited. Learning Objectives Know where Mergers and Acquisitions liability comes from – who might be liable Discover insurance due diligence methodologies Understand the challenges facing the insurance industry in addressing this exposure Identify limitation of coverage for M&A litigation under standard D&O policies

Page 4 Recording of this session via any media type is strictly prohibited. Current Trends In Mergers and Acquisitions Activities – Types of Deals Acquisitions – purchasing assets, purchasing entities (new subsidiaries) Mergers – combining two companies – the best of both worlds

Page 5 Recording of this session via any media type is strictly prohibited. Current Trends In Mergers and Acquisitions Activities – Types of Deals Divestitures – selling all or a part of an entity Divestitures – spinning off a subsidiary or business segment (initial public offerings)

Page 6 Recording of this session via any media type is strictly prohibited. Insurance Due Diligence – Before the Deal Insurance as part of the deal due diligence Gathering insurance information and documentation What are questions to ask?

Page 7 Recording of this session via any media type is strictly prohibited. Insurance Due Diligence – Before the Deal How does the acquisition fit into the insurance of the purchaser (is there an overlap?) Does the target have insurance needs not being met by the purchaser’s current insurance

Page 8 Recording of this session via any media type is strictly prohibited. Insurance Due Diligence – Before the Deal Indemnification and Insurance provisions in the transaction documentation Prior liabilities Mandatory purchase of insurance – substantially similar coverage, “no more than XXX%”, specified period

Page 9 Recording of this session via any media type is strictly prohibited. Insurance Due Diligence – Before the Deal Addressing prior liabilities Tail policy for all prior acts extended versus fresh limits length of tail Adding prior acts to purchasers ongoing policy

Page 10 Recording of this session via any media type is strictly prohibited. Insurance Due Diligence – Before the Deal What about other insurance products? Waiver of change in control Cancellation of other policies

Page 11 Recording of this session via any media type is strictly prohibited. Current Trends In M&A Claims Statistics on the number and types of claims Typical allegations Against the seller Against the purchaser

Page 12 Recording of this session via any media type is strictly prohibited. Current Trends In M&A Claims Trends in merger objection claims Recent decisions from the Delaware Chancery Court Dealing with parallel state court proceedings

Page 13 Recording of this session via any media type is strictly prohibited. Insurance Implications – Coverage for M&A Claims Is the claim a securities claim (as defined in a D&O policy)? Ramifications on insurance coverage if it is or isn’t a securities claim – distinguishing between public and private Is the claim a “bump up” claim? What does that mean? Ramifications on coverage

Page 14 Recording of this session via any media type is strictly prohibited. Insurance Implications – Coverage for M&A Claims Costs incurred in defending and resolving the M&A claim Increase in consideration paid Costs of complying with non-monetary relief Plaintiffs attorneys fees Regulatory fines and penalties

Page 15 Recording of this session via any media type is strictly prohibited. Insurance Implications – Coverage for M&A Claims How has the insurance industry responded? Retentions Sub-limits Allocation

Page 16 Recording of this session via any media type is strictly prohibited. Insurance Implications – Coverage for M&A Claims How has the insurance industry responded? Significant claims payments

Page 17 Recording of this session via any media type is strictly prohibited. Questions? Contact Information Speaker 1- Speaker 2 - Rafael RiveraMichael Smith General Electric CompanyGlobal Commercial Insurance – AIG Speaker 3 -Speaker 4 - Koji FukumuraSusanne Murray Cooley LLCAlliant Insurance Services