The Acquisition Term Sheet from the Seller’s Perspective By Conrad E. J. Everhard Jones, Day, Reavis & Pogue

2 When You Cut Your Deal, Don’t Stop Negotiating at the Purchase Price Structure Liquidity Personal Liability Employment Package Due Diligence Non-compete 1

3 Reduce Principal Terms of Deal To Writing (LOI or Term Sheet) 2

4 Avoid Public Disclosure of Transaction as Long as Possible 3

5 Bring Out Your Dirty Laundry at the Outset 4

6 Make Sure that Purchase Price is Liquid Market Risk Pre-Closing Market Risk Post-Closing 5

7 Market Risk Pre-Closing Two kinds of pricing: Fixed Exchange Ratio or Fixed Price Fixed Exchange Ratio: Share risks of upside\downside after announcement Fixed Dollars: Upside protection held by Buyer and downside protection held by Seller Collars, Floors, Price Protection, Closing Price

8 Market Risk Post-Closing Securities Laws - US, Europe, Asia Insider Trading Policies of Buyer Pooling Rules (Affiliates) Contractual Restrictions Market Conditions and Other Intangibles

9 Strategies for Enhancing Liquidity of U.S. Securities Insist on Registration Statement at Closing  Guarantee Trading Windows Do Your Due Diligence Don’t Become an Insider or Become a Super-Insider Early Publication of Combined Financials Hedge and Put Mechanisms, Price Protection

10 Don’t Give The Purchase Price Back Purchase Price Adjustment Representations and Warranties Personal Indemnities 6

11 Strategies For Limiting Liability Watch Out for Contingent Liabilities  No Bearing to Actual Loss Watch Out for Measurement Date Coordinate Interaction Between PPA and Indemnities (Don’t Double Count) Purchase Price Adjustment

12 Strategies for Limiting Liability Factor Exposure into Purchase Price Eliminate Post-Closing Effects from Liability Exposure Limit Recourse to Escrow Holdback  Risk Shifting and Catastrophic Exposure Representations and Warranties

13 Strategies for Limiting Liability Incentivize Buyer to Act Reasonably  Deductibles and Caps, Cost Sharing  Limit Survival Period of Warranties  Place Control on Third Party Claims  Put Legal Fees of Buyer at Risk Offer Alternatives  Comprehensive Due Diligence  Opinions of Counsel  Insurance, Others