1. 1.WHO HOLDS PRIVILEGE DURING AND AFTER M&A TRANSACTIONS? 2.AVOIDING WAIVER OF PRIVILEGE DURING M&A TRANSACTIONS AGENDA ACC - M&A From the Seller’s Perspective – March 29, 2016 ATTORNEY CLIENT PRIVILEGE & M&A TRANSACTIONS David Meisels – VP & General Counsel, D&M Holdings Inc.

2. (2) March 29, 2016 ACC – M&A from the Seller’s Perspective WHO HOLDS THE PRIVILEGE DURING AND AFTER M&A TRANSACTIONS? Privilege considerations generally  Be aware that privilege protection, especially for in-house counsel, differs by country  US, Canada, UK, Australia – Generally have in-house privilege  Germany, Japan, China – Limited  France, Mexico - None

3. (3) March 29, 2016 ACC – M&A from the Seller’s Perspective WHO HOLDS THE PRIVILEGE DURING AND AFTER M&A TRANSACTIONS?  Privilege held by company  Which company?  Parent  Subsidiary  Seller Shareholders  Generally follows engagement letter  Consider separate counsel for target, parent or seller shareholders

4. (4) March 29, 2016 ACC – M&A from the Seller’s Perspective WHO HOLDS THE PRIVILEGE DURING AND AFTER M&A TRANSACTIONS?  What happens to privilege on sale of company?  Transaction type:  Stock – generally transfers to buyer  Asset – differing views but consider addressing in sale agreement  Division – similar to sale of substantially all assets

5. (5) March 29, 2016 ACC – M&A from the Seller’s Perspective WHO HOLDS THE PRIVILEGE DURING AND AFTER M&A TRANSACTIONS?  What happens to privilege on sale of company?  Courts have widely divergent opinions  If target is sold, unless parent/shareholders retain counsel, privilege likely transfers to buyer  Issue when counsel is advising parent and target  For those communications with target, privilege may be transferred to buyer even if parent retains counsel  If privilege transfers and dispute arises between seller and target, seller won’t be able to use its prior (possibly its current) counsel in dispute  Same potential issue with in house counsel advising parent and target

6. (6) March 29, 2016 ACC – M&A from the Seller’s Perspective WHO HOLDS THE PRIVILEGE DURING AND AFTER M&A TRANSACTIONS?  What happens to privilege on sale of company?  If asset/division sale – are substantially all assets transferred and business continuing?  More likely that privilege relating to those assets is transferred  But some courts refuse to transfer privilege if asset sale  Can attempt to include language in sale document indicating who holds privilege – not all courts will follow

7. (7) March 29, 2016 ACC – M&A from the Seller’s Perspective AVOIDING WAIVER OF PRIVILEGE IN M&A TRANSACTIONS  Be very cautious in communications that seller’s counsel has with target or buyer  Common Interest Agreement with potential buyer can help  Be careful with transferred assets – employees, computers, emails

8. (8) March 29, 2016 ACC – M&A from the Seller’s Perspective AVOIDING WAIVER OF PRIVILEGE IN M&A TRANSACTIONS  Common Interest Doctrine  Applies to legal issues only, not business issues  Buyer and seller need to have a common interest in sharing information re: legal dispute  Courts differ on when common interest doctrine applies in M&A context  Due diligence phase  Letter of Intent  Signed sale agreement

9. (9) March 29, 2016 ACC – M&A from the Seller’s Perspective AVOIDING WAIVER OF PRIVILEGE IN M&A TRANSACTIONS  Common Interest Privilege  Limit the information that is provided between parties to critical items  Limit the number of people at buyer that can access the information  Limit the number of parties, if beyond, who sign the common interest agreement  Limit written communications, use verbal, webex, etc  Useful for active and threatened litigation

10. (10) March 29, 2016 ACC – M&A from the Seller’s Perspective AVOIDING WAIVER OF PRIVILEGE IN M&A TRANSACTIONS  When transferring IT assets (computers, emails), make sure to remove potentially privileged communications between target’s employees and the parent’s counsel

11. (11) March 29, 2016 ACC – M&A from the Seller’s Perspective M&A TRANSACTIONS AND ATTORNEY CLIENT PRIVILEGE  Additional information – See: “Attorney client privilege in M&A deals - lessons from recent cases for preserving and controlling the privilege” http://media.straffordpub.com/products/attorney-client-privilege-in-m-and-a-deals-lessons-from- recent-cases-for-preserving-and-controlling-the-privilege-2015-12-21/presentation.pdf  OBTAIN OUTSIDE COUNSEL ADVICE

12. (12) March 29, 2016 ACC – M&A from the Seller’s Perspective M&A TRANSACTIONS AND ATTORNEY CLIENT PRIVILEGE THANK YOU