1. Overview of M&A/Joint Venture Negotiations Process By: Craig Owen White, Esq.

2. Disclaimer In compliance with requirements imposed by the U.S. Internal Revenue Service, we inform you that any Federal tax advice contained in this communication (or any handouts or downloads associated herewith) is not intended to be used, and cannot be used, for the purpose of (i) avoiding any penalties under the U.S. Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Nothing contained in this presentation is to be considered as the rendering of legal advice for specific cases, and attendees are responsible for obtaining such advice from their own legal counsel. This presentation is for educational and informational purposes only. The views of the presenter should not be construed as the views of Hahn Loeser & Parks LLP or any of its individual partners.

3. What is a Joint Venture? Two or more unrelated parties pool, exchange, or integrate some of their resources with a view to mutual gain, while at the same time remaining independent.

4. Why Joint Ventures? Flexibility Risk Sharing Easy for parties to set up Easy for parties to understand their roles and responsibilities Growth Potential Prelude to Acquisitions

5. Dirty Little Secret

6. Must Joint Ventures Fail

7. Why JV’s Fail Lack of Clearly Defined Goals Unrealistic Expectations Failure to Budget for Governance Financial Constraints of One of the Partners Lack of Loyalty to Venture by Partisan Employees Parties not committed to professionalism in the management of the Investment

8. Alternatives to Joint Ventures Merger or Acquisition Strategic Supply Agreement Cooperative Research and Development Agreement Strategic Alliance Agreements Teaming Agreement General or Limited Partnerships Investment in each other’s company

9. Client Interview Look, Listen and Learn ! Who is the Client ? Risk Profile Client’s Age and Experience Client’s Industry and Business Experience Client’s Business Model Client’s Financial Condition and Resources Other Stakeholders Banks Employees/Unions Government Suppliers Customers Other Creditors

10. Client Interview Look, Listen and Learn ! Who is the Client ? Risk Profile Client’s Age and Experience Client’s Industry and Business Experience Client’s Business Model Client’s Financial Condition and Resources Other Stakeholders Banks Employees/Unions Government Suppliers Customers Other Creditors

11. Client Interview Look, Listen and Learn ! Know the Environment Industry Standards and Gatekeepers Governing Law International Treaties Anti-Corruption Laws Tax Considerations Reputational Issues Risk Profile Client’s Age and Experience Client’s Industry and Business Experience Client’s Business Model Client’s Financial Condition and Resources Other Stakeholders Banks Employees/Unions Government Suppliers Customers Other Creditors

12. Time Constraints, if any Regulatory Approval, if any Governance and Stakeholder Approvals, if any Drafting Control Document Control (Data Rooms) Due Diligence and Discovery Process Governing Language Document Format Signing Authority and Process Use of Electronic Signatures and.PDF Schedules Initial Negotiations Identify Key Business Points Establish Business Etiquette Rules Documenting the Deal

13. Term Sheets and Letters of Intent Generally Not Binding Parties agree to “key” provisions of relationship Outline of the Transaction as to conditions and timing; guides the negotiations

14. Term Sheets and Letters of Intent What the JV will do? What the JV will not do? What partners agree not to do? Collateral Agreements Non Competition Licenses Supply Agreement Professional Services and Management Agreement Generally Not Binding Parties agree to “key” provisions of relationship Outline of the Transaction as to conditions and timing; guides the negotiations

15. Initial Capitalization Additional Need for Funds Capital Calls on Partners Third Party Debt Financing Guarantees and Additional Risk Valuing Equity of the JV Tax Consequences FINANCIAL Major JV Issues Who will own majority interest? How will minority interest be protected ? How will day-to-day decisions be made and by whom? How will disagreements be resolved ? How will the partners get paid, when and how? Access to Information OWNERSHIP

16. Valuation of what has been created Agreed Valuation Procedures Fate of the Employees Buy/Sell Rights Put and Call Rights Public Statements Continuing Licenses Non-Competition Division of IP and Other Assets BREAKING UP Major JV Issues What opportunity belongs to the JV? CORPORATE OPPORTUNITIES

17. What you are willing to invest to achieve the objective Know the time period for the return Know what non-monetary benefits and risks might be present Rules of the Road Rule # 2: Know What You Need/Want

18. TEAM WORK IS ESSENTIAL Assemble a team of experts Tax Competition Fraud and Corporate Corruption Rules of the Road Rule # 3: Know Your Capabilities and Limitations

19. Make your client look good If you can not make your client look good, at least make them look innocent. Rules of the Road Rule # 4: CHECK YOUR EGO AT THE DOOR

20. Be Flexible and Creative but never stupid. Be prepared to walk away. Joint Ventures are all about relevance and economic reality – not personality and pride. Know Your Exits Up Front Know How to Get the Exit(s) Rules of the Road Rule # 5: Never Fall in Love with the Deal

21. Due Diligence Must be On Going and Robust Evaluate Character and Motive of Counterparties Counterparty Capabilities to Perform Title and ability to Deliver Key Assets Authority to Convey Key Assets and to perform Impact on Stakeholders Public Perceptions Employee Buy-in and Participation INFORMATION DISCOVERY PROCESS TO CONFIRM RISK, PRICE AND VALUE

22. Due Diligence Must be On Going and Robust Evaluate Character and Motive of Counterparties Counterparty Capabilities to Peform Title and ability to Deliver Key Assets Authority to Convey Key Assets and to perform Impact on Stakeholders Public Perceptions Employee Buy-in and Participation INFORMATION DISCOVERY PROCESS TO CONFIRM RISK, PRICE AND VALUE

23. STANDARD REPRESENTATIONS AND WARRANTIES Authority Title to Assets Accuracy of Risk Disclosures Financial Status and Performance Labor Relationship Litigation Government Sanctions Appropriate Business Licenses TYPICAL TOPICS AND CONCERNS Representations and Warranties Scope of the Rep or Warranty Time Knowledge Accurateness Completeness Subject to Counterparty’s Owe Diligence Materiality

24. LYING TO YOUR COUNTERPARTY, CLIENT OR THE GOVERNMENT IS BAD AND MOST LIKELY UNETHICAL AND ILLEGAL Rules of the Road Rule # 1:

25. LYING TO YOUR COUNTERPARTY, CLIENT OR THE GOVERNMENT IS BAD AND MOST LIKELY UNETHICAL AND ILLEGAL LYING TO YOURSELF IS JUST PLAIN STUPID ! Rules of the Road Rule # 1:

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