1. Richard Phillips presenting at The IoD Conference on 10 November 2010 © Copyright Matthew Arnold & Baldwin LLP, 2010. All rights reserved.

2. Buying and Selling Private Companies Legal pitfalls and requirements Richard Phillips Partner, Corporate Team Materials are for generic presentation purposes only and do not constitute legal advice which may © Copyright Matthew Arnold & Baldwin LLP, 2010. All rights reserved. be relied on in any situation.

3. Overview 1.Preparing for potential buyers 2.Finalising the deal 3.The nature of the process 4.What each party requires and why 5.Spanners in the works

4. Preparing for Potential Buyers Start now Tidy up your business Micro Macro Appoint the right advisors Barriers to sale Price factors Know what you want to achieve Share sale Asset sale

5. Preparing for Potential Buyers Share sale/Asset sale Tax driven Liability Contracts Employees – when does TUPE apply and what is it? The job for your lawyer

6. Finalising the deal Heads of Terms Confidentiality Exclusivity Costs protection Realistic timeframe

7. The nature of the Process Due diligence and information gathering Documentation: To reflect commercial deal To allocate risk between parties Negotiation/meetings Finance aspects Dealing with employees TUPE Due diligence Final documentation will be the deal – not things said/done before Time commitments

8. What each party requires and why Buyer – protections Warranties Indemnities Restrictive covenants Seller As much risk free money as possible? Greater potential sum but more risk? Security for deferred consideration

9. Spanners in the works (1) Gulf in risk allocation Awkward other party Awkward other solicitor Relative size/sophistication of Buyer & Seller

10. Spanners in the works (2) Buyer is from another jurisdiction Third party difficulties Landlord Financiers Change of control Your Advisors Expect the unexpected

11. Summary Start now Take advice early Keep focussed on final objectives Be pragmatic Time commitments Anticipate problems

12. Contact Richard Phillips Partner, Corporate Team E: richard.phillips@mablaw.com T: 020 7842 3335 Matthew Arnold & Baldwin LLP - Solicitors 85 Fleet Street, London, EC4Y 1AE 401 Grafton Gate, Milton Keynes MK9 1AQ 21 Station Road, Watford WD17 1HT E: info@mablaw.com W: www.mablaw.com

13. These slides have been produced only for the purposes of illustrating a talk given by Richard Phillips on 10 November 2010. They are not intended to be relied upon by any party and cannot constitute advice. Matthew Arnold & Baldwin LLP cannot be responsible in any way for any material contained herein.