1. 1 2014 ACC-SoCal In-House Counsel Conference #IHCC14 What Should Your M&A Attorney be Telling You? January 22, 2014 Los Angeles, California Sponsored by Sheppard Mullin Moderator: Will Chuchawat Panelists: Tammy Brandt Matthew Neco #IHCC12

2. 090701_2 2 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  What Does “Market” Really Mean?  What’s My Exposure?  Let’s Make a Deal  What Non-Legal Issues Should Your Counsel Raise? Discussion Topics

3. 090701_3 3 #IHCC14 2014 ACC-SoCal In-House Counsel Conference What Should Your M&A Attorney be Telling You?

4. 090701_4 4 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Will Chuchawat – Partner, Sheppard Mullin – wchuchawat@smrh.com wchuchawat@smrh.com  Tammy Brandt – General Counsel, Service Mesh – tammy.brandt@servicemesh.com  Matt Neco – General Counsel, Docstoc, Inc. – matt.neco.sbinc@gmail.com Panelists

5. 090701_5 5 #IHCC14 2014 ACC-SoCal In-House Counsel Conference Sheppard Mullin at a Glance Fast Facts  AmLaw 100 firm founded in Los Angeles in 1927  625 attorneys practicing in 15 offices worldwide  Represent most of the Fortune 100  Firm’s attorneys ranked in Chambers USA, Legal 500, Best Lawyers in America, Which Lawyer PLC, Super Lawyers, etc. 5

6. 090701_6 6 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  The Studies – ABA – Houlihan – SRS What Does Market Really Mean?

7. 090701_7 7 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Be wary with those statistics and those that spout them What Does Market Really Mean?

8. 090701_8 8 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  A deal looks different if your company looks like this… What Does Market Really Mean?

9. 090701_9 9 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  versus this What Does Market Really Mean?

10. 090701_10 10 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  A $500 million deal is different than a $50 million deal What Does Market Really Mean?

11. 090701_11 11 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Private equity buyers and strategic buyers are two different animals What Does Market Really Mean?

12. 090701_12 12 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Asset deals vs stock deals vs mergers vs recaps vs minority deals vs healthy deals vs distressed deals vs technology deals vs A&D deals vs healthcare deals vs … What Does Market Really Mean?

13. 090701_13 13 #IHCC14 2014 ACC-SoCal In-House Counsel Conference What’s My Exposure?

14. 090701_14 14 #IHCC14 2014 ACC-SoCal In-House Counsel Conference What’s My Exposure?

15. 090701_15 15 #IHCC14 2014 ACC-SoCal In-House Counsel Conference What’s My Exposure?

16. 090701_16 16 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  How much exposure for the Seller? – Reps and warranties – Covenants – Retained liabilities – Caps – Baskets – Survival – Third party recovery – Net of taxes – Mitigation – Require maintenance of insurance – Release What’s My Exposure?

17. 090701_17 17 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  How much exposure (coverage) for the Buyer? – Due diligence – Your watch, our watch – Reps and warranties  Sandbagging – Covenants – Assumed liabilities – Consequential, loss of profit/revenue, multiplier damages – Legal opinion What’s My Exposure?

18. 090701_18 18 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Buyer coverage/exposure continued – Non-compete/Non-solicit/Non-disparagement – A/R – Inventory – Fraud – FCPA What’s My Exposure?

19. 090701_19 19 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Do I have to close?  arrangement of satisfactory financing  retention  compliance with bulk sales laws  receipt of favorable tax rulings  confirmation of outstanding equity securities  receipt of fairness opinions from investment bankers  title policies for significant real estate  an environmental audit  certain regulatory actions What’s My Exposure?

20. 090701_20 20 #IHCC14 2014 ACC-SoCal In-House Counsel Conference Let’s Make a Deal

21. 090701_21 21 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Flying Solo Let’s Make a Deal

22. 090701_22 22 #IHCC14 2014 ACC-SoCal In-House Counsel Conference Let’s Make a Deal

23. 090701_23 23 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  When (why) do I call my lawyer? Let’s Make a Deal

24. 090701_24 24 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  When (why) do I call my lawyer? – Planning – Deal team – Banker engagement letters – Exclusivity – Working Capital/Net Assets/Minimum Inventory/Cash – Escrow/Holdback – Promissory notes – Rollover – Earnout – 338(h)(10) – Purchase Price Allocation Let’s Make a Deal

25. 090701_25 25 #IHCC14 2014 ACC-SoCal In-House Counsel Conference Let’s Make a Deal

26. 090701_26 26 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  I’m not a banker, but you should talk to one. Let’s Make a Deal

27. 090701_27 27 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  I’m not an accountant, but you should talk to one. Let’s Make a Deal

28. 090701_28 28 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  What do I need to do to win the bid?  What do I need to do to close the deal? Let’s Make a Deal

29. 090701_29 29 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  What type of negotiator are you?  What type of negotiator is your lawyer? Let’s Make a Deal

30. 090701_30 30 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  What’s really a deal killer? Let’s Make a Deal

31. 090701_31 31 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Legal issues vs business issues What Non-Legal Issues Should My Counsel Raise With Me?

32. 090701_32 32 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  What happens if XYZ happens? – Loss of key customers – Loss of key suppliers – Loss of key employees (including the seller) – Litigation  What happens if XYZ does not happen? – Approval of the transaction – Approval needed for the business What Non-Legal Issues Should My Counsel Raise With Me?

33. 090701_33 33 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  Rep and warranty insurance  Insurance impact  Employment agreements/policies  Benefit plans What Non-Legal Issues Should My Counsel Raise With Me?

34. 090701_34 34 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  IT  How does this effect your loan covenants?  SEC reporting requirements?  Third party shareholder representative  Escrow provider What Non-Legal Issues Should My Counsel Raise With Me?

35. 090701_35 35 #IHCC14 2014 ACC-SoCal In-House Counsel Conference  What’s market depends on the circumstances  It’s not rocket science, it’s a full contact sport  You don’t play contact sports alone  Call your lawyer early on Take-Away Points

36. 000000_36 11 th Annual In-House Counsel Conference January 29, 2014 (Los Angeles, CA) #IHCC14 36 www.acc.com/chapters/socal/