1. Richard Phillips presenting at The IOD on 11 October 2012 © Copyright Matthew Arnold & Baldwin LLP, 2012. All rights reserved.

2. Buying & Selling Private Companies 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, 2012. All rights reserved. be relied on in any situation.

3. Overview 1.Preparation 2.Finalising the deal 3.What the process involves 4.What each party requires and why 5.Spanners in the works

4. Preparation Start now Ducks in a row… Worthwhile to the Seller Smoother deal for the Buyer Funding – banks/private equity/capital markets What type of deal – selling/buying shares or selling/buying assets? The difference Liability Contracts Employees What will your lawyer need to do differently?

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

6. What the Process involves 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

7. What each party requires and why Buyer – protections Warranties Indemnities Retention Completion accounts Restrictive covenants Deferred consideration – and earn out? Seller – security and defence As much risk free money as possible? Greater potential sum but more risk? Security for deferred consideration Disclosures and limitations on warranties

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

9. Spanners in the works (2) Buyer is from another jurisdiction Third party difficulties Landlord Financiers Change of control Your Advisors From left field…

10. Summary Take advice early Understand your own limits on risk and plan tactics accordingly Understand the other party Be pragmatic Time commitments Anticipate problems

11. 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 21 Station Road, Watford WD17 1HT E: info@mablaw.com W: www.mablaw.com

12. These slides have been produced only for the purposes of illustrating a talk given by Richard Phillips on 11 October 2012. 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.