Nuts and Bolts of an M&A Transaction Corporate Law ReedSmith Nuts and Bolts of an M&A Transaction Presented by Ken Siegel and Nikki Bechtold August 23, 2018

Agenda Life Cycle of a Deal Structure of Acquisitions Commonly Negotiated Provisions in a Purchase Agreement Current M&A Market Recent Developments Q&A

Life Cycle of a Deal (One Step) Due Diligence Draft & Negotiate Deal Documents Sign the Deal Sign and Close the Deal Work to Satisfy Closing Conditions Post-Closing Obligations Claims, etc. Celebrate!

Life Cycle of a Deal (Two Step) Due Diligence Draft & Negotiate Deal Documents Sign the Deal Close the Deal Work to Satisfy Closing Conditions Post-Closing Obligations Claims, etc. Celebrate!

Structure of Acquisitions Types of Acquisitions: Asset Purchase Acquisition Stock Purchase Acquisition Combination of Stock and Asset Purchase Acquisition Merger

Commonly Negotiated Provisions in a Purchase Agreement Economic Provisions Representations & Warranties Indemnification Covenants Two Step Specific Provisions

Assumptions Private Strategic Acquisition Debt Free and Cash Fee No Representation and Warranties Insurance No Rollover by Sellers No Tax Related Issues No Financing

Economic Provisions Purchase Price Defined Terms: Assets and Liabilities Working Capital & Working Capital Adjustment Escrow Earn-Out

Representations & Warranties Buyer: “We are who we say we are” Seller: “You are getting what you think you are paying for” Controversial Reps & Warranties Risk Allocation Protection Diligence

Indemnification Defined Term: Loss Caps, baskets Survival Effect of Knowledge Materiality Scrapes Damages

Covenants Restrictive Covenants Types Non-solicitation Non-competition Non-disparagement Key Considerations Duration Geographical Scope Defined Term: Business Employee Matters Termination of Employees Compensation and Benefit Plans

Two Step Specific Provisions Interim Covenants Operation of the Business Schedule Updates Termination Early Termination Drop Dead Date Deal Specific Termination Rights Effect of Termination Fees (reverse termination fees, break-up fees) Closing Conditions Regulatory Approvals Required Consents Deal Specific Conditions

Current M&A Market Competitive Market Buyers have cash Buyers looking to middle market for value Convergence of technology with retail and other industries General State of the M&A Market

Recent Developments Recent political climate change Tax policy Antitrust Tariffs and Trade Recent Example of Direct Impact on M&A Practice – CFIUS What is CFIUS? What did CFIUS do? What changed? Expansion of Authority Cyber-security & Personal Data Enhanced focus on China

Questions?