1. BUYING A BUSINESS OVERVIEW Markus May, Esq. May Law Firm, Ltd. 400 East Diehl Rd. Suite 130 Naperville, IL 60563 630-864-1004 mmay@illinois-business-lawyer.com www.illinois-business-lawyer.com

2. First, we must find the right business to buy!

3. Assemble experienced team of advisors Create portfolioGet finances in order Research types of businesses Hire broker/ Intermediary? Find potential businesses Contact potential lenders

4. Get Your Financial House in Order  Consolidate/pay off debt  Limit expenses  Consult a financial advisor

5. ASSEMBLE EXPERIENCED TEAM OF ADVISORS AttorneyLender Financial AdvisorAccountant

6. Create a Portfolio  Sell yourself!  To seller and lenders Financial information Resume – why you will succeed!  To private equity Resume – how you will help them succeed! Resume – how you will help them succeed!

7. Contact Potential Lenders  Determine how much business you can afford - budget purchase price and working capital  Determine potential sources for lending  Traditional  SBA  Other Sources: Angels, Mezzanine

8. Research Types of Businesses INDUSTRY? SERVICE OR PRODUCT? FRANCHISE? What is my skill set?

9. Hire a Buy Side Broker/Intermediary?  Focus on an industry  You may get faster results and reach sellers not willing to talk with buyers  Generally limited to one broker at a time  Negotiate broker agreement

10. Finding Potential Businesses  Network at MBBI meetings and seminars  Broker referrals  Websites: e.g. www.businessforsale.com www.businessforsale.com  Newspapers  Word of mouth  Cold calls  Etc....

11. WHEN YOU HAVE FOUND THE BUSINESS YOU WISH TO BUY...

12. Term Sheet or Letter of Intent Due diligenceFinalize financing Gather information from seller Review financialsStructure deal Closing Purchase Agreement Ancillary Agreements Post-Closing

13. Information from Seller  Gather financial and other information from Seller  Usually requires a confidentiality or non-disclosure agreement (NDA)  Negotiate NDA carefully so you don’t limit future options

14. Review Financials and Industry Information  Determine if this is a good business to proceed forward with from a financial perspective  Try to get as much information as possible about the business  Research the industry and business as much as possible without tipping off future competitors or violating the NDA

15. Structuring the Deal  Discuss how to structure the deal with an attorney and/or accountant Asset or Stock? What assets? How will price be structured? How will other aspects of the deal be handled?

16. Draft Basics of the Deal  Term Sheet or Letter of Intent  Sets forth the basic terms of the deal  Takes the company off the market  Provides time for in-depth review of company information  Deal often changes after further review  Long or short forms – psychology of the deal

17. Begin Due Diligence Financial Operational Legal

18. Finalize Financing  Get all necessary information to lender early  Respond promptly to lender requests  Get blank copies of documents to be signed in advance

19. Purchase Agreement  Negotiations continue on details  Draft the first version  Very important for liability and the bottom line

20. Ancillary Documents  Lease  Employment Agreement  Non-Competition Agreement  Security Agreement  Promissory Note  Bill of Sale and Assignment  Lien Searches  Company Resolutions  Closing Statements  Guaranty Agreement  Name Change  Etc.

21. Closing  Final transfer documents signed  Purchase price paid or dry closing

22. Post-Closing  Have a plan  Cast a vision  Have a checklist  Deal with Post-Closing issues related to purchase

23. Markus is a client focused and service oriented attorney with knowledge in a broad range of industries and experience in dealing with all levels of management and clients. He offers his clients conscientious and practical legal advice. His legal experience includes buying and selling companies, corporate law including business entity formations, drafting and negotiating contracts, and commercial litigation. Markus’ background in marketing and running a business unit are valuable in understanding business clients' situations. His analytical abilities help his clients analyze facts and focus on what is accurate and makes sense. He helps his clients move toward their goals in an efficient fashion while encouraging out of the box thinking. Markus enjoys instructing and counseling clients on the best way to solve their legal and business problems. Markus i a member of the Illinois State Bar Association, Chicago Bar Association and DuPage County Bar Association where he participates in numerous committees. He has Chaired the ISBA Business Law Section Council, CBA Mergers and Acquisitions Committee, CBA Business Law Committee He has written articles which have been published in the Illinois State Bar Journal and the DuPage County Bar Journal and is on the Publications Committee for the DuPage County Bar Association. He served six years on the Markus May, Esq. Board of Directors of the Midwest Business Brokers and Intermediaries organization. He has presented at numerous seminars on issues related to the purchase and sale of businesses. Markus is also involved with his church where he served as a deacon. Markus attended the University of Colorado School of Law where he was class president and on the University of Colorado Law Review as a Staff Editor. He was a member of the Dean's List and a recipient of the Dean's Scholarship. Markus received a Bachelor of Science in Marketing degree from the University of Colorado where he graduated Cum Laude and was a member of the Golden Key and Delta Gamma Sigma National Honor Societies. Markus was licensed to practice law in Illinois in 1999 after first being licensed in Colorado in 1991. Markus May May Law Firm Ltd. Naperville Financial Center 400 E. Diehl Rd., Suite 310 Naperville, IL 60563 630-864-1004 mmay@illinois-business-lawyer.com www. Illinois-buisness-lawyer.com