Structuring and Planning the M&A Transaction (Series: Private Company M&A Boot Camp)

2. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe Practical and entertaining education for attorneys, accountants, business owners and executives, and investors. 2

3. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe DISCLAIMER The material in this webinar is for informational purposes only. It should not be considered legal, financial or other professional advice. You should consult with an attorney or other appropriate professional to determine what may be best for your individual needs. While Financial Poise™ takes reasonable steps to ensure the information it publishes is accurate, Financial Poise™ makes no guaranty in this regard. About this PowerPoint: if you are looking at this PowerPoint without the benefit of listening to the conversation that surrounded it then you are doing yourself a disservice. This PowerPoint was prepared in contemplation of being viewed in conjunction with listening to a one hour webinar on mergers and acquisitions involving privately-owned businesses. 3

4. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe MEET THE FACULTY Moderator: Robert Londin – Jaspan Schlesinger LLP Panelists: Jacqueline Brooks – Saul Ewing Arnstein & Lehr David Sikes – Jones Day Garth Tebay – Value Defined LLC 4

5. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe ABOUT THIS WEBINAR: Structuring and Planning the M&A Transaction There is an old carpenters’ expression, “measure twice, cut once.” M&A work is just one of many areas in business and law where this expression resonates. Buyers and sellers, like chess players anticipating many moves in advance, should envision and plan the route to get a deal done, including anticipated detours, at the onset of the transaction. This webinar discusses the similarities and differences between basic M&A transaction structures; purchase price payment concerns; the most common issues that arise in the early stages of M&A transactions of all kinds; the relationship between ostensibly unrelated sections of an M&A agreement; and transaction timeline. One focus of this episode is a threshold question in many deals: whether the buyer will buy equity or assets. This episode will, in summary form, cover many of the issues discussed in greater depth in subsequent episodes. • 5

6. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe ABOUT THIS SERIES: Private Company M&A Boot CampCorporate transactions (or “deals”) include many types of transactions. Viewed broadly, a deal can be a very small matter such as drafting a purchase order, a non-compete agreement, or myriad other single purpose agreements necessary to document a legal relationship between two parties and extend to large multi-national acquisitions and financings. One of the most significant types of transactions a company can enter into, however, and the type that is commonly thought of as needing a “deal” lawyer, is a Mergers and Acquisitions transaction. M&A (mergers and acquisitions), viewed broadly, includes buying or selling all or part of a business, as well as other business combinations, such as mergers. Such “deal” work commonly requires attorneys, accountants, and intermediaries (i.e. investment bankers and business brokers) to work together. This webinar series features leading M&A attorneys and other deal professionals speaking about private company M&A in roughly chronological order, guiding the audience through a conversation that spans from deal origination, the LOI (letter-of-intent) or term sheet, due diligence, document drafting and negotiation, closing, and post-closing. Issues addressed include tax planning; corporate governance; closing conditions; representations and warranties; indemnification provisions; earn-outs; restrictive covenants; antitrust; intellectual property; and employment. While many of the topics covered apply also to public company M&A, the focus of this webinar series is on M&A involving a privately owned company. 6

7. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EPISODES IN THIS SERIES 8/6/19 Episode #1: Structuring and Planning the M&A Transaction 9/10/19 Episode #2: Key Provisions in M&A Agreements 10/15/19 Episode #3: The M&A Process 11/12/19 Episode #4: Post-Closing Issues 12/10/19 Episode #5: Negotiating an M&A Deal 7 Dates shown are premiere dates. All webinars will be available On Demand approximately 4 weeks after they premiere.

9. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe OUTLINE • Transaction Structures • Tax Planning • Acquired Business’s Liabilities • Purchase Price Components • Due Diligence • Representations and Warranties • Timeline; Early Concerns and Topics • Post-Closing Concerns (Purchase Price Adjustment and Indemnification) 9

10. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe DRIVERS OF STRUCTURE • Nature of target – is target private or public? • Who is acquirer – is acquirer strategic or financial? • Nature of consideration– is buyer paying with cash, notes, stock, or a combination? • Timing of consideration; adjustments – is all consideration to be paid at closing, or will there be any deferred payments or adjustments for working capital, earnouts, etc.? • Type of transaction – is acquirer purchasing assets or stock of target, or will transaction take the form of a merger? 1 0

11. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe DRIVERS OF STRUCTURE: Nature of Target • Private Target ✓ Negotiation will focus on reps and warranties, indemnity, and purchase price adjustments ✓ Less focus on fiduciary out; shareholder approval is commonly obtained shortly after signing • Public Target ✓ Negotiation focus on conditions to closing ✓ No indemnity or purchase price adjustments ✓ Reps and warranties act as closing conditions ✓ Heavily “market” driven ✓ Fiduciary out 1 1

12. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe DRIVERS OF STRUCTURE: Nature and Timing of Consideration • Cash ✓ Defined value ✓ Certain liquidity ✓ Key issue often timing • Notes ✓ Defined value ✓ Limited liquidity ✓ Credit risk • Acquirer Stock ✓ Uncertain value ✓ Uncertain liquidity ✓ Potential tax advantages ✓ Registration rights 1 2

13. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAX OVERVIEW • Taxable Asset Purchases • Tax Issues in Stock Purchases ✓ Taxable Stock Purchases ✓ Private Company ✓ Section 338(h)(10) Considerations ✓ Subsidiary of a Consolidated Group ✓ S Corporation • Tax Free Reorganizations 1 3

14. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe OVERVIEW OF POTENTIAL TAX LIABILITIES • Basic “buckets” of tax liabilities that can impact economics: ✓ Historic Tax Liabilities ✓ Transaction Tax Liabilities ✓ Future Tax Liabilities ✓ Carryover basis ✓ Built in gain 1 4

15. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe HISTORIC TAX LIABILITIES • Pre-closing tax liabilities relating to pre-closing periods are virtually certain to exist. This issue is less acute for development-stage companies with no historical profit • Pre-closing tax liabilities may not be known until being assessed following an audit. • Definitive Agreement should include tax covenants regarding pre-closing periods and “straddle” periods 1 5

16. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TRANSACTION TAX LIABILITIES • Transaction itself may trigger additional taxes: ✓ Golden parachute payments (Section 280G) ✓ Making a Section 338(h)(10) election ✓ Transaction that is “pursuant to a plan” (e.g. Section 355(e)) ✓ Deferred intercompany gains triggered by the sale of a subsidiary out of a consolidated group or an “s” corporation or LLC with “built in gain” or “hot assets” • After-Tax analysis – each party will analyze cost of transaction after considering all applicable taxes. Taxes attributable to the transaction may represent either an increase or decrease in purchase price (and/or a sharing of such “delta”) 1 6

17. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE ASSET PURCHASE AGREEMENTS Tax Representations and Warranties • Generally fewer and more limited than in a stock purchase agreement • Seller typically retains liability for Target’s pre-closing taxes, including: ✓ Target income taxes ✓ Sales, ad valorem, or other pre-closing taxes ✓ All or a portion of taxes allocable to the sale and transfer of the assets • Seller Reps typically include: ✓ Sales and employment withholding taxes have been paid ✓ All other taxes relating to the acquired business have been paid ✓ There are no audits, assessments or deficiencies relating to the transferred business • Seller may take position that it should represent only that the purchased assets are not subject to any tax liens which is typically and successfully rebutted by the purchaser 1 7

18. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS • Preparation and filing of tax returns • Payment of taxes • Tax elections and other actions • Cooperation in taking return positions, audits, and tax disputes • Filing and payment of transfer taxes • Termination of tax sharing agreements 1 8

19. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS – PRIVATE TARGET Overview of Tax Indemnities • Typically, acquisition agreements contain stand-alone tax indemnification provisions whereby Seller agrees to indemnify Buyer for - ✓ Pre-closing and relevant Straddle Period taxes of Target ✓ Taxes of the selling consolidated or combined group (as discussed in Section 4) ✓ Certain other relevant taxes, as well as costs and expenses 1 9

20. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS – PRIVATE TARGET (CON’T) • In most cases, Seller is also required to indemnify Buyer for damages due to breach of tax representations and warranties ✓ In some cases, Seller will only indemnify for breaches resulting in pre-closing tax liabilities (vs. increases in post-closing taxes due to misrepresentations as to tax attributes) • Interaction of tax indemnifications on general indemnifications should be considered ✓ Tax provisions override general provisions ✓ General basket and cap limitations typically do not apply • Seller generally will not indemnify Buyer for increases in target’s tax liabilities resulting from acts taken by Buyer on or after the closing. 2 0

21. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS Additional Tax Indemnification Negotiation Issues: • Seller may not be required to indemnify buyer for pre-closing taxes if tax liability was disclosed on (or reserved for on) a closing balance sheet that resulted in purchase price adjustment or was taken into account in pricing the deal • Indemnifications usually characterized as purchase price adjustments to make clear that any payment by Seller should not result in income to Target or Buyer 2 1

22. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS (CON’T) Tax Audits and Contests • If Seller has agreed to indemnify buyer for pre-closing taxes, Seller generally will retain control of tax contests relating to pre-closing tax periods; but purchasers may limit such control right to the extent future tax positions are adversely affected 2 2

23. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe CODE SECTION 338(h)(10) CONSIDERATIONS Built-in Asset Gain and 338(h)(10) Election • Where Target has built-in gain in its assets: ✓ Buyer will want to purchase assets to step up their basis to fair market value ✓ Seller may prefer to sell stock if it would recognize less gain on a stock sale • A 338(h)(10) election, which allows Buyer to receive a basis step up in a taxable stock sale, is available where Target is either: ✓ An S corporation ✓ An 80% subsidiary of another corporation 2 3

24. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe CODE SECTION 338(h)(10) CONSIDERATIONS (CON’T) • Both the Seller and the Buyer must agree to make the 338(h)(10) election • The election recharacterizes transaction as deemed purchase by “New” Target from “old” Target of “old” Target assets ✓ The deemed asset purchase is followed by a tax-free liquidation of “old” target into Seller ✓ A single level of tax on the asset sale replaces the single layer of tax that would have been paid on the stock sale • The 338(h)(10) election can result in incremental income or franchise taxes for Seller 2 4

25. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe CODE SECTION 338(h)(10) CONSIDERATIONS (CON’T) Effect of 338(h)(10) election on NOLs, Capital Losses, Credits and Depreciation: • If 338(h)(10) election made: ✓ Target’s historic NOLs, capital losses and credits will disappear ✓ Buyer generally will have greater depreciation and amortization deductions • Buyer must compare detriment of losing Target’s NOLs, Capital losses and credits (keeping in mind that they may have been limited under Section 382 and 383) with the benefit of the increased depreciation and amortization deductions 2 5

26. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe CODE SECTION 338(h)(10) CONSIDERATIONS (CON’T) Documenting a 338(h)(10) Election: • Buyer should include in letter of intent that Seller, at Buyer’s request, will participate in a 338(h)(10) election ✓ If Buyer waits until the negotiation of definitive agreements to raise the issue (after the price has been agreed), Seller may seek to be reimbursed for the entire amount of the incremental cost it bears on account of making the election • Even though the sale of stock is treated as an asset sale, Buyer needs to get same basic representations and warranties that it would get in a private stock acquisition 2 6

27. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS– TARGET IS A SUBSIDIARY IN A CONSOLIDATED GROUP Tax Returns and Indemnity • Seller generally entitled to: ✓ File initial consolidated returns due following closing which reflect Target’s operations prior to closing ✓ File amended consolidated returns for the year in which the transaction closed ✓ Control any audits of these returns, including ability to extend the statute of limitations and to settle or litigate claims 2 7

28. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAXABLE STOCK ACQUISITION AGREEMENTS– TARGET IS A SUBSIDIARY IN A CONSOLIDATED GROUP (CON’T) • Seller will resist attempts to impose restrictions on filing and defending these returns because they generally include the operations of Seller and all of its subsidiaries • Because Target remains liable for pre-closing taxes of Seller and the consolidated group, Seller generally gives Buyer a full indemnity for pre-closing taxes ✓ This indemnity is given even where there is no indemnity protection for non-tax items ✓ One common carve-out is for pre-closing taxes accrued on a closing balance sheet, if balance sheet serves as basis for purchase price adjustment or accrual is otherwise taken into account in pricing deal. 2 8

29. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAX-FREE ACQUISITION AGREEMENTS Tax Representations and Warranties • Agreements relating to the acquisition of a company in a tax-free transaction reflect the Seller’s continuing relationship with the Target and the Buyer • Because Seller receives Buyer stock in a tax-free acquisition, Buyer may make some or all of the same tax representations that Seller makes • Tax representations in a tax-free deal generally mirror those found in a taxable stock purchase ✓ In a “C” reorganization, Seller may try to give limited warranties similar to those in an asset acquisition, but Buyer may insist on full stock purchase representations because of concerns about the state law treatment of the transaction. • Buyer and Seller generally agree to make reasonable efforts to have the transaction qualify as tax- free • Buyer and Seller tax counsel generally are required to render a clean opinion as to the tax-free status of the transaction 2 9

30. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAX-FREE ACQUISITION AGREEMENTS (CON’T) Tax Covenants • Seller ✓ Seller will seek a representation/covenant that buyer will take no action – either pre or post-closing – that would jeopardize the qualification of the transaction as tax free • Buyer ✓ Buyer may resist post-closing covenant on grounds it could restrict legitimate business decisions beneficial to all shareholders o If post-closing covenant agreed to, Buyer will generally limit to a specific list of restrictions on its actions o Target shareholders may seek a “best” efforts standard o More common to agree on “reasonable” efforts 3 0

31. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAX-FREE ACQUISITION AGREEMENTS (CON’T) Tax Opinions • Buyer and Seller tax counsel generally are required to render a clean opinion as to the tax-free status of the transaction ✓ In case of a “B” or “(a)(2)(E)” reorganization, Buyer’s counsel may not be asked to provide – and buyer may not be permitted to condition its closing upon – an opinion ✓ Agreement may provide that if counsel for either Buyer or Seller refuses to issue their opinion, opposing counsel can issue its opinion to both parties to satisfy the closing condition. • In rendering their opinions, tax counsel generally require Buyer and Seller each to make a series of representations based on representations that the IRS used to require when it was issuing letter rulings in this area ✓ These representations generally are not included in the acquisition agreement, but rather in certificates or letters issued to the two tax counsel 3 1

32. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe TAX-FREE ACQUISITION AGREEMENTS (CON’T) Indemnity • Buyer generally refuses to indemnify Target shareholders if a putative tax-free stock exchange is found to be taxable ✓ Tax-free treatment on the transaction defers the Target shareholders tax liability, it does not eliminate it ✓ Indemnification would generally unjustly enrich the Target shareholders 3 2

33. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REQUIREMENTS BY TRANSACTION • Stock Purchase Agreements ✓ All shareholders of target company must sell their shares ✓ Potential to purchase 100% outstanding shares and squeeze-out remaining shareholders through merger ✓ Remaining shareholders have dissenters/appraisal rights; or remain as a minority shareholder subject to buyer/company call right • Merger Agreements ✓ Does not require approval of 100% of target company shareholders ✓ Non-consenting shareholders may assert dissenters/appraisal rights 3 3

34. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REQUIREMENTS BY TRANSACTION (CON’T) • Asset Purchase Agreements ✓ Shareholders of target company must approve sale ✓ No appraisal/dissenters rights in Delaware (but yes in Illinois) • Appraisal/Dissenters Rights ✓ Allow non-consenting shareholders to seek “fair value” for shares ✓ Court decides what “fair value” is 3 4

35. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: PURPOSE • Indemnity ✓ Seller makes a series of reps to Buyer about Seller and its business ✓ Seller provides indemnity if reps are breached • Closing Condition ✓ Reps true at signing and at closing ✓ Buyer can walk if reps not true at closing ✓ Closing standard may require reps be true “in all material respects” (strong) or “in all respects”, except where such breach would not constitute a “Material Adverse Effect” (weak) 3 5

36. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: PURPOSE (CON’T) • Diligence ✓ Reps tend to “focus a seller’s mind” and support due diligence investigation ✓ Schedules list exceptions to the reps and help focus diligence ✓ Schedules may force affirmative disclosures – e.g., contracts, independent contractors, insurance claims history, etc. • Risk Allocation ✓ Buyer will ask Seller to rep to matters it is not certain of ✓ Purpose is to allocate risk regarding matters to Seller o Frequently a matter of negotiations between Buyer and Seller 3 6

37. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: The “Knowledge” Qualifier • A “knowledge” qualifier is intended to shift the risk of the unknown from the Seller to the Buyer Example: “To the Seller’s knowledge, none of the Seller’s products that are or have been designed, created, developed, assembled, manufactured or sold by Seller is infringing, misappropriating or making any unlawful use of any intellectual property owned by any other person.” • Be very careful to understand from the parties who bears the risk if an “unknown” becomes “known” during the pre-closing period. ✓ If it is intended that the Buyer continues to bear the risk, then be sure to add a temporal element to the representation. Example: “To the Seller’s knowledge as of the date hereof, ...” 3 7

38. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: The “Knowledge” Qualifier (CON’T) • Whose knowledge? ✓ Every person in the company? ✓ C-level executives? ✓ Who knows about the deal? • What level of knowledge? ✓ Actual knowledge? ✓ Actual knowledge, after due inquiry? ✓ Knowledge a person would reasonably be expected to have by virtue of such person’s title, or position with, or duties performed for, the Company? 3 8

39. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: The “Materiality” Qualifier • A “materiality” qualifier is intended to shift the risk of the immaterial from the Seller to the Buyer • Significant difference between “material” or “in all material respects” standard and “Material Adverse Effect” standard • Double materiality is something Buyer should avoid or limit • Addressed in “buckets”/”thresholds” in indemnification provisions 3 9

40. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: Financial Statements Rep • Often considered the single most important rep in an agreement • Carries with it a whole host of background rules and requirements related to preparation and audit • Seller should be comfortable representing to financial statements • Consider unique situations, unaudited companies, place in audit cycle 4 0

41. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: Undisclosed Liabilities Rep • Broad rep intended to be read broadly • Consider whether date is from latest audit or latest interim financials • Buyer should review Schedule of Liabilities very carefully (avoid “narrative” explanations of potential liabilities and make sure there are dollar amounts identified for each liability) 4 1

42. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: Undisclosed Liabilities Rep (CON’T) • Buyer’s Perspective ✓ Allowance for doubtful accounts is an estimate (prepared by Seller) based on Seller’s historical collection rates and thus should cover any amounts not collected ✓ Assures Buyer collection of a minimum dollar amount (especially important if Buyer has priced deal on A/R amount) • Seller’s Perspective ✓ Seller should not guarantee the collection efforts of Buyer; or guarantee accounts receivable (perhaps to the extent beyond a reserve set forth in financial statements (see below)) ✓ All accounts receivable of the Seller (i) represent valid obligations of customers of Seller arising from bona fide transactions entered into in the ordinary course of business, (ii) are current, [and (iii) are fully collectible, subject to any allowance for doubtful accounts.]” 4 2

43. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: 10b-5 / Anti- sandbagging rep • 10b-5 ✓ States that reps do not contain any material misstatements or omissions. ✓ In a stock deal, Rule 10b-5 may be present by operation of law o Rep creates a contractual claim with indemnity obligations ✓ Seller will try to avoid giving a 10b-5 rep because it “swallows” the other negotiated reps • Anti-sandbagging ✓ States that buyer does not know of any untrue reps ✓ Seller seeking to avoid “close and sue” ✓ Buyer will try to avoid giving an anti-sandbagging rep to avoid disputes about “ what did the buyer know” prior to Closing 4 3

44. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe REPS AND WARRANTIES: Schedules • Two Purposes ✓ Carve out from reps and indemnity ✓ Disclosure • Cross Reference Provision ✓ Disclosure for one rep satisfies another (typical formulation: to the extent inference is reasonable)? 4 4

46. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe COVENANTS: Pre-Closing Operation of the Seller’s Business “During the pre-closing period, Seller shall conduct its business in the ordinary course consistent with past practice and shall not take the following actions...” Seller’s Perspective: • Seller needs to ensure that it can operate the business in a manner that will not leave it unduly damaged in the event the deal does not close Buyer’s Perspective: • Buyer will want certainty that Seller’s financial and business condition is substantially the same at closing as at signing 4 6

47. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe COVENANTS: Pre-Closing Anti-Trust Regulatory Approvals “The parties agree to take all actions necessary to obtain all applicable U.S. and approvals in connection with the Merger.” Buyer’s Perspective: • Buyer may not be able to find purchaser/acceptable price for business unit if divestiture is required Seller’s Perspective: • Immaterial divestitures required by regulators should not give Buyer a “walk” right 4 7

48. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe COVENANTS: Pre-Closing Access “The Company will make its facilities and personnel reasonably available to the Buyer during normal business hours.” Buyer’s Perspective: • Buyer wants to start integration planning Seller’s Perspective: • Seller needs to keep running the Company well to make sure conditions are met • Seller does not want Buyer to engage in fishing expeditions prior to closing • Seller does not want Buyer indirectly operating business - through contact with its employees, soon to be Buyer’s employees – until business is actually sold 4 8

49. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe COVENANTS: Post-Closing • Tax cooperation • Asset transfer cooperation • Publicity • Non-compete; No-Solicit; Confidentiality • Employee matters • Other 4 9

50. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe INDEMNITY: Key Issues• Indemnification for what? ✓ Breaches of reps and warranties ✓ Breaches of covenants ✓ Specific indemnity items (e.g., litigation which has been disclosed by Seller) • Limitations ✓ Joint or several ✓ Survival or representations and warranties ✓ Caps (i.e., maximum amount of recovery) ✓ Baskets/Thresholds ✓ Escrow as source of recovery ✓ “Indemnifiable Loss” definition ✓ Tax Effect ✓ Insurance Coverage/Pursuit of Claim ✓ Limited Recourse 5 0

51. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe INDEMNITY: Survival • Survival Periods typically range from 6 months to 36 months, tend to be 12 months to 18 months (or tied to completion of next audit cycle) • Parties should focus on “business realities” when negotiating length of survival period (i.e., how long will it take before Buyer has a sense whether representation has been breached?) • Certain representations and warranties may survive until the applicable statute of limitations (e.g., tax, ERISA, environmental) • Other “basic” representations typically survive forever (e.g., ownership of the shares, capitalization of Target (in stock deal), authorization of transaction) 5 1

52. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe INDEMNITY IN GENERAL • Seller will typically try to cap Buyer’s recovery for indemnity claims to a portion of the purchase price (e.g., the amount of the escrow, fixed dollar amount, % of purchase price, etc.) • Baskets/Thresholds ✓ Intended to discourage immaterial claims ✓ Amount typically reflects an agreed upon dollar amount, which is typically based on a percentage of the purchase price ✓ A proxy for materiality? ✓ “Indemnity Scrape” • Sole remedy provision ✓ Fraud, willful breach carveout ✓ Generally used when Buyer believes Seller may not be able or willing to meet potential indemnification obligations or Buyer is unwilling to go through the process of collecting from seller 5 2

53. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe OUTLINE • Earn-Out Provisions • Antitrust Issues • Intellectual Property Issues • Employment Issues • Financing the Transaction 5 3

54. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EARNOUTS • A pricing mechanism with a portion of the final purchase price contingent upon actual post-sale Target performance • Key characteristics: ✓ Identified achievement criteria ✓ More common in sale of privately-held companies ✓ More frequent in deals with transaction value below $250 million • Used when: ✓ Buyer cannot effectively value business or Seller and Buyer cannot agree on valuation, so Buyer ties purchase price to future performance ✓ Buyer has insufficient cash for payment of full purchase price at closing 5 4

55. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe RATIONALE FOR EARNOUTS • Used by Buyers and Sellers to bridge valuation gaps ✓ Rewards Seller if projections are accurate ✓ Limits overpayments by Buyer for business that fails to achieve projections • May be particularly useful in the following situations: ✓ Volatile industries ✓ Unproven product, technology or contract pipeline ✓ General economic uncertainty ✓ Undercapitalized Buyer 5 5

56. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EARNINGS CRITERIA • Should be easily measured and confirmed • Typical performance criteria include: net revenues, net income, EBIT, EBITDA, earnings per share, or net equity thresholds • Non-financial benchmarks for early stage companies • CONCERNS ✓ Does Buyer have a duty to Seller? ✓ Reporting obligation and dispute mechanism 5 6

57. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe WHAT IS THE PURPOSE OF ANTITRUST LAWS? 1. Antitrust and Competition laws have been adopted in more than 100 countries 2. The basic premise of the US antitrust laws: The unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress... Northern Pacific Railway Co. v. United States, 356 U.S. 1, 4 (1958) 5 7

58. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe WHAT IS THE PURPOSE OF ANTITRUST LAWS? (CON’T) 3. The US antitrust laws are meant to protect competition for the benefit of consumers (but not to protect competitors). They prohibit: • Agreements to restrain trade (e.g. price-fixing, group boycotts) • Misuse of market power (monopolization) • Price discrimination (under certain circumstances) • Mergers or acquisitions that substantially reduce competition 5 8

59. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe WHO ENFORCED THE ANTITRUST LAWS? • US Agencies: Federal Trade Commission & US Department of Justice, Antitrust Division • States’ Attorneys General • Foreign competition law agencies (more than 100) • Private lawsuits (including class actions) 5 9

60. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe MERGER REVIEW- SECTION 7 OF THE CLAYTON ANTITRUST ACT OF 1914 1. All mergers, acquisitions, and joint ventures are subject to government review, at both Federal and State level • Only one federal agency reviews any transaction; multiple States may review • Even if not subject to prior notification, US agencies can challenge • Private parties can object and can file suit to challenge • Challenges can be brought either before or after closing 6 0

61. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe MERGER REVIEW- SECTION 7 OF THE CLAYTON ANTITRUST ACT OF 1914 (CON’T) 2. Antitrust laws prohibit acquisitions and combinations the effect of which may be “substantially to lessen competition” in any line of commerce in any section of the country. 3. Hart Scott Rodino Act Filings (HSR Filings) • Section 7A of the Clayton Act requires parties to file a notification and pay a filing fee with the FTC and the DOJ prior to closing a merger or acquisition that meets the HSR size of transaction and size of person thresholds, which are adjusted annually. For 2012, the “size of transaction” threshold is $68.2 million (value of voting securities or assets to be purchased by buyer) and the “size of person” threshold is $136.4 million in gross annual sales (at least one party to the transaction) 6 1

62. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe BUYER’S CONSIDERATIONS • How important is IP to the transaction? • Conduct an internal IP audit to identify needed intellectual property assets and rights • Tie to disclosure schedule • Evaluate transaction structures • Prepare confidentiality agreement and purchase agreement (for negotiated transaction) • Chain of title clearance and issues addressed • Maintenance/Validity of all IP to be transferred • Identify all agreements with IP ownership or transfer obligations and rights (including workforce “work-for-hire” agreements) • Varied level of diligence based on nature of transaction 6 2

63. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe PURCHASE AGREEMENT Seller’s Concerns • Limiting post-closing liabilities • Retaining intellectual property needed to conduct other businesses Buyer’s Concerns • Obtaining everything necessary to conduct the business • Limiting assumed liabilities (infringement claims) and protection of purchased IP post-closing 6 3

64. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe POTENTIAL LIABILITY FOR A BUYER MAY ARISE FROM SELLER’S: • Defined benefit plans • Multi-employer pension plans • Retiree medical or life insurance plans • Severence plans • Executive and equity compensation plans/agreements • International employee benefit plans (other than statutory benefits) 6 4

65. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe NATURE OF TRANSACTION GENERALLY CONTROLS: STOCK PURCHASE • Buyer assumes plans/agreements of target by operation of law. ✓ Assets of liabilities go to Buyer ✓ Assess potential liabilities (may impact price) • Consider effect of the acquisition on employee benefit plans, employment agreements, equity arrangements, etc. at target ✓ Identify benefits triggered by change in control (single or double trigger) • Consider whether pre-acquisition plan termination is appropriate • Important to know if there are limitations on what Buyer can do with target plans post- closing of if there are significant costs that arise from post-closing terminations. 6 5

66. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe NATURE OF TRANSACTION GENERALLY CONTROLS: ASSET PURCHASE • Buyer purchases only those assets and assumes only those liabilities specified under the purchase agreement. • Unless Buyer assumes an obligation relating to a benefit plan, the acquisition will not automatically result in assumption of liabilities. ✓ COBRA (health care continuation) coverage may be required in certain instances ✓ Potential defined benefit plan/controlled group liability even if pension plan not assumed. ✓ Buyer should still assess potential liabilities, because it may get sued (even if the claim is not successful) • If Buyer assumes plan/agreements, treat assumption same as stock purchase. 6 6

67. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe CONTROLLED GROUPS • Target company will have joint and several liability with respect to certain ERISA liabilities with other members of Target’s “controlled group”. • In general, affiliates that have 80% or more overlapping ownership are part of a controlled group. ✓ As a result, liabilities assumed by buyer may be broader than those at target company level. ✓ Title IV (pension plan). ✓ COBRA obligations. 6 7

68. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe DEFINED BENEFIT PENSION LIABILITIES– NON-UNION • Defined benefit plans are subject to Pension Benefit Guaranty Corporation (PBGC) insurance. PBGC rules are comprehensive and complex • Obligation of plan to pay promised benefit must be actuarially funded by the employer over time • Complex minimum funding requirements • Plan Terminations ✓ In general, a tax-qualified defined benefit plan cannot be terminated unless fully funded ✓ Exceptions to general rule may arise when all members of controlled group are bankrupt ✓ Under certain circumstances, plans may be terminated involuntarily by PBGC ✓ Liability for any underfunding in defined benefit plan upon termination will be joint and several among all members of controlled group 6 8

69. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe MULTI-EMPLOYER PLANS FOR UNION EMPLOYEES • Subject to withdrawal liability rules, in addition to rules governing required contributions • Withdrawal occurs when an employer ceases to participate in a multiemployer plan or experiences certain levels of reduced plan participation • Estimating potential withdrawal liability can be difficult • Asset deals may trigger withdrawal liability unless parties agree that Buyer will assume liabilities of the seller and certain other requirements are satisfied 6 9

70. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe WELFARE PLANS – SEVERANCE AND RETIREE MEDICAL/LIFE • Generally subject to less extensive regulation than pension plans • Severance liability issues ✓ Review severance plan to determine the circumstances under which severance may be paid and the amount of/formula for determining severance ✓ Consider potential costs of future terminations ✓ Consider whether severance may be triggered merely by virtue of the occurrence of the transaction (particularly an asset transaction), and whether steps should be taken to address such a possibility • Retiree Medical/Life Issues ✓ Group of employees covered ✓ Estimate of liability ✓ Ability to terminate 7 0

71. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EXECUTIVE COMPENSATION – IN GENERAL • Generally, governed by contract. ✓ Starting point is determining what the relevant agreement/plan provides for and whether there is any discretion to interpret provisions • Employment and Other Agreements ✓ Employment contracts/offer letters ✓ Individuals or other SERPs ✓ Stay/transaction/other bonus agreements 7 1

72. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EXECUTIVE COMPENSATION – IN GENERAL (CONT’D) • Stock and other equity-based compensation. • Types of equity-based compensation: ✓ Stock rights, including stock options and stock appreciation rights ✓ Restricted stock ✓ Restricted stock units ✓ Other equity and equity-based plans • Conversion/cash-out issues • Tax issues • Change in Control Arrangements/280G 7 2

73. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EXECUTIVE COMPENSATION – EQUITY 7 3 Existing Award Treatment in Transaction Target stock options Typically, cashed out- • Holder gets cash which is taxed at ordinary rates Less commonly, options are rolled over, in which case- • Tax event is deferred until ultimate exercise and then taxed at ordinary rates

74. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EXECUTIVE COMPENSATION – EQUITY (CON’T) 7 4 Existing Award Treatment in Transaction Restricted shares and restricted stock units Typically, vest by their terms at closing and are cashed out as part of transaction- proceeds taxed as ordinary rates Restricted stock awards may vest at closing and shares rolled over, but vesting will still result in ordinary taxable income Target shares Often cashed out as part of transaction- • Proceeds taxed as capital gains But can be rolled over on a tax free basis (deferring gains tax until future liquidity event)

75. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe EXECUTIVE COMPENSATION EQUITY – STOCK OPTIONS Plan/individual agreements will determine whether any or all of the following alternatives for treatment of options are available in a given transaction: • Cancellations : ✓ Out-of-the-money options ✓ Other unexercised options • Cash Outs ✓ Spread only ✓ Payment of transaction consideration 7 5

76. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe SELLER OFTEN WILL ASK BUYER FOR EVIDENCE THAT BUYER HAS ABILITY TO FINANCE ACQUISITION. Such evidence commonly takes following forms: • In Letter of Intent/Term Sheet, Buyer will specify whether third party debt or equity financing will be required, and often date by which a firm commitment for financing must be obtained • In the Purchase Agreement, Seller may ask Buyer for a rep that Buyer has wherewithal to close transaction and/or a covenant that Buyer will use commercially reasonable efforts to obtain financing • If period of time exists between signing Purchase Agreement and closing transaction, Seller will ask to be kept apprised of status of Buyer’s financing, and Seller may ask for a pre-closing covenant to this effect; Deposit by Buyer upon signing is a possibility 7 6

77. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe BUYER FINANCING CONDITION • If Buyer is in strong negotiating position or if credit markets are uncertain, Buyer will customarily obtain a “financing condition”, which is a closing condition in Purchase Agreement that says Buyer does not have to close transaction if Buyer does not obtain third party financing on reasonable terms. • If closing condition is contained in Purchase Agreement, then Buyer’s financing term sheet with bank or other financing source will often be attached to the Purchase Agreement as exhibit and serve as basis for financing terms Buyer must accept • Buyer’s financing source (i.e., bank) will usually perform its own due diligence on Seller’s business to ensure that collateral for loan (i.e., the Seller’s assets) is sound. • Consider “break-up” fees depending on circumstances of failure to close. 7 7

78. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe SELLER NOTE • If outside financing is unavailable to Buyer, parties may negotiate a “Seller note”, which is agreement by Seller to accept part of purchase price in form of promissory note rather than cash at closing. Seller notes also “bridge the gap” in valuation and in certain instances, can be used to offset indemnity claims • Seller notes customarily have a term of 1-5 years and constitute 20-50% of purchase price (but sometimes more) • Seller should remember that Seller note payments usually are subordinate to other obligations of company, including financing by outside parties 7 8

80. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe Robert Londin – rlondin@jaspanllp.com A partner in his firm’s Corporate and Commercial Transactions Group, Mr. Londin counsels numerous companies in connection with their mergers and acquisitions (both strategic and financial), financing needs and the execution of their business plans; financial concerns in capital markets transactions; emerging-growth companies; seed and venture capital clients in connection with the formation of their investment vehicles and making of their portfolio company investments; borrowers and lenders in secured financings; and companies and highly compensated executives in connection with their compensation and separation arrangements. Rob serves as general counsel to many clients and their senior executives and advisory boards. This general corporate representation covers day-to-day legal issues as well as strategic planning and business development extending to acquisition and financing concerns. He also represents technology and emerging-growth clients in connection with their strategic alliances, technology licensing, mergers and acquisitions, corporate finance, venture capital, banking transactions and general corporate needs. 8 0

81. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe Jacqueline Brooks – jacqueline.brooks@saul.com Jacqueline Allen Brooks concentrates her practice in general business and commercial law. She counsels clients in mergers and acquisitions, purchases and sales of businesses, commercial finance, private offerings of debt and equity securities, and life science transactions, and shareholder derivative matters, including shareholder demand responses and special committee issues. Jacqueline has experience representing public companies, privately owned and managed companies, nonprofit organizations and start-up companies and provides general counsel to these organizations regarding corporate matters. Prior to joining Saul Ewing Arnstein & Lehr, Jacqueline participated in Washington University School of Law's D.C. Clinic, through which she was an intern to the United States House Judiciary Committee. In this capacity, she drafted legal memoranda to assist Congressman John Conyers, Jr. and the Congressman's legislative assistants at Judiciary Committee hearings and briefings. To read more about Jacqueline, please visit: https://www.financialpoise.com/financialpoisewebinars/faculty/jacqueline-brooks/ 8 1

82. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe David Sikes – dsikes@JonesDay.com David Sikes advises clients in the areas of mergers and acquisitions, corporate governance, venture capital, private equity, and capital markets. He has counseled acquirors and sellers in a variety of M&A transactions in both private and public contexts, including mergers, tender offers, stock and asset acquisitions, and distressed companies. His capital markets experience includes private company equity and debt transactions and public company equity and convertible debt issuances. His corporate governance experience includes ’34 Act filings and general corporate advice. David advises on venture capital financings, primarily involving acquisitions of preferred stock or convertible debt. He also counsels early-stage issuers in the areas of formation and financing. David also represents a variety of pro bono clients, including organizations dedicated to providing tutoring and job skills services to at-risk youth in the San Francisco Bay Area. David is vice chair of communications of the Corporations Committee of the Business Law Section of the State Bar of California. 8 2

83. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe Garth Tebay – gtebay@valuedefined.com Mr. Tebay is a practicing Certified Public Accountant, Certified Valuation Analyst, and Certified in Mergers & Acquisitions with over 33 years of experience. He is the founder and Managing Partner of Value Defined, LLC, a business valuation and litigation support firm in Maumee, Ohio. He is also the Managing Partner of Tebay Mosley Associates, LLC, full service accounting, tax, and consulting firm in Maumee, Ohio as well as Managing Director of Source Companies Great Lakes Region, LLC (an affiliate of Source Companies, LLC in Pennsylvania) which provides value growth consulting and investment banking services to owners of medium-sized businesses. Mr. Tebay received his Bachelor of Science in Accounting in 1972 from Findlay College in Ohio. He then received certification as a Public Accountant in 1975. In 1997, he became a Certified Valuation Analyst, and was awarded the CM&A (Certified in Mergers & Acquisitions) in 2001. To read more, go to https://www.financialpoise.com/financialpoisewebinars/faculty/garth-tebay/ 8 3

84. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe QUESTIONS OR COMMENTS? If you have any questions about this webinar that you did not get to ask during the live premiere, or if you are watching this webinar On Demand, please do not hesitate to email us at info@financialpoise.com with any questions or comments you may have. Please include the name of the webinar in your email and we will do our best to provide a timely response. IMPORTANT NOTE: The material in this presentation is for general educational purposes only. It has been prepared primarily for attorneys and accountants for use in the pursuit of their continuing legal education and continuing professional education. 8 4

85. Copyright © 2019 by DailyDAC, LLC d/b/a Financial Poise Webinars™ Receive our free weekly newsletter at www.financialpoise.com/subscribe ABOUT FINANCIAL POISE DailyDAC LLC, d/b/a Financial Poise™ provides continuing education to attorneys, accountants, business owners and executives, and investors. Its websites, webinars, and books provide Plain English, entertaining, explanations about legal, financial, and other subjects of interest to these audiences. Visit us at www.financialpoise.com. 8 5 Our free weekly newsletter, Financial Poise Weekly, educates readers about business, business law, finance, and investing. To receive it simply add yourself by going to: https://www.financialpoise.com/newsletter/ Email addresses are never sold to or shared with third parties.

Structuring and Planning the M&A Transaction (Series: Private Company M&A Boot Camp)

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