M & A- New York University

Katz-Gordon
SPRING 2010

ABSTRACT M & A Outline

Class I David Katz Mar Gordon Mergers and Acquisitions !"S transa#tion $a%%en in C&C'(S 1)))-2001 $i*$est %oint+ t$en dro%%ed #onsidera,l-" 200. anot$er %ea ti/e 0or 0inan#ial deals" 1inan#ial #risis2 #an3t *et Ca%itali/%a#t on M&A a#tivit-" 4s-ner*-5 #ross savin*s" No need 0or t6o C(Os+ re#ordin* s-ste/s7et# 'evera*ed 8u-out2 la# o0 #a%ital %eo%le ,e#o/e #onservative" FACTORS 9 #onsolidation /a es sense in t$is e#ono/o/9 %rivate e:uit- 0ir/s $ave ; 9 a#tivist investorss$ort ter/ outloo <$ed*e 0unds= volatile sto# /ar et #redit #run#$,an s un6illin* to lend ; ne*ative %ers%e#tive on deals

AO'>?i/e @arner ,ou*$t AO' 6$en it 6as at its %ea + t$en ra%idl- sun " 8oston S#ienti0i#>A&A Deals *enerate une/%lo-/entB It /a- ,e *ood ,usiness de#ision+ ,ut 6$at a,out t$e ,roader %i#ture+ $o6 a,out 0or t$e #ountr- itsel0B @$at $a%%ens 6$en *overn/ent intervenesB Co//ission 1orei*n Invest/ent2 %rote#tive+ a00e#ts M&A a#tivit-" (! Dire#tive on ?a eovers2 outside (! tar*et #o/%an- #an ta e de0ensive a#tions a*ainst ta eovers" NO? in t$e (!" u!"ic Co#$any Acquisition 1= Mer*er2 2 #o/%anies *et /er*ed2 /ost #o//on stru#ture reverse trian*ular /er*er 2= ?"O2 ,u-in* sto# 0or #as$ <#o/,ined 6it$ a later /er*er+ it *ives -ou #ontrol= C= (D#$an*e use sto# or sto# and #as$" E= ProD- 1i*$t2 ta e #ontrol ,- #ontrollin* 8OD" Get t$e #o/%an- 6it$out %uttin* t$e e:uit- and 6it$out investin*2 $as not ,een su##ess0ul in t$e %ast" 8a- $ave a ,ri*$ter 0uture in #o/,ination 6it$ ?O rivate Co#$any Acquisition S/aller universe o0 SF A*ree/ents 6it$ t$e/2 state la6 /e#$anis/s" Asset A#:uisition2 not t$e ,usiness Divestures2 /a in* a##o/%an- %u,li# IPO+ or S%in O00s '8O Goin* %rivate transa#tion2 S(C Rules" I0 on ,ot$ sides o0 t$e deal+ ,e #are0ul 4interested transa#tion5 additional #onstrains"

Fostile>1riendl8OD $as t$e %o6er+ SF sa- on t$e /atter is indire#t2 t$e- ele#t t$e 8OD+ i0 sta**ered it /a- ta e /an- -ears to *et #ontrol in t$e 8OD" Govern/ent as A#:uirer AIG 8e$ind s#enes %us$in* 0or deal to /ove 0or6ards !nsettles t$e /ar et" %ey "ayers Pu,li# Co/%an 1inan#ial 8u-ers 1idelit- eDa/%le+ s$ort ter/ 0o#us 8OD not res%onsi,le 0or t$e da- to da- a00airs o0 t$e #o/%an-G oversi*$t roleG res%onsi,le to $ire su##ess0ul /ana*e/ent" Mana*e/ent2 #au*$t ,et6een 8OD and SFG in #$ar*e o0 t$e da- to dao%erations o0 t$e #o/%an-+ i/%le/entin* t$e strate*- a%%roved ,- 8OD" @all Street2 /ar et %ers%e#tive (/%lo-ees2 unions Govern/ent and Re*ulators2 a= %oliti#ians+ ,ureau#rats+ treasur-+ #on*ress+ ,= sel0 re*ulated or*anizations <SRO= ratin* a*en#-" SF retail on de#line2 t$rou*$ /utual 0unds toda-G $ed*e 0unds2 e#ono/i# interest in t$e #o/%an SF advisor- servi#es2 advise $o6 to vote+ institutional SF 0or so/eone+ i/%a#t on %roD- %ro%osals SF Constituen#-2

1= 2= C= E= H=

Controllin* SF Insiders Institutional investors Mo/ and Po% retail SF Ar,2 eDtre/el- s$ort 0o#us

Sour#es A= 1ederal Se#urities 'a6 8= State C= SRO D= 1orei*n 'a6 Class II M& A T&eory and Motives Non S$are$olders #onstituents2 o Credit #run#$ #o/%onent o0 t$e re#ession2 %ressed 0or t$e i/%ortan#e o0 t$ese ne6 #onstituents 'enders and (e!t-&o"ders o Relations$i% ,an s <Relations$i% ,an s %rovide ,ot$ de,t and e:uit- 0inan#in* to t$eir
#lients+ $ave lon*-lastin* ties 6it$ t$e/+ serve on t$eir ,oards o0 dire#tors and in so/e #ases serve as senior /ana*ers+ and rene*otiate de,t #ontra#ts durin* %eriods o0 0inan#ial stress"=

o Non-relations$i%s ,an s o Fed*e 0unds o C'O3s 8an de,t2 se#ured+ senior+ ,ond2 unse#ured+ Iunior"

S-ndi#ated2 *et a loan+ t$at ,an 6ill *et ot$er ,an s to %arti#i%ate in t$at lendin*" Fed*e 0und ,e#a/e i/%ortant %la-ers on ,ot$ de,ts2 ,an and ,ond" Collaterized ,ond o,li*ations+ C'O+ asset ,a# ed se#urities" Dr--u% a*ree/ent2 #ould not 0inan#e ot$er #o/%etin* ,ids" )uyers Strategic Co#$any <#o/%uter industr-+ 0inan#ial servi#es ind= %ur%ose o0 t$e a#:uisition au*/ent its ,usiness in a si*ni0i#ant 6a-" S-ner*- ,ene0it" o Pa- 6it$ #as$ or t$eir o6n sto# o Inte*rated 6ell 6it$ t$eir eDistin* ,usiness o eD%and $orizontall- or verti#all-2 do /ore t$in*s in t$e sa/e 0ield>do6n or u% in su%%l- #$ain" o Con*lo/erate2 e00ort to ,roaden t$eir ,usiness and diveris0- ris Financia" !uyeris in t$e ,usiness o0 doin* invest/ent" Private e:uit-+ or ,u--out 0und" o Pool investor /one-+ 0ind tar*et #o/%an-+ ,u- it 0or #as$" o Goal2 not to a#$ieve s-ner*ies+ t$e- #an run t$e ,usiness ,etter <0inan#ial stru#ture+ /ana*e/ent=" o Al6a-s %a- #as$" Non-traditiona" Financia" )uyers2 Fed*e 0unds+ Soverei*n @ealt$ 1unds" o Si/ilar to 0inan#ial ,u-ers ,e$avior" o S@12 8i* %arti#i%ants sin#e 200.-J ,u- ,ut 6it$ not *overnan#e ri*$ts2 tr- to s$o6 t$at t$e- are *ood M&A %la-ers" (istressed )ankru$tcy Mktran*e o0 #onsiderations are di00erent"

Se""ers

Strate*i# <?rue Mer*er Partners= e:ual in size" ?ar*et su,stantial in relation to t$e ,u-er 6$i#$ is un turn a strate*i# ,u-er" @$ole Co/%an- Seller 'evera*ed-,u--out2 Seller o0 8usiness or Division o Su,sidiaro 8usiness unit Distressed Seller in 0inan#ial distress+ needs inIe#tion o0 #a%ital ri*$t a6a-" Reasons 6$- Co/%anies en*a*e in M&A a#tivitKAl#atel- 'u#entL2 1ren#$ tele#o//uni#ations #o/%an20012 #o/%anies #a/e 6it$in a 6ee end o0 /er*in*" 8ro e do6n" General a*ree/ent2 /er*er o0 e:uals" 1ren#$ de#ided to #$an*e essential ter/s o0 t$e transa#tion" 200M2 ,ot$ #o/%anies+ 0a#in* 6orld #o/%etitors %ressure2 Sto# 0or sto# %ur#$ase2 neit$er #o/%an- #ould %a- %re/iu/ 0or t$e ot$ers sto# 2 so0t issues2 *et $al0 o0 t$e ,oard+ et#" o Rationale" Strategic2 #reate a ,i**er #o//uni#ation #o/%an redu#e #osts2 s%read resear#$ and develo%/ent

,i**er and diversi0ied #o/%an--N sta,le in its results+ *ood 0or t$e SF" S-ner*ies2 o &ard2 :uanti0- in advan#e2 a= #ost #uttin*>savin* <%eo%le C(Os2 redundan#-G %lants 0a#ilities and o%erations=+ ,= a,ilit- to s%read -our resear#$ and develo%/ent2 %$ar/a#euti#al" o So*t #annot :uanti0- it" As%iration2 industr- in 6$i#$ is i/%ortant to ,e t$e leader" Cro6n Ie6el2 ,el la,s2 #on#entration no,el %rize 6inners #ould not :uanti0- it"

o Cross ,order transa#tion2 /ore sto# to trade" In#reases t$e /ar et li:uidit-" <9 ,i* #o/%an-= 1inan#ial Considerations o Cost savin* 1".8" #o/,ined entit-" o AdIusted earnin*s %er s$are2 #a%a#it- *ive ,i**er dividend" It 6ill ,e /ore %ro0ita,le" 8etter earnin*s %er s$are" KFCA-8ainL 8et on *ro6t$ Run it ,etter2 ,rin* /ore Senior /ana*e/ent 6ere *oin* to ee% t$ere sto# in t$e %ost /er*er2 investors" FCA M#Kenzie2 less o%ti/isti# t$an /ana*e/ent o O%%ortunit- 0or deal2 /ana*e/ent sa-in* 6e #an do /u#$ ,etter" ris 2 8OD" Fas to de#ide ,et6een ta in* t$e ris or ta in* 8ain #a/e and said 6e are 6illin* to ta e #$an#e+ %a- H1 dollars a s$are7 o Pa- in #as$" Get loans 200M2 ever- ,an in t$e 6orld 6ants to lend /one-" 8orro6er3s / t" lo6 interest rates ,orro6 #$ea%l- /a es our ris lo6er" o Pre/ised on di00eren#e sin vie6 a,out t$e 0utureO @$o t$e a#:uierer 6ere2 RISK 8ain 6illin* to ta e" @$- do #o/%anies /er*eB o (*o o ?ar*et assets %oorl- /ana*ed

o o o o o o o o o o

A#$ieve e#ono/ies or s#ale or s#o%e Res%ond to industr- #onsolidation <S$ell+ (DDon= Create a ne6 industr(li/inate #o/%etition Res%onde #$an*es in te#$nolo*- or re*ulation I/%rove a##ess to s-%%lI/%rove distri,ution #a%a,ilities (Dtend %rodu#t lines Rationalize eD#ess #a%a#itO,tain a##ess to r&d+ s%read #osts"

1inan#ial ,u-ers2 I no6 ,etter t$an t$e / t does+ 6$at t$is #o/%an- is *oin* to ,e 6ort$ in t$e 0uture" Strate*i#2 6orr- a,out t$e %ri#e t$e- are %a-in*+ se#ondar- to t$e s-ner*ies t$eeD%e#t to *et out o0 t$e deal" @it$ ran*e o0 %ro#ess in 6$i#$ t$e deal #ould /a e sense" Financia" Rationa"e2 o a#:uire assets #$ea%l- <,uild vs" ,u-+ ti/e value ,asis+ /ore e00i#ient to ,uild it or ,u- itG ?o,in3s P2 re%la#e/ent value o0 assets t$e #o/%anies %u,li#ltraded over t$eir / t value= o a##ess to #$ea% #urren#- <a#:uiror3s sto# = o stren*t$en ,alan#e s$eet <i0 tar*et $as $i*$ %ositive #as$ 0lo6= o i/%rove earnin* %er s$are" M&A Pro#ess Anal-zin* strate*i# alternatives

o Doin* t$is all t$e ti/e o ?$in in* 6$o /i*$t 6onna ,u- t$e/+ 6$o t$e- 6ant to ,u-" Gettin* #alls 0ro/ investin* ,an ers %it#$in* t$ese ideas to t$e/" 'evera*ed 8u--out +nitia" contact-a%%roa#$-/atin* dan#e o One da-+ /ont$+ several 6ee s (ue (i"igence o 1-2 /ont$s or lon*er as needed o need #on0identialit- a*ree/ent2 #on0idential in0o+ t$e deal itsel0G standstill %rovisions i0 6e don3t a*ree on t$is deal -ou are not *oin* to use /- in0o on a $ostile ta eover" o @$at -ou are ,u-in* is 6$at -ou t$in -ou are ,u-in*" Risks, A= ,usiness ris s not in #o/%lian#e 6it$ la6s+ 0inan#ial state/ents not a##urate+ %ro,le/s 6it$ la,or unions" 8= #ontra#ts and de,t instru/ents sa- t$at u%on a #$an*e o0 #ontrol so/et$in* $a%%ens <all de,t i//ediatel- re%aid+ su%%l- #ontra#t+ #an ter/inate it= Structure2 #usto/er su%%l- #ontra#ts" Con*ir# re%resentations #o /a in* a,out t$e/selves+ %u,li#l- se# 0ilin*s+ and %rivatel-" Negotiations o Stru#ture o Pri#e )oard #eetings to a$$rove transaction o Sundao Pri#e o Do#u/entation /er*er a*ree/ent o 2-M 6ee s <a##o/%anies due dili*en#e= ?ransition si*ned and announ#ed

A0ter 2001-22 (nron+ @orld#o/" o 8OD tellin* /ana*ers+ do a lot o0 dili*en#e" ?urn over ever-t$in*" No lon*er assu/e trust o0 0inan#ials" '8-out don3t trust an-t$in*2 t$ere $old ,usiness /odel is on #reatin* ,usiness" Sensitive in 0indin* s/all #ost savin*s" No a*ree/ent on %ri#e -ou don3t $ave a dis#losa,le eventOO Class III Strate*i# alternatives 'ee6a- in t$e /er*er a*ree/ent" Due dili*en#e2 su%erseded 6$en -ou ne*otiate t$e /er*er a*ree/ent" 1indin*s o0 t$e due dili*en#e into t$e Re%s and 6arranties and in t$e ne*otiations 0or t$e /er*er a*ree/ent" Co//uni#ation stru#ture so t$at t$e results o0 t$e due dili*en#e 6it$ valuation *rou% and t$e /er*er ne*otiation *rou%" a Ne*otiations2 over 6ee end+ 1J /ont$s" Stru#ture and %ri#e" Do#u/entation2 dis#losure s#$edules to t$e /er*er a*ree/ent <eD#e%tions to t$e re%s and 6arranties #aveat+ #$an*e t$e /eanin* o0 t$e /er*er a*ree/ent as 6ell= Re%resentation2 re*ulator- a%%rovals are needed to #lose t$e deal Additional ite/s in t$e dis#losure s#$edule t$at 6ere not seen in t$e due dili*en#e" 8OD /eetin*s2 sell side 2 ,oard /eetin*s" <40ull- in0or/ed ,oard52 dis#uss+ valuation+ alternatives+ ti/in*+ et#=" Materials su00i#ientl- in advan#e o0 t$e /eetin*" Detailed eD%lanation o0 t$e /er*er a*ree/ent" 8u-er side /ore 20Q o0 -our #urrentl- outstandin* ,e0ore t$e issuan#e s$are$older a%%roval re:uired in t$e (D#$an*e sto# rules" A*ree/ent si*ned and announ#ed" Mer*er ,i**est events to t$e a#:uired #o/%an-2 ,e0ore t$e / t o%ens" &ou #an3t si*n on Monda- /ornin* and announ#e a0ter tradin* da-" S(C 0ilin*s2

o o o o

S#ed$ule 1C d+ a/end/ent Re*ulator- 0ilin*2 Pre%are re*ulator- 0indin*s2 CONC!RR(N?'& Antitrust2 not si*ni0i#ant antitrust issues2 still a 6ee or t6o+ do#u/ents read- to *o" (! 0or/ CO+ C 6ee s $and in dra0ts" o S-C *i"ings2 sto# to sto# /er*er2 %roD- state/ent sent to SF o0 tar*et #o/%an-+ needs to #o/%l- 6it$ t$e S(C rules" 200 %a*es" S%e#ial 0inan#ial state/ents Portions o0 t$at do#u/ent to t$e a#:uirer+ is SF a%%roval 8a# *round to t$e transa#tion Reasons 0or t$e /er*er Fo6 invest/ent ,an ers anal-sed t$e transa#tion Su//ar- /er*er a*ree/ent Additional s%e#ial interest t$ere /a- ,e+ *ol0en %ara#$uted+ severan#e %a-/ents+ 6$at is t$e transa#tion *oin* to tri**er Mini/u/ ti/e2 C to E 6ee s" Cas$ /er*er2 %roD- s$orter+ eas- to 0ile" C to E 6ee s" o 1CC 0ilin*s+ De%t (ner*-+ De0ense De%art/ent2 2 to M 6ee s to %re%are2 #o/%leD2 M /ont$s" o Call /eetin*2 /ail /aterials2 Sto# eD#$an*e su**ests C0 da-s ,e0ore t$e SF /eetin* <at least 20 ,usiness da-s= Pui# /eetin*s2 a%%roved /er*er a*ree/ent+ 8OD 0idu#iar- duties *o a6a- <0or ,est deal= no s$o% %rovision+ 6ill eD%ire on#e SF $ave a%%roved" Close t$e da- t$e SF vote in 0avor o0 t$e transa#tion" Re*ulator- 0indin*s /a- not allo6" o o o Inte*ration %lannin* u% 0ront Cannot start inte*ratin* until a0ter -ou re#eived antitrust a%%roval <%re #losin* o,li*ation=" Co/%anies need to /aintain se%arateness" 1ine to %lan+ as lon* as it doesn3t a00e#t o%erations" Close 6it$out *ettin* a%%roval2 i0 ,ene0its are /ore i/%ortant <s/all 0ines=" @$at t$e #ost o0 #losin* are+ nature o0 -our ,usiness"

Overview o* $re"i#inary considerations K?$in a,out all t$ese ,e0ore si*nin* t$e M(RG(R AGR((M(N?L A= 8= C= D= ?ransa#tion Stru#ture2 6$o is a#:uirin* 6$o/+ 6$at is t$e survivin* #o/%an-" Dire#t Mer*er ?rian*ular Mer*er ?ender o00er 1or/ o0 #onsideration Sto# Cas$ Notes Pri#in* Stru#ture 0or Sto# Deals Pri#e a" One $al0 s$are o0 sto# ," 1iDed (= ?aD #on#erns /ost e00i#ient+ 1= #or%orate %ers%e#tive+ 2= SF %ers%e#tive a" Di00erent level o0 taDation2 ; #as$+ t$e-3ll *et taDedG s$are eD#$an*e taD 0ree transa#tion" Cor%orate level taD2 order+ stru#ture+ i0 -ou don3t do it ri*$t -ou #an end u% tri**erin* a taD" 1= A##ountin* Con#erns a" GAAP2 s-ste/i# ,et6een di00erent #ountries standards" Foe it is *oin* to a00e#t t$e 0inan#ial state/ents o0 t$e a#:uirer on#e t$e deal *ets done" Ralue o0 s$ares #an ,e i/%a#ted G= (/%lo-ee ,ene0it issues2 %ensions2 $o6 $ave t$e- ,een 0unded+ tri**er a re%ortin* re:uire/ent+ tri**er %a-/ent re:uire/ents" F= Mana*e/ent retention2 a" Si*nin* to #losin* tar*et #o/%an- stand%oint+ t$e- don3t no6 i0 t$e deal 6ill #lose <retain /ana*e/ent and e/%lo-ees2 transa#tion 0ails+ %osition to start 0res$ 6it$out $avin* to $ire ne6 %eo%le=+ a#:uirer di00erent /otivation2 #ares value t$at is re#eivin* on #losin*2 a#:uirin* a 0as$ion desi*ner2 leave e/%t- ,oDO ," Post #losin*2 in#entivize to sta-2 sto# o%tions+ ot$er in#entives" I/%a#t on /a##ountin*+ transa#tion stru#ture7

i" 1ire t$e ot$ers" I= Re*ulator- #on#erns2 <t$in ,e0ore -ou si*n $o6 -ou value t$e #o/%an-+ 6$at %ri#e -ou are *oin* to %a- 0or t$ose s$ares= a" Cost ," Divest so/et$in*B #" Ne6 a%%rovals d" 8u-in* a ,usiness t$at I need to *et a li#ense ,e0ore o%eratin* it e" Sell a %ie#e o0 it ,e#ause I a/ a 0orei*n #o/%anA= Mar et a##e%tan#e Due Dili*en#e2 does not sto% 6$en -ou si*n t$e deal A##ess #lause2 #ontra#tual re:uire/ent t$at t$e Seller let t$e 8u-er in to ,e*in t$e due dili*en#e" ?est t$e re%s and 6arranties and re#eive in0o a,out 6$at is $a%%enin* in t$e ,usiness" Sar,anes ODle-+ does not sto% 0raud" Pi# ed u% #on#erns+ tal to t$e a##ountant2 Pu,li# Co/%an-2 t$ere is no ot$er ,ite at t$e a%%le2 re%s and 6arranties die at #losin*2 no %art- around to %rovide inde/nit-" 'iti*ation trust2 tr- t$isO <#o//on in %rivate #o/%an- deals= Rare in %u,li# #o/%an- transa#tions" !S2 a#:uirer advised ,- #ounsel+ re*ulator- #ounsel+ invest/ent ,an er <valuation=+ PR <$el% announ#ed t$e deal=+ %roD- soli#itor <S$ a%%roval+ to *et sense di00i#ult to *et tar*et SF to a%%rove= Assistin* t$e %rin#i%als C(O C1O senior /ana*e/ent" A##ountants earl- state2 #o/e u% 6it$ a stru#ture t$en *o to t$e a##ountants" More #o/%leD /a- start 6it$ t$e/" !K due dili*en#e led ,- ,an ers+ ,usiness dili*en#e" ?a e /ore lead at t$e stru#ture" Rule driven2 ,an er /a in* t$e o00er+ not t$e a#:uirin*" Structures 1"- Strai*$t 1or6ard /er*er2 4dire#t /er*er5 2 entities involved+ end u% 6it$ 1" <#onsolidation= ?aD advanta*eous I0 tar*et $as li#ensees or ot$er t$in*s t$at are tri**ered ,- t$e /er*e+ it /a- ,e additional #osts"

2"- 1or6ard trian*ular /er*er2 used 0or taD %ur%oses+ C entities end u% 6it$ 2 ? /er*ed into t$e MSu,+ A#:uirer %a-s sto# or #as$ to ?S$" C"- Reverse trian*ular /er*er 2 @$en t$e su,sidiar- o0 t$e a#:uirin* #or%oration /er*es 6it$ t$e
tar*et 0ir/" In t$is #ase+ t$e su,sidiar-Ss e:uit- /er*es 6it$ t$e tar*et 0ir/Ss sto# " As a result o0 t$e /er*er+ t$e tar*et 6ould ,e#o/e a 6$oll--o6ned su,sidiar- o0 t$e a#:uirer and s$are$olders o0 t$e tar*et 6ould *et s$ares o0 t$e a#:uirer"

o /ost #o//onl- used in !S+ o C entities end u% 6it$ 2 o tar*et entit- re/ains t$e one survivin*+ 6$ole o6ned Su," Ma- not tri**er t$e li#enses+ et#7 o dire#tion o0 t$e /er*e and 6$at t$e survivin* entit- is o taD advanta*eous" E"- Dou,le Du//o Foldin* #o/%anies to do t$e a#:uisition" o Fad H entities involved in t$e transa#tion" o (a#$ reverse trian*ular /er*er o (nd u% as 6$oll- o6ned su,sidiaries" International $oldin* #o/%anies+ and ,ot$ end as su,sidiaries" SPIN O11 Parent 6it$ lots o0 su,sidiaries" @ants to *et rid o0 so/e o0 its o%erations Ne6 #o/%an-+ %ut it in t$e ne6 #o/%an-2 distri,ute t$e s$ares to t$e SF" Givin* one o0 its su,sidiaries 0or 0ree to its o6n s$are$olders" ?6o s$ares+ o0 t6o di00erent #o/%anies" @$-B (uro%e2 1= de /er*er 4de s-ner*ies52 /ana*e/ent tea/ 0ood at one ti/e o0 ,usiness+ #ould not 6at#$ all72= a#:uiror /a- 6ant t$at %art ,ut not all t$e ,usiness+ C= 0inan#in* /atters" o Distri,utin* %$ar/a#euti#al dru*s+ nursin* $o/es+ ot$er $o/es 6ere in #o/%etition" se%arated t$e t6o #o/%anies" S?OCK SA'( ASS(? SA'(2 #$err- %i# 2 *et to #$oose 6$i#$ lia,ilities -ou 6ant to ta e" Su,stantiall- all assets2 lia,ilities %ass on 6it$ t$e assets+ i0 not tr- to *et inde/nities or es#ro6 a##ount"

Sto# $olders a#:uirin* #o/%an-2 %u,li# #o/%an- al6a-s voteO SF vote i0 strai*$t /er*er2 Del la6 need a vote o0 all #onstituents o0 t$e /er*ers" Doesn3t /atter #as$ or sto# ?rian*ular2 SF o0 ea#$ o0 t$ose entities+ tar*et #o/%an- SF+ a#:uirin* SF o0 t$e su,sidiar-" CASF noB o Sto# 2 issuin* is /ore t$an 20Q o0 t$e nu/,er o0 s$ares #urrentloutstandin*2 need to vote t$e additional issuan#e o0 t$e s$ares" MaIorit- o0 outstandin* s$aresOO N&S(+ NASDAKG /aIorit- o0 s$ares votin*2 Sto# 2 dilutin* #urrent SF o6ners$i%" SF add un#ertaint-" (ea" certainty2 eDtre/el- i/%ortant" ?ar*et needs to %resent it not as an o%tion to ,u- t$e/ ,ut an o,li*ation" o Su//er 200J Do6 C$e/i#als2 1J8 #as$ deal" No %rovision t$at allo6ed Do6 out o0 t$e deal 0or 0inan#ial issues" Ku6ait Ioint venture+ %art o0 t$e 0inan#ial" De#e/,er Ku6ait ,a# ed out leavin* Do6 6it$out enou*$ 0unds2 loo ed 0or a 6aoutO I0 t$e SF 6ould $ave voted out o0 t$e deal+ 0or 0reeOO Consideration TA. Re#eive #as$2 taDa,le to t$e ones t$at re#eived t$e #as$" I0 sto# 2 re#eivin* #o/%anies SF 0ree2 taD de0erred" I0 -ou %a- 20 and t$e deal is done at E0; a s$are" Ca%ital Gain taDa,le" 8asis+ ne62 -ou3ll *et taDed on t$e *ain 6$en -ou 6ant to sell" No taD #onse:uen#e at t$e ti/e o0 t$e transa#tion" MiDed2 #onsideration /iDed2 #as$ %ortion al6a-s taDa,le+ sto# %ortion #an ,e stru#tured to ,e non taDa,le2 rules to ,e #o/%lied 6it$2 reverse trian*ular /er*er2 sto# %ortion as lon* as t$e deal is at least J0Q in sto# G 0or6ard trian*ular /er*er2 as /u#$ as H0 or HH #as$+ still not taDa,le" Stock value o0 s$are toda-+ a*ree 6it$ t$e assess/ent o0 8OD+ /a e t$e a#:uirer /ore valua,le+ %arti#i%ate on t$e u%side" Purel- /onetar-2 su,stitute 0or #as$+ I onl- #are o0 t$e dollar value" I 6ant a 0iDed value" 4Co""ars5 Deter/ines 6$i#$ 6a- t$e- see t$e transa#tion o Fi/ed e/c&ange ratio2 1 to 1" ON t$e da- t$e /er*er #loses Folders o0 tar*et #o/%an- sto# t$e- surrender+ *et ,a# one s$are o0 a#:uirin* #o/%an- sto# " I0 toda- tradin* ;E0 s$are deal" In realit- su,Ie#t to 0uture 0lu#tuation ,e0ore #losin*" </ont$s+ /a-,e -ear= ;M0

o Fi/ed va"ue e/c&ange ratio2 tar*et #o/%an- SF 6ill re#eive so/e nu/,er o0 a#:uirin* nu/,er sto# t$at $as a value on t$at da- o0 ;E0" Don3t no6 $o6 /an- s$ares t$at 6ill ,e" Me#$anis/ to li/it t$e e00e#ts o0 eit$er one o0 t$ese a%%roa#$es2 *eneralla%%ro%riate to $ave a 0iDed eD#$an*e ratio+ I need a do6nsize %rote#tion" O I need %rote#tion on t$e u%sideO o I0 it *ets t$ere+ at #losin* it 6ill turn /ore #losel- to a 0iDed value eD#$an*e" o @it$in so/e ran*e 6e are *oin* to t$is a%%roa#$ and 6it$in t$e ot$er a%%roa#$ 6e3ll *o 6it$ t$e ot$erO 01a"k away2" ?ar*et t$in s a#:uirers 6ill not *et a6a-" o Roi#e strea/2 i0 6e don3t do t$is deal+ 6ill ,e tradin* 0or /u#$ less" Did not eDer#ise t$eir out+ Dut#$ tele#o/ did not $ave to %a- even /ore" 3et !ot&B &es Deter/ination o0 Pri#e

@$o de#idesB On 6$at ,asisB @$at is 1airness O%inionB 40air5B 1"- Dis#ountin* Cas$ 1lo6 Anal-sis2 #as$ 0lo6s o0 earnin* o0 t$e ,usiness are over so/e %eriod o0 ti/e+ dis#ount to t$e %resent2 RA'!(" 2"- S$are Pri#e2 i0 -ou ,elieve in e00i#ient /ar et2 esti/ate o0 t$e #o/%an-3s 6ort$" C"- 8uild vs" 8uE"- Ot$er deals done 6it$ si/ilar ,u-ers+ industries+ et#"" H"- Co/%ara,le Co/%anies Anal-sis2 loo at $o6 t$e sto# / t value -our sto# + and #o/%ara,le #o/%anies" Pri#e to earnin*s ratio2

M"- Contri,ution Anal-sis2 $o6 /u#$ o0 our #o/%anies e:uit- are 6e *ivin* a6a- to t$is #o/%an- to ,e %art o0 us" Issue C0Q /ore s$ares+ 6$at are 6e *ettin* 0or t$at" ?ar*et #o/%an- is #ontri,utin* E0Q o0 t$e revenues o0 t$e #o/,ines #o/%anies+ ,ut onl- 20Q o0 t$e earnin*s+ and C0Q o0 t$e asset value and 2JQ oil reserves7"add all t$ese /easures 1air s$are o0 t$e s-ner*ies2 sto# in#rease+ value #reation2 needs to ,e a 0air s$arin* o0 t$at" Cas$ deal2 needs to #o/e out 0ro/ $ere" Not *oin* to ,e SF o0 t$e a#:uirin* #o" Sto# 2 $ave a %re/iu/" Mer*ers o0 e:ual transa#tion2 no %re/iu/2 no,od- reserves to ,e %aid eDtra+ 6e ,ot$ t$in t$at ,- #o/,inin* 0or#es t$e sto# 6ill rise" Sto# %ri#e a%%re#iation" Class IR re"i#inary Considerations 1" Stru#ture 2" 1or/ o0 Consideration C" Pri#in* (t# -#$"oyee )ene*its and Manage#ent Retention ( retained+ /ana*e/ent in#entivized" (/%lo-ee2 #o/%ensation and ,ene0its on#e t$e /er*er $a%%ens2 a= #o/%ensation+ in#rease or de#rease" <%rovision on a /er*er a*ree/ent= a#:uirer %ro/ises t$at 0or a %eriod o0 one -ear 6ill $ave #o/%ensation and ,ene0its t$at is no less 0avora,le in t$e a**re*ate+ not less 0avora,l- t$an t$e e/%lo-ee t$at t$e a#:uirer" Not en0or#ea,le ,- an-,od-" No t$ird %art- ,ene0i#iaries" Get a #ovenant to %ro/ise+ ,ut it is unen0or#ea,le" Co/%ensation t$at $ave alread- re#eived2 e:uit- #o/%ensation+ sto# o%tions or restri#ted sto# 2 vestin* s#$edule" A##eleratin* vestin*2 u%on /er*er all sto# o%tions are i//ediatel- vested" 'oo at tar*et #o/%an- %lans2 #ontain #$an*e o0 #ontrol tri**er" De0ault is t$at -ou $ave a##elerated vestin* ,ut 8OD #an %revent t$is in t$eir Iud*/ent" Cas$ed out or rolled over2 *et #as$ in lieu o0 t$eir e:uit-" Sto# 0or sto# deal2 -ou #an *et 6$at is #alled 4roll over5 -ou *et o%tions to a#:uire sto# o0 t$e a#:uirin* #o/%an-" Mana*e/ent Issues2 o Sti# 0ro/ si*nin* to #losin*+ s/oot$ transition2 sta- at least so/e ti/e a0ter #losin* Sta- 8onuses-Retention Pools" o Golden %ara#$utes a= Sin*le tri**er2 #o/%letion o0 a #$an*e o0 #ontrol transa#tion+ ,= dou,le transa#tion+ I #$an*e o0 #ontrol & II e/%lo-ee needs to ,e 4#onstru#tivel- ter/inated5"

De0ense to $ostile ta eovers2 anti ta e over /easure2 6or o0 -ou $ave sin*le tri**er arran*e/ents" Put in %ara#$utes in order to s%i e a ta e over a#:uirer2 o6n senior /ana*e/ent 6ill *et 6ell %aid" 4@indo6 Period52 #on#erned 0or#ed to 6or 0or an e/%lo-er t$at t$e- $ave not eD%e#ted to" 1or one /ont$ 0ro/ t$e 12 /ont$ to t$e 1Ct$ anniversar- o0 t$e #losin* #an leave on $is o6n a##ord and *et %aid t$eir entire severan#e2 rationale2 tr- to 6or t$in*s out and i0 it does not 6or -ou #an 6al a6a-"

Re*ulator- A*en#ies !S De%t o0 Austi#e>1ederal ?rade Co//ission <Antitrust= (! Co//ission <Antitrust= 1ederal Co//uni#ation Co//ision <internet+ /edia= OCC+ 1ed 1DIC =,an in*+ 0inan#ial servi#es+ insuran#e= De%t o0 De0ense <aeros%a#e= De%t o0 (ner*- <ener*-+ %o6er and 0uels= (arl- on+ *et into tal s 6it$ t$e re*ulators" 1))02 s$i% ,uilders" Nu/,er 2 a#:uire nu/,er E" Re%resented nu/,er C+ disadvanta*e at ,iddin* 0or s$i% ,uildin*" Fostile deal to ,u- nu/,er 2 or nu/,er E" ?al ed antitrust de%art/ent+ senators and #on*ress/an+ de%art/ent o0 de0ense" Not 6it$ t$e Se#retar- o0 t$e Nav- <1))J ,o/,in* #a/%ai*n in Kosovo= %reventin* t$e/ in ,u-in* N 2" Could ,u- NE" Do not sur%rise t$e Re*ulator" @$at are t$e o,sta#les+ 6$at are -ou *oin* to do to over#o/e t$e/" Market Acce$tance Press Releases Dealin* 6it$ (/%lo-ee S(C 1ilin*s Anti#i%atin* Pri#e Move/ents

'ea s2 no o,li*ation to dis#lose ne*otiations until t$e deal is 4#ertainl-5 *oin* to $a%%en2 $rice and ter#s agree#ent+ a%%roval o0 8OD o0 ,ot$ #o/%anies" 8e0ore t$at2 /i*$t not $a%%en ,e /ore /isleadin* to t$e / t to dis#lose t$an to not dis#lose" Don3t $ave a 4dis#losa,le event5 'ea 2 no o,li*ation to #orre#t on ru/ors2 no #o//ent %oli#-" I0 -ou are t$e sour#e o0 t$e lea -ou $ave a dut- to #orre#t" Still 6ant to #orre#t it2 / t is rea#tin* to t$e ru/ors2 a00e#tin* -our sto# ne*ativel-" Negotiating M&A Con0li#tin* Con#erns Target Certaint- t$e deal 6ill #lose Certaint- %ur#$ase %ri#e value 2sto# 0or sto# deals eD#a$*e ratios and t$e li eO (nsure ,oard 0ul0ills 0idu#iar- duties2 %rote#t t$e/ 0ro/ la6suits O%%ortunit- to ta e u% a ,etter deal i0 its #o/es alon* )uyer o Get 6$at it is %a-in* 0orO A,ilit- to *et out o0 t$e deal2 /isre%resentation2 A= tar*et 6as 6orse in so/e 6a- t$at -ou t$ou*$t it 6as+ 8= i0 it ,e#o/es 6orse t$an -ou t$ou*$t o0" O%tion2 i0 I 6ant to+ i0 I $ave anot$er *ood o%%ortunit- *o *et t$at one" 'evera*ed transa#tion2 #ant *et t$e 0inan#e" ?$in*s *et 6orse 0or -ouO Or t$e 6orld #$an*es 0or t$e 6orseO o ?ar*et not to $ave an o%%ortunit- to ta e anot$er o00er" o Pur#$ase %ri#e adIust/ent o Mini/ize o,li*ations to ta e %otentiall- $ar/0ul ste%s in order to %lease re*ulators" Get rid o0 assets as a #ondition to #losin*" ?rade a6a- %ri#e 0or #ertaint-O <o0 t$e deal #losin*=

M-R3-R A3R--M-NT Stru#ture Annotated Mer*er A*ree/ent FCA 1" 2" C" E" A*ree/ent to e00e#t t$e /er*er Mer*er /e#$ani#s-treat/ent o0 sto# and o%tions Re%resentation and 6arranties Pre #losin* a*ree/ents and #o//it/ents Restri#tion on %re-#losin* ,e$aior Co//it/ent to *et t$e deal done Ot$er a*ree/ents deal %rote#tion no s$o% e/%lo-ee /atters taD /atters %ost #lo**in* 8OD /ana*e/ent %arti#i%ation Closin* ?er/ination Provisions Mis#ellaneous

H"

M" ." J"

Mutual Conditions2 antitrust a%%roval"

Individual Condition2 invo ed ,- one %art- or t$e ot$er" Re#itals2 state/ents o0 intent+ no le*al 0or#e" (viden#e to 6$at t$e %arties intended" No su,stantive e00e#t AII ?$e Mer*er2 at t$e (00e#tive ?i/e2 Mer*er Su, 6ill /er*e 6it$ and into t$e Co/%an-+ Co/%an- 6ill survive" R(R(RS( ?RING!'AR M(RG(R Closin*2 C ,usiness da-s o0 all #onditions ,ein* satis0ied" Mar etin* %eriod2 uni:ue to 0inan#ed levera*ed ,u-out" AIII Consideration (a#$ s$are o0 /er*er su,2 #onverted into sto# o0 t$e survivin* #or%oration" FCA sto# outstandin* at t$e ti/e o0 t$e #o/%an-2 auto/ati#all- #an#elled AIR Re%resentations and @arranties Cor%orate eDisten#e and %o6er Cor%orate Aut$orization Govern/ent Aut$orization Nin #ontravention Ca%italization Re%orts and 1inan#ial State/ents !ndis#losed 'ia,ilities Dis#losure 1un#tion2 In0or/ation to t$e ,u-er Serve as a #losin* #ondition Inde/nit-2 %rivate #o/%an- deals2 re%resentations and 6arranties 6ill serve as a ,aseline 0or inde/ni0i#ation" Aide to due dili*en#e

Allo#ate ris s2 neit$er %art- $as a /oral ri*$t to %ut stu00 on t$e dis#losure s#$edule"

8u-er 6ants lot o0 re%resentations?ar*et %us$es ,a# 2 dis#losure s#$edule2 tar*et dis#loses t$in*s t$at 6ould ot$er6ise ,e a /isre%resentation" Puali0- t$e re%resentation" Material adverse e00e#t" 4ua"i*ier to a lot o0 #ovenants and re%ress" Serves as a c"osing condition or ,rin*-do6n" 8u-er2 does not $ave to #lose i0 t$ere $as ,een a ,rea#$ o0 re%resentation and 6arrant- t$at it a/ounts to a /aterial adverse e00e#t" o ?-son-I8P <2001=2 ,usiness+ assets+ lia,ilities or results o0 o%eration o0 t$e #o/%an- and t$e su,sidiaries ta en as a 6$ole o Court *ave a seller 0avora,le readin* to it2 1= si*ni0i#ant to t$e ,u-ers invest/ent t$esis #al#ulation to do t$e deal+ 2= %ro,le/ durational si*ni0i#ant </ore t$an a :uarter or t6o=" o Peo%le assu/es a ,u-er 0avora,le de0inition" Got lon*er and lon*erO o (ntirel- Su,Ie#tive2 no o,Ie#tive /easures to it" ?oo $ard to :uanti0-" Constru#tive a/,i*uit-2 a*reein* to disa*ree A0ter ?-son2 /ore o,Ie#tive #lauses+ 6$en t$ere is a s%e#ial #on#ern Class R Re$resentation and 1arranties Pa*e 20 o0 Mer*er A*ree/ent ?$e ,u-er is res%onsi,le 0or readin* and no6in* ever-t$in* %u,li# 0ilin* eD#e%t 0or t$in*s identi0ied as a ris 0a#tor in t$e %u,li# 0ilin*" <i0 not un0air to t$e ,u-ers=7 Cor%orate Aut$orization2 to enter a*ree/ent2 i/%ortant re%resentation onlSF vote t$at is ne#essar- is a /aIorit- votes o0 outstandin* s$ares" !nani/ous a%%roval o0 t$e tar*et ,oard" o I/%ortant ,e#ause t$e- /i*$t not a%%rove it" No dissent on t$e ,oard re#o//endation o SF la6suit2 ,oard so/e$o6 ,rea#$ed its 0idu#iar- duties" <i/%ortant in #on0li#t transa#tions= Deal #ertaint-2 *ettin* re*ulator- a%%roval" A*ree/ent ,et6een %arties as to 6$at re*ulator- a%%rovals are ne#essar-" Ca%italization2 6$at sto# it $as outstandin*" o Need to ,e a##urate2 /ore t$an re%resented so t$at -ou no6 $o6 /u#$ -ou are *oin* to %a-O o I/%ortant to no6 i0 t$ere are ot$er #lasses o0 sto#

Re%orts and 1inan#ial State/ents" o I 6ill read all %u,li# in0o ,ut -ou need to re%resent t$at t$e- are a##urate and t$at t$e- still $old *ood toda-" o 1airl- %resents2 standard t$at a##ountants use2 40airl- %resent in all /aterial res%e#ts t$e 0inan#ial results o0 t$e #o/%an-5 !ndis#losed lia,ilities o No $idden or undis#losed lia,ilities" Contin*ent lia,ilities+ environ/ental" @orried i0 -ou are tar*et2 re% ,ein* ,rea#$ and 6al in* a6a0ro/ t$e deal" Co/%ro/ised %$rasin*2 eD#e%t 0or7"list o0 eD#e%tions2 re0le#ted or reserved on t$e ,alan#e s$eet+ in#urred in ordinar#urse o0 ,usiness a0ter ,alan#e s$eet da- <#ould ,e enor/ousO= Prote#tion a*ainst2 ti/e ,o/,s+ environ/ental+ %rodu#t lia,ilit-+ a##ountin* 0raud" A,sen#e o0 #ertain #$an*es or events" 1airness O%inions 0ro/ invest/ent ,an in*2 SF a%%roval" 1uture 'a6suits" Ralua,le eviden#e in a la6suit" <s%e#iall- in #on0li#ted transa#tions=

Artic"e 52 Re$resentation *ro# )uyer to t$e ?ar*et" Cas$ transa#tion2 S$ don3t reall- #are t$e- *et t$eir end o0 t$e deal" o Relevant to *ettin* t$e deal #o/%leted" o Cor%orate Aut$orit-G *overn/ental aut$orizationsG 0inan#in*" Sto# 0or sto# /er*er2 lar*er set o0 re%resentations Mirror re%resentations" Si/ilar in size2 /er*er o0 e:uals <'u#ent Al#atel= /irror identi#al" Dissi/ilar in size2 ,u-er lar*er t$an tar*et2 not /irror re%s" o 8 need in0o 0ro/ tar*et :ualit- o0 #o/%an-+ in order to inte*rate our #o/%anies" 'a,or #ontra#ts and e/%lo-/ent+ not /aterial 0or t$e tar*etO ?aDes+ re*ulator- #o/%lian#e" o 1e6er re%resentation 0or/ t$e ,u-er2 8 needs /ore detail t$an t$e ot$er 6a- round" !sin* re%s 0or /ore %ur%oses" o Due dili*en#e2 /ore i0 one is ,i**er+ /irror i0 t$e- are e:uals"

Artic"e 5+ Negative Covenants 8e$avior ,et6een si*nin* and #losin*" In ordinar- #ourse #onsistent 6it$ %ast %ra#ti#e" Don3t *ive u%2 ee% tr-in* -our ,est" Kee% runnin* -our ,usiness" III" (/%lo-ees-o00i#ers Kee% t$e tar*et on a narro6 %at$2 a00ir/ativel- tr-in* to run t$eir ,usiness+ #onstrained not to *o o00 ,oard" Can3t #$an*e ,- la6s+ enter /er*ers+ sell assets+ /a e /aterial a#:uisitions" Ca%ital eD%enditures2 o O,li*ated to ee% runnin* in ordinar- #ourse2 a,le to s%end t$e #a%ital ne#essar- to a#tuall- run ,usiness" Cus$ion to deal 6it$ /aIor %ro,le/s" o I a/ *oin* to o6n -ou2 I de#ide 6$at -ou do" o Seller2 I a/ not sure t$is is *oin* to #lose2 I need t$e 0leDi,ilit-" o Co/%ro/ise" Dividends" 'i/itations (/%lo-ee 8ene0its" 8u-er2 'i/itations Cas$2 re% t$at t$e- 6ill $ave 0inan#in* on #losin* 8e$avior2 not reall-2 #an3t ta e an- a#tion t$at 6ould /ateriall- dela- t$eir a,ilit- to *et t$e deal done" Sto# 0or sto# 2 0e6er restri#tions ?ar*et SF to $ave /ore ri*$ts ,e0ore #losin* t$an t$e- 6ill $ave as SF a0ter #losin*" -**ort Section S ."22 reasona,le ,est e00orts" 8u-er 6illin* to do2 re*ulator- a%%rovals2 #arve out2 se#tion #2 #o/%l- 6it$ re*ulator- a%%roval" 'i/its t$is #o//it/ent2 not re:uired to 0ollo6 o,li*ations %osed ,- antitrust a*en#-2 #an 6al a6a-"

4Material adverse e00e#t on t$e #o/%an- is t$e standard52 ,u-er doesn3t $ave an,usinesses" @indo6 dressin*" @$- is it not a $ell or $i*$ 6ater" I/a*ine a strate*i# deal <'u#ent> Al#atel+ t6o #o/%anies in t$e sa/e industr-= even 0urt$er2 %ro%ose+ ne*otiatin*+ #o//ittin* to and e00e#tin*2 sale+ divesture+ dis%osition o0 an- assets or ,usinesses" 9#$an*e ,e$avior %ost #losin*" A&A ,iddin* 6ar ,et6een t$e/ and 8oston S#ienti0i#" A*ree/ent 6it$ GidenB Fell or $i*$ 6ater #lause2 6e 6ill tr- $ard ,ut t$ere is a li/it" Deal at t$is %ri#e t$e deal 6ill no lon*er ,e 6ort$ 6$ile 0or us" Not6it$standin* t$e 0ore*oin*2 divest assets o0 t$e #ardia# r$-t$/ /ana*e/ent ,usiness7onl- ,e re:uired to a*ree to divestures o0 su#$ assets t$at individuall- or in t$e a**re*ate 6ould not reasona,l- ,e eD%e#ted to $ave *reater t$an de /ini/is adverse a00e#t on t$e #o/,ined #ardia# r$-t$/ /ana*e/ent ,usiness o0 t$e %arent" S%e#i0i# su,Ie#tive test2 de-/ini/is+ /aterial a00e#t O,Ie#tive test2 in /illions o0 dollars" 8ot$ O,Ie#tive test2 tar*et 0or re*ulators2 te/%t t$e re*ulator to ta e advanta*e o0 it" De,ate" De%ends on t$e a*en#- t$at -ou are dealin* 6it$" !S 1ederal Re*ulators2 o,Ie#tiveG tr- to /a e t$e re:uest on t$e /erit" 8usiness %eo%le al6a-s %re0er t$e o,Ie#tive standards+ $ide it in t$e dis#losure s#$edule+ *entle/en a*ree/ent#an t to t$isO Dis#losure to SF 6$en votin* on t$e deal2 se#urities la6 %ro,le/" Conditions P M0+M1 Fave to $a%%en ,et6een si*nin* and #losin*2 Mutual Conditions2 i0 t$e- don t $a%%en eit$er side #an 6al a6a-" SF a%%roval+ ot$er a%%rovals <re*ulator-=" Se%arate2 onl- t$e ,u-er #an 6al a6a-" A2 Re%s and @arranties2 4?$e 8rin*do6n5" As o0 t$e (00e#tive ?i/e <Closin*= eD#e%t 6$ere 0ailure to ,e a##urate not reasona,l- ,e eD%e#ted to $ave a /aterial adverse e00e#t" <:uali0i#ations= Di00i#ult to %rove /aterial adverse e00e#t" No Dela6are #ase Disa*ree/ent unusual2 re%s $ave to ,e true at sin*in* AN( #losin*" S E"H2 #a%italization true in all /aterial res%e#ts" 4Re%s $ave to ,e true 6it$out giving any e**ect to any qua"i*ications75 8u-er ar*ues 0or it" Can -ou a**re*ate a #ross re%rs and 6arranties" Material adverse e00e#t2 alread- #overed2 re%s s$all ,e true and #orre#t individuall- or in t$e a**re*ate7" &es in t$is #ontra#t @$at are -ou allo6ed to a**re*ate2 a**re*ate little %ro,le/s2 in and o0 t$e/selves don3t ,rea#$ a re%s or 6arranties"

o (D2 no liti*ation %endin* t$at 6ould $ave a /aterial adverse e00e#t 6 no undis#losed lia,ilities t$at 6ould $ave a /aterial adverse e00e#t 6 no re*ulator- 0ines %endin* a*ainst us t$at 6ould $ave a /aterial adverse e00e#t 77 ,u-er 6ould still $ave to #lose" ?$is %arent$eti#al allo6s t$e ,u-er to a**re*ate t$e/ and allo6 t$e/ to 6al a6a-" <ta e a6a- :uali0i#ations= o Dis#losure S#$edules2 ,ased on re%s as t$e- are 6ritten" I0 t$e- are :uali0iedT6on3t dis#lose events t$at 6on3t /eet t$e t$res$old" !N1AIR" ?i%2 s#$edule ever-t$in* -ou #an t$in o0" Covenants-Re%s2 Covenants2 tar*et #o/%an- a00e#t t$e value or %ri#e o0 t$e deal" S E"10 is a Re% sin#e last ,alan#e s$eet da-" and t$e Condition2 Arti#le E Re%s2 :uali0ied ,- dis#losure s#$edules+ %u,li# 0ilin*sOO Cant #ount to6ards /aterial adverse e00e#t" Arti#le M Condition2 no re0eren#e to t$ose7%ossi,le to ,u-er to #lai/ so/et$in* ,ad $as $a%%ened" @ildl- un0air to t$e tar*et M&A la6-ers don3t *et t$isO GAPOO Allo6s -ou to re0er ,a# to t$ose do#u/ents" 1inan#in*OOO Readin*2 1J-2E" Cla ss RI 1e,ruar- 22 +8 Financing rovisions Co##it#ent 'etters2 #as$ 0or t$e deal2 loans 6it$ interest+ /a- ,e se#ured" 'oan Se#ured loan2 ,u-ers 6ould %led*e t$e sto# + or assets Su,ordinated notes or ,onds Converti,le ?$is deal2 se#urit- interest in t$e assets o0 t$e #o/%an-+ ,orro6er FCAG re/ainder in 0or/ o0 ,onds unse#ured" Mar et t$e loan <sell it= I0 /ar etin* not su##ess0ul2 8rid*e 1inan#in*2 eD%ensive loan to #over a %eriod o0 ti/e 6$en t$e nor/al 0or/ o0 loan is not availa,le" Co//itted to 0und so/e ;+ tr- to *et t$e ot$er a/ount 0ro/ ot$er %eo%le+ i0 t$e- #an3t t$e C ,an s 6ill 0und t$e 6$ole t$in* 8!? onl- under a !ridge "oan2 #ostl- ter/s don3t 6ant to 0und it t$e/selves" Re%s and @arrant- % CE>CH #o/es 0ro/ t$e ,u-er

Covenant -quity Co##it#ent 'etters2 e:uit- #o//it/ent to invest in t$e #o/%an-G ,a# u%" Gettin* sto# Private e:uit- 0ir/s did not si*n t$e a*ree/ent2 0or/ s$ell #o/%an- to ,e ,u-er 2 s$ells $ave %ra#ti#all- no /one-+ to 0und t$eir e:uit- to t$e s$ell #o/%an-" S$orter letters2 6e 6ill ea#$ %a- 18 at #losin*2 onl- #ondition is t$at t$e /er*er a*ree/ent ,e #losed on its ter/s+ and t$at t$e ,an s *ive t$eir 0undin* at t$at ti/e" ?ar*et2 not %art- to an- #o//it/ent letter" No %rivit-" @$at re/edies i0 eit$er %artre0uses to 0undB Alternative 1inan#in*2 so lon* as t$e ne6 0inan#in* don3t dela- #losin*+ or add #onditions" Guarantees2 Private (:uit- 1unds2 even FCA needs to sue t$e ,u-er and 6ins+ t$ese t$ree %arties 6ill %a- t$e ,u-er3s o,li*ation" 'i/its2 a/ount t$e- o6e ,e /ore t$an H $undred /illion Covenant %" H. o Parent use reasona,le ,est e00orts to arran*e de,t 0inan#in*" o SunGuard a#:uisition2 li/ited *uarantee o0 t$at size2 last /inute SunGuard as ed 0or le*al o%inions" @e #an deliver t$e/ ,ut not in t$e neDt 2E $ours" o ?er/ s$eets turned into de0inite a*ree/ents2 do#u/ents reasona,le to t$e ,an s o ?a e en0or#e/ent a#tion2 sue t$eir ,an s" o Closin*2 re*ular 0inan#in* is not availa,le+ -ou FAR( to use t$e ,rid*eO 8an s ne*otiate 0or t$e/selves2 /ar etin* %eriod2 a/%le ti/e to sell t$e de,t" Can3t to t$at until t$e deal is al/ost #losed+ %rovided 6it$ additional 0inan#in* in0o2 does not start until all t$ese #onditions are satis0ied" ++8 Ter#ination rovisions

@$at is a ter/ination event @$o $as t$e ri*$t Result2 0ee %a-a,le+ st$*" else tri**eredB 1"- Mutua" consent2 ,ot$ %arties a*ree" U)"1 A2 2"- (ro$-dead date U)"1<,=<i= (00e#tive ?i/e s$all not $ave o##urred ,e0ore De#e/,er 1)7eit$er %art- $as ri*$t to unilaterall- 6al a6a-" Onl- eDer#ise t$ese i0 0ailure is not #aused ,- ,rea#$ o0 a*ree/ent" <at 0ault in *ettin* re*ulator- a*ree/ents= Goin* %rivate2 no re*ulator- situations <nor/al in strate*i# transa#tion= Ca%ital Calls2 %arent ,a# ed u% ,- KKR and 8ain2 t$e- also don3t $ave /one-+ t$e- $ave ri*$t to send a letter to investors 6$o $ave #o//itted ;2 KCa%ital Call 'etter to investorsL 8an s2 #o//it/ent e#ono/i# #onditions toda-2 interest rates2 not 6illin* to #o//it o%enl- 0or /ore t$an M /ont$s" (asiest ind o0 %roD- state/ent to ri*$t and *et a%%roved ,- S(C 8u-ers ,a# door 6a- out o0 a transa#tion2 Re/ed-2 seller done ever-t$in* it $ad to do2 still rea#$ dro% dead date2 %arent %a-sO C"- 'ega" ro&i!ition2 ne6 la6O eit$er %art- #an ter/inate2 <inIun#tions or order o0 t$e #ourt= re*ulator- re0or/s #onte/%lated" Ris 0alls on ,ot$ %arties" E"- arent )reac&es )"1"#"1 8rea#$ o0 re%s and 6arranties+ o0 Parent or #ovenants not satis0ied+ #losin* #onditions not satis0ied2 ri*$t to ter/inate 0 t$e ,rea#$ #annot ,e #ured ,- t$e dro% date date" o 8u-er2 #o/%lied all #ovenants in all /aterial res%e#ts o Pri/ar- o,li*ation2 *et 0inan#in* <,est e00orts=+ s$o6 u% at #losin* and #lose o As lon* as t$e #o/%an- is not in ,rea#$ o0 t$e a*ree/ent" o Gets ter/ination 0ees H"- )uyer does not s&ow u$2 Parent %a- reverse ter/ination 0ee" M"- 9CA stock&o"ders vote down2 Na ed no vote" (D%enses *et %aid" Cannot $ave 0ull ter/inated 0ee2 #oer#ive 0or SF 0or eDer#isin* t$eir 0idu#iar- ri*$ts" 8e0ore SF vote2 a ,ona 0ide 6ritten #o/%an- a#:uisition %ro%osal ,e#o/es %u,li#2 ,etter o00er2 at t$at %oint it is 0air to assu/e t$at i0 SF turn it do6n2 ,e#ause KKR deal attra#ted a $i*$er ,idG AND 6it$in 2C /ont$s a0ter ter/ination enters into a de0initive a*ree/ent

FCA %a-in* a ter/ination 0ee i0 Sto# $olders *et a ,etter deal+ $a%%- to %aadditional 0ee <i0 not na ed vote2 onl- eD%enses= ."- Fiduciary out2 su%erior %ro%osal2 FCA %a-s ter/ination 1ee" Ne6 8u-er 6ill ,e %a-in* t$is 0ee2 rei/,urse #o/%an-+ lend ;" J"- Re#o//endation @it$dra6al2 O,li*ate a #o/%an- to sa- under t$e Mer*er A*ree/ent2 I a*ree t$at I 6ill not #$an*e /- re#o//endation <-ears a*o= @eren3t allo6ed to #$an*e -our /ind" Courts 8OD #annot tie its $ands" It CAN #$an*e its re#o//endation" Dut- o0 #andor to #$an*e t$at re#o//endation" I0 -ou do so+ ter/ination 0ee" Onl- ,u-er #an ter/inate" Na ed no vote2 onl- eD%enses+ so *reat ris to *o 0or6ard i0 8OD 6it$ra6s its re#o//endation" )" FCA 8rea#$es2 Parent ri*$t to ter/inate2 eD%enses+ %lus ter/ination 0ee" Onl- i0 %ro%osal out t$ere and 12 /ont$s $ave deal or de0initive a*ree/ent" a" Mirror2 #lose a loo%$ole2 ,u-er a0raid+ a#:uisition %ro%osal2 tar*et is *oin* to so st$*" t$at 6ill /a e t$e ,u-er 6ant to *et our o0 t$e deal" 10 8u-er 6ill0ull- ,rea#$es <)"C= $o6ever t$e Parent #an still sue 0or da/a*es" Converse not true2 i0 %arent 6ill0ull- ,rea#$es t$e #o/%an- does not $ave ri*$t to *et an-t$in* in eD#ess o0 its ter/ination 0ee" 200.2 #risis2 lenders t$at s%urred t$e #$an*e2 '8O 118; Fo/e De%ot su%%l-' ,an s t$at $ad %ro/ised to /a e loans2 0i*ured out t$at t$e ter/s on 6$i#$ %ro/ised to lend ,e#a/e une#ono/i#" 'oss 2".8; 8rea u% 0ee CH0M; %ressure on ,u-ers to rene*otiate deals" 10"112 '8o @anted #o/%ete strate*i# ,u-ers2 a*ree not to $ave 0inan#in* #ondition2 s$ell #o/%an- i0 0or so/e reason Mis#elanous2 s 10"22 none o0 t$e re%+ 6arranties+ #ov and a*ree/ents s$all survive t$e e00e#tive ti/e2 no inde/ni0i#ation2 no one #an sue %ost #losin*" <t$is is avera*e in %u,li# #o/%anies+ not in %rivate= S10"J2 no t$ird %arties ,ene0i#iaries2 even t$ere is a %rovision t$at a0ter t$e /er*er t$e ne6 o6ners 6ill #ontinue to $onor e/%lo-/ent #ontra#ts+ FCA $ave no ri*$t to a#tuall- sue to en0or#e t$at" SF FCA $ave no ri*$t to ,rin* suit" Measure da/a*es2 da/a*e to #or%oration+ not SF sto# %ri#es N& la6G Dela6are2 start its da/a*e anal-sis 0ro/ t$e o00er %ri#e and t$e sto# %ri#e" (D%e#tation2 dealin* 6it$ t$is la6+ -ou don t need to sa- an-t$in* s%e#i0i#" 8u-ers2 and Sellers2 /otivations2 III% ,ene0i#iar- ri*$ts s$ould eDist 6it$ res%e#t to t$e #onsideration t$at t$e- are due" In a tender o00er -ou $ave a dire#t #ontra#t+ in a /er*er a*ree/ent so/eone is %ro/isin* to %a-"

S 10"1C2 +nde#ni*ication Seller2 %rivate %art-2 o ?ar*et is o6ned , an individual s/all *rou% o0 individual Pu,li# #o" sellin* su,sidiar-2 a#ts as sole sto# $older <eD#e%tion2 lar*e sto# $older JHQ #ant *o a0ter t$e ot$er 1H+ loo in* it as a %rivate transa#tion not a %u,li# one= No auto/ati# ri*$t2 ne*otiation" 'o6es %ur#$ase %ri#e2 no inde/ni0i#ation Most o0 ti/es2 so/e inde/nit@$at is #overedB inde/ni0ied onl- 0or %ro,le/s t$at a/ount to a ,rea#$ o0 a re%resentation and 6arranties" 8ene0it o0 dis#losure S#$edules and :uali0i#ations o0 re%" In$eritin* lia,ilities t$at -ou did not a*ree to %ur#$ase" Dedu#ti,le-8as et2 %ur#$ase %ri#e 100M2 inde/ni0i#ation i0 -our da/a*es eD#eeds HM" Dis#oura*e ,u-er 0ro/ tr-in* to 0ind lots o0 little %ro,le/s" 8u-er2 assu/e t$at i0 t$ere is a HM dedu#ti,le2 -ou 6ill ,e res%onsi,le 0or %ur#$ase %ri#e 9 t$at /ini/u/

/a e sure in #redit a*ree/ents t$at -ou are #overed" Get 0inan#in* 0or 10HM;

Dedu#ti,le2 ;1 eD#ess o0 HM BBBBBB 8as et2 HM and 1 dollar" Get all o0 it Surviva" $eriod <identi0- %ro,le/s and ,rin* #lai/s= ne*otiation2 C -ears sou*$t ,- ,u-ers vs" seller 0e6 /ont$s a0ter 0irst audit &ou #an2 s$ouldn3tO ,e #are0ul 6it$ taDesO ?aDes environ/ental or ot$ers is to t$e statute o0 li/itations" A/ount %er #lai/2 a**re*ation a/ount2 /ini/u/ ,e0ore it starts to #ount7,e as lo6 as %ossi,leO Care0ulO Seller2 noO it s$ould onl- ,e ,i* issues to *et to t$e dedu#ti,leO

Class RII 8usted Deals Si*ned u% #an3t>don3t *et #o/%leted 1. 8u-er re/orse2 reason not relatin* to 0inan#in*2 s, reasons2 6orld $as #$an*ed t$an /a es ,u-er not 6ant to *o 0or6ard 6it$ t$e deal+ tar*et3s 0ortune su00ered s%e#i0i# adverse event <eD2 A&A deal to ,u- Guidant+ !S *overn/ent 0or#e Guidant to issue a re#all on $eart stents illed deal= 2" 8u-er does not *et 0inan#in* <not a,le or not 6antin*= C" ?$ird %art-2 o00ers /ore /one- to t$e tar*et t$an t$e ori*inal ,u-er is o00erin*2 SF don3t a%%rove <Naked no vote= + or tar*et 8OD ta es o%tion $i*$er o00er <Fiduciary out="

:8- MAT-R+A' A(5-RS- -FF-CT ;MA--MAC< !uyers re#orse2 de0inition /aterial adverse e00e#t+ ot$er re%resentations and 6arranties2 no undis#losed lia,ilit-+ #losin* #onditions" a" ?ar*et tries to li/it ran*e #ir#u/stan#es to li/it MA(" i" Carve out /aterial adverse e00e#t2 #$an*e in t$e e#ono/*enerall-+ or industr- in 6$i#$ tar*et o%erates+ as lon* as t$e i/%a#t on it 6as not dis%ro%ortionatel- 6orse t$an on ot$er in sa/e industr-" ," (as- in strate*i# deals+ not on #as$ levera*e ,u--outs" #" Carve out2 $o6 to ar*ue 0or it2 te/%orar-+ a00e#ts to all industr-" Strate*i# ,u-er alread- eD%osed to t$e industr-2 strate*i# de#ision to invest in t$is industr- an-6a-" De0inition o0 MA( 4Material Adverse (00e#t5 KI8P v ?-sonLis a leadin* #ase inter%retin* Material Adverse (00e#t" A0ter si*nin* a /er*er a*ree/ent to a#:uire I8P 0or a%%roDi/atel- ;1"M ,illion on Aanuar- 1+ 2001+ ?-son asserted several /ont$s later t$at I8P3s de#line in %er0or/an#e <0or eDa/%le+ durin* t$e 0irst :uarter o0 2001 I8P earned onl- ;0"1) %er s$are versus %roIe#ted annual earnin*s o0 ;1")C %er s$are 0or 1& 2001 and MEQ ,e$ind t$e #o/%ara,le :uarter in 2000= and a ;M0"E /illion i/%air/ent #$ar*e+ arisin* 0ro/ i/%ro%er a##ountin* %ra#ti#es at one o0 I8P3s su,sidiaries+ ea#$ #onstituted a 4Material Adverse (00e#t" %er0or/ed 6orse t$an t$e %roIe#tions2 not 6orse t$an t$eir %ast %er0or/an#e2 ?-son strate*i#2 no6 industr- $as #-#li#al u%s and do6ns
4Mer*er #ontra#ts are $eavil- ne*otiated and #over a lar*e nu/,er o0 s%e#i0i# ris s eD%li#itl-" As a result+ even where a Material Adverse Effect condition is as broadly written as the one in the Merger Agreement, that provision is best read as a backstop protecting the acquiror from the occurrence of unknown events that substantially threaten the overall earnings potential of the target in a durationally significant manner. A s$ort-ter/ $i##u% in earnin*s s$ould not su00i#eG rat$er t$e Material Adverse (00e#t s$ould ,e /aterial 6$en vie6ed 0ro/ t$e lon*er-ter/ %ers%e#tive o0 a reasona,le a#:uiror"5 <e/%$asis added=

?-son2 /oralit- tale2 ,ad *u-s" 8u-er3s re/orse+ loo in* 0or a %reteDt to *et out o0 t$e deal2 /a in* u% t$ese reasons+ $i*$ ,ar" 20002 $ei*$t o0 internet ,u,,le+ ,oo/ /&a a#tivit-2 all strate*i# <#ontra#t on #onteDt in 6$i#$ t$e %arties 6ere #ontra#tin* + sa/e 0or Iud*es= 6as not i/a*inin* '8O KFinis& 'ineL ?ennessee2 dis%ro%ortionatel- 6orse t$an %eers is not in an o0 itsel0 enou*$ to satis0MA("

Ordered t$e/ to #o/%lete t$e ter/s o0 irs /er*er 6it$ Genes#o C$an#ellor '-leSs MAC dis#ussion is a ,it ,a# 6ard" S$e 0irst 0inds t$at t$ere is no MAC ,e#ause t$e MAC eD#lusion 0or *eneral e#ono/i# #onditions a%%lies" Fere+ t$e #ourt relies u%on Genes#oSs eD%ert testi/on- t$at $i*$ *as+ $eatin*+ oil and 0ood %ri#es+ $ousin* and /ort*a*e issues+ and in#reased #onsu/er de,t loads 6ere *enerall- res%onsi,le 0or Genes#oSs #ondition" C$an#ellor '-le even i# s in !8SSs o6n re#ent 6rite-do6n to su%%ort t$is 0indin*" ?$is is t$e %ri/ar- ,asis 0or $er o%inion t$at no MAC o##urred+ ,ut C$an#elllor '-le also relies to a lesser eDtent on t$e industr- eD#lusion in t$e MAC de0inition" S$e also 0inds t$at Genes#oSs de#line 6as not dis%ro%ortionate to ot$ers in t$e industr- and t$ere0ore no MAC o##urred" Fere+ s$e relies solel- on ?ennessee %rin#i%les o0 e:uit- to /a e t$is deter/ination and does not #ite t$e /er*er a*ree/ent #lause re:uirin* s%e#i0i# %er0or/an#e" Moreover+ 0or e:uit- to order s%e#i0i# %er0or/an#e t$ere /ust ,e no ot$er ade:uate re/ed-" !nli e Ri#e C$an#ellor Strine in I8P+ s$e relies on t$e *eneral $ar/ to Genes#o due to t$e dela- o0 t$e /er*er rat$er t$an t$e ulti/ate di00i#ult- in deter/inin* da/a*es <Strine relied on t$e latter=" IS/ not so sure a,out $er 0indin* -- t$e $ar/ s$e #ites loo s to /e to ,e /onetar- $ar/

2"- )UY-R CAN=T 3-T F+NANCK!nited Rentals #aseL ?$e Co/%an- noted t$at Cer,erus $as s%e#i0i#all- #on0ir/ed t$at t$ere $as not ,een a /aterial adverse #$an*e at !nited Rentals" !nited Rentals vie6s t$is re%udiation ,Cer,erus as un6arranted and in#o/%ati,le 6it$ t$e #ovenants o0 t$e /er*er a*ree/ent" Favin* 0ul0illed all t$e #losin* #onditions under t$e /er*er a*ree/ent+ !nited Rentals is %re%ared to #o/%lete t$e transa#tion %ro/%tl-" ?$e Co/%an- also %ointed out t$at Cer,erus $as re#eived ,indin* #o//it/ent letters 0ro/ its ,an s to %rovide 0inan#in* 0or t$e transa#tion t$rou*$ re:uired ,rid*e 0a#ilities" ?$e Co/%an- #urrentl- ,elieves t$at Cer,erus3 ,an s stand read- to 0ul0ill t$eir #ontra#tual o,li*ations !nited Rentals -esterda- 0iled suit a*ainst t$e Cer,erus a#:uisition ve$i#les+ RAM Foldin*s+ In#" and RAM A#:uisition Cor%" <0or ease o0 re0eren#e I 6ill re0er to t$e/ as Cer,erus=" ?$e #o/%laint is a,out as strai*$t-0or6ard as t$e- *et" !nited Rentals sole #lai/ is t$at Se#tion )"10 o0 t$e /er*er a*ree/ent re:uires s%e#i0i# %er0or/an#e o0 Cer,erusSs o,li*ations" Se#tion )"10 o0 t$e !nited Rentals>Cer,erus #erger agree#ent states2

?$e %arties a*ree t$at irre%ara,le da/a*e 6ould o##ur in t$e event t$at an- o0 t$e %rovisions o0 t$is A*ree/ent 6ere not %er0or/ed in a##ordan#e 6it$ t$eir s%e#i0i# ter/s or 6ere ot$er6ise ,rea#$ed" A##ordin*l- " " " " <,= t$e Co/%an- s$all ,e entitled to see an inIun#tion or inIun#tions to %revent ,rea#$es o0 t$is A*ree/ent ,- Parent or Mer*er Su, or to en0or#e s%e#i0i#all- t$e ter/s and %rovisions o0 t$is A*ree/ent and t$e Guarantee to %revent ,rea#$es o0 or en0or#e #o/%lian#e 6it$ t$ose #ovenants o0 Parent or Mer*er Su, t$at re:uire Parent or Mer*er Su, to <i= use its reasona,le ,est e00orts to o,tain t$e 1inan#in* and satis0- t$e #onditions to #losin* set 0ort$ in Se#tion ."1 and Se#tion ."C+ in#ludin* t$e #ovenants set 0ort$ in Se#tion M"J and Se#tion M"10 and <ii= #onsu//ate t$e transa#tions #onte/%lated ,- t$is A*ree/ent+ i0 in t$e #ase o0 t$is #lause <ii=+ t$e 1inan#in* <or Alternative 1inan#in* o,tained in a##ordan#e 6it$ Se#tion M"10<,== is availa,le to ,e dra6n do6n ,- Parent %ursuant to t$e ter/s o0 t$e a%%li#a,le a*ree/ents ,ut is not so dra6n do6n solel- as a result o0 Parent or Mer*er Su, re0usin* to do so in ,rea#$ o0 t$is A*ree/ent" T&e $rovisions o* t&is Section >8:? s&a"" !e su!@ect in a"" res$ects to Section A8B;e< &ereo*+ 6$i#$ Se#tion s$all *overn t$e ri*$ts and o,li*ations o0 t$e %arties $ereto <and o0 t$e Guarantor+ t$e Parent Related Parties+ and t$e Co/%an- Related Parties= under t$e #ir#u/stan#es %rovided t$erein" !nited Rentals /ust still *et around Section A8B;e< o0 t$e /er*er a*ree/ent 6$i#$ %ur%orts to tru/% t$is %rovision and li/it Cer,erusSs a**re*ate lia,ilit- to no /ore t$an ;100+000+000" ?$is #lause states2 <e= Not6it$standin* an-t$in* to t$e #ontrar- in t$is A*ree/ent+ in#ludin* 6it$ res%e#t to Se#tions ."E and )"10+ <i= t$e Co/%an-3s ri*$t to ter/inate t$is A*ree/ent in #o/%lian#e 6it$ t$e %rovisions o0 Se#tions J"1<d=<i= and <ii= and its ri*$t to re#eive t$e Parent ?er/ination 1ee %ursuant to Se#tion J"2<#= or t$e *uarantee t$ereo0 %ursuant to t$e Guarantee+ and <ii= Parent3s ri*$t to ter/inate t$is A*ree/ent %ursuant to Se#tion J"1<e=<i= and <ii= and its ri*$t to re#eive t$e Co/%an- ?er/ination 1ee %ursuant to Se#tion J"2<,= s$all+ in ea#$ #ase+ ,e t$e sole and eD#lusive re/ed-+ in#ludin* on a##ount o0 %unitive da/a*es+ Cer,erus is #o/%letel- di00erent" No6$ere is Cer,erus #lai/in* a /aterial adverse #$an*e" Cer,erus is strai*$t out statin* t$e- are eDer#isin* t$eir o%tion to %a- t$e reverse ter/ination 0ee+ ,rea in* t$eir #ontra#tual #o//it/ent and re%udiatin* t$eir a*ree/ent" Cer,erus $as de#ided t$at t$e re%utational i/%a#t o0 t$eir a#tions is over#o/e in t$is instan#e ,- t$e e#ono/i#s" And t$is is no6 t$e se#ond deal+ a0ter A00iliated Co/%uter Servi#es+ t$at Cer,erus $as 6al ed on in t$e %ast /ont$" ?$e do* not onl- ,ites+ it ,ites $ard" An- tar*et dealin* 6it$ t$e/ in t$e 0uture 6ould no6 ,e irres%onsi,le to a*ree to a reverse ter/ination %rovision" !nited RentalSs la6-ers did not ne*otiate a strai*$t reverse ter/ination 0ee" Instead+ and unli e in Far/an 0or eDa/%le+ t$ere is a s%e#i0i# %er0or/an#e #lause in t$e /er*er a*ree/ent"

Pro0essor Farvard 'a6 S#$ool P 1C-22 develo%/ent 0or+ and reasons 0or 0inan#in* stru#ture t$at -ou #an see FCA #ase2 industr- standard" '8O2 0ir/s ,u- t$rou*$ s$ell entities+ 6it$ no assets2 tar*ets 6anted to i/%ose /ore lia,ilities2 o 2 ,ut li/ited2 s%onsorin* 0unds P212 reverse ter/ination 0ee Not t$ou*$t t$rou*$2 ne6 deal te#$nolo*-2 ,rid*in* inse#urit- ,- tar*et+ ,u-er 0ear *ive so/e se#urit-2 a= %rovide 0or a reverse ter/ination 0ee2 ,u-er /ust %a-7 ,= %ut a lia,ilit- li/itation2 0or#es tar*et to sue 0or ,rea#$""i0 su##ess0ul #a%" Created li/it 0or ,ot$ intentional and unintentional lia,ilities" !RI <united rental=

o%en :2 6$at 6ould a #ourt doB I0 ,u-er tries to *et its 0inan#in* ,ut #ant+ %areverse 0ee 9lia,ilities 0or all ,rea#$es li/ited to t$at a/ount" @$at i0 it does not 6ant to *et 0inan#e" Onl- 100/ Re%resented a ,u-er2 tell t$e/ -ou %ro,a,l- #ould 6al a6a- 0or Iust 100M+ I don3t 6ant to ,e t$e 0irst %rivate e:uit- 0ir/ to test it" !se ,est e00orts2 %a- ,rea -u% 0ee 9,urden o0 %roo0" o Cir#u/stan#es under 6$i#$ t$e ,u-er #an *et out o0 t$e deal+ %a-in* s%e#i0i# %a- out 0ee" o Ot$er2 ,rea#$ #ovenants reasona,le ,est e00orts2 sue 0or s%e#i0i# %er0or/an#e" A##iVn2 o6ned ,- A%ollo2 strate*i# and 0inan#ial deal2 Fusd/an sue to 0or#e A##iVn to #lose2 A ,rea#$ed its o,li*ation use ,est e00orts to *et deal done" Re%ortin* 8ene0i#ial O6ners$i% 1" Re*istration Rule 1)CC A#t <Se#urities A#t= i/%a#t #ir#u/stan#e in 6$i#$ ,u-er issuin* o6n se#urities to /a e t$e a#:uisition2 o00erin* it to t$e tar*et SF ,u-er needs to re*ister it" Dis#losure a,out t$e issuin* #o/%an-+ ti/in* restri#tions" 2" ProD- Rules2 *overn2 6a- t$at #o/%anies #o//uni#ate 6it$ t$eir o6n sto# $olders+ Sto# $olders #o//uni#ate 6it$ ea#$ ot$er+ in relation to an ele#tion <vote on a /er*er+ ele#tion dire#tors= C" S 1C @illia/s A#t" Dis#losures t$at an investors needs to /a e i0 a#:uires #ertain Q o0 tar*et #o/%anies3 sto# E" S 1E @illia/s A#t+ Se#urities (D#$an*e A#t 1)CE" ?ender O00er rules" Prevent S$ 0ro/ ,ein* ta en ,- sur%rise and ,ein* rus$ed into a%%rovin* or sellin* 6it$out ade:uate in0or/ation" Pro#ess and %ro#edure2 not su,stantive2 re:uire dis#losure+ ti/e %eriod2 don3t %ro$i,it an-,od- 0ro/ doin* an-t$in*" S :Cd HQ or /ore o0 t$e e:uit- <NO? D(8?= o0 a #o/%an- under CE A#t <traded on N&S( or NASDAP= $as to dis#lose to t$e / t o0 t$e a#:uisition" 1C 0 institutional invest/ent /aan*ers to re%ort on a :uarterl- ,asis a##ounts valued over 100M2 /utual 0unds2 on t$e a**re*ate 6it$in 10 #alendar da-s o0 $avin* #rossed t$e HQ t$res$old" Durin* t$at %eriod -ou #an #ontinue ,u-in*" Noti0- /ar et %ro/%tl- 6$en -ou in#rease or de#rease 1Q or /ore" In %ra#ti#e+ neDt ,usiness da-" 1ds0

:D g institutional investors

Passive Investor Si/%ler 0or/+ sa/e 10 da-s" C$an*e invest/ent intent2 s6it#$ and 0ile a re*ular s 1C d" 8ene0i#ial o6ners$i%2 4Fave+ s$are dire#t ir indire#t %o6er to vote+ sell or deter/ine t$e dis%osition o0 t$at se#urit-5" Ri*$t to a#:uire 6it$in M0 da-s" Sto# o%tion #urrentl- eDer#isa,le+ dee/ed to ,ene0i#iall- o6n t$e #o/%an-" <un#onditional ri*$t= 3rou$ urc&ases ?6o or /ore %ersona a*ree to a#t to*et$er to a#:uire $old+ vote or dis%ose o0 se#urities" <1C d-H= Me/,ers #onsidered to o6n all o0 t$e s$ares" SC9-(U'- :C ( SF to understand 6$o 6as /a in* a#:uisition2 identi0Sour#e o0 0undin* 0or t$e %ur#$ases Intention Plan2 /er*er+ li:uidation+ #or%orate transa#tions2 #a%italization 1C * <%assive investors=

A#tivist Sto# $olders2 $ed*e 0unds2 ta e a sta e+ /eanin*0ul ,ut not #ontrollin*2 use it to *et t$e #o/%an- to #$an*e in so/e 6a-2 sell itsel02 levera*e re#a%italization2 #$an*e in 8OD+ 0or#in* *overnan#e re0or/s tr- to 6or to*et$er+ 0or/all- or in0or/all-2 eD%ose 6$o else is 6or in* 6it$ a#tivist2 ICON" @e are not a#tin* as a *rou%+ 6e are a#tin* in %arallel"

Class RIII Federa" Securities 'aws Prior ado%tion @illia/s A#t0ar 6est in ?O No re:uire/ent to %u,li#l- dis#lose o6ners$i% o0 s$ares 1)MJ2 HQ dis#losure" 1C-d2 / t *ets alerted e:uit- se#urit-2 (uro%ean Iurisdi#tion CQ" 1C e2 %ur#$asers ,- issuer o0 its o6n s$ares2 1C 02 institutional investor /ana*ers ;100 /illion EH da-s a0ter t$e end o0 ea#$ #alendar :uarter"

1C *Passive investors 1C d<C= de0inition ,ene0itial o6ners$i%2 a*ree to a#t to*et$er2 *rou%2 0ile 1C d 1C d 6indo62 ten 10 ti/e 0ra/e 6$en -ou #ross t$e 1C d t$res$old2 #ontinue to ,us$ares durin* t$at %eriod2 a/end/ents to 1C d $ave to ,e u%dated %ro/%tl-" Contents2 6$at -our invest/ent IN?(N? is2 %ur%osed o0 t$e transa#tion KNACCO Industries, Inc. v. ApplicaL deals 6it$ over,iddersG u%$olds t$e tar*ets #o//on la6 0raud #lai/s vs t$e $ed*e 0und" Interested in a#:uirin* Na#o" F ta es a lon* ti/e to a/end 1Cd dis#losure+ sa-in* t$at it is interested in a#:uirin*" 46$en -ou #$an*e -our invest/ent intent /a e dis#losure

A re#ent Dela6are C$an#er- Court de#ision raises t$e sta es 0or 0ault- #o/%lian#e 6it$ Se#tion 1C<d= 0ilin*s+ $oldin* t$at a Iilted /er*er %artner in a deal-Iu/% situation /a- %ro#eed 6it$ a #o//on la6 0raud #lai/ 0or da/a*es a*ainst t$e to%%in* ,idder ,ased on its /isleadin* S#$edule 1CD dis#losures" ?$e de#ision+ 6$i#$ $olds t$at NACCO Industries /a- %ro#eed 6it$ nu/erous #lai/s arisin* out o0 its 0ailed 200M /er*er 6it$ A%%li#a In#or%orated+ also serves as a #autionar- re/inder to ,ot$ ,u-ers and sellers t$at 0ailure to #o/%l- 6it$ a Wnos$o%W %rovision in a /er*er a*ree/ent not onl- eD%oses t$e tar*et to da/a*es 0or ,rea#$ o0 #ontra#t+ ,ut in #ertain #ir#u/stan#es #an also o%en t$e to%%in* ,idder to #lai/s o0 tortious inter0eren#e Re#e#!erE you on"y get t&e !ene*it o* t&e ter#ination *ee i* you ter#inate in accordance wit& t&e ter#s o* t&e agree#ent8 $ard to ,rin*2 -ou don3t no67 KSe# v 1irst Cit-L2 %ar in* s$ares+ le0t s$ares on t$eir ,e$al0+ did not *et around dis#losure re:uire/ents" Fard to sue a lar*e SF2 ta#ti#al /atter+ it /a- ,e di00i#ult to %revail 1leDi,ilit- to ta e a#tions ,e0ore /a in* a ne6 0ilin*" I1 it is not #lear i"e" su**estin* dire#tors+ out o0 line2 eD%ensive 6ordin* to *ain 0leDi,ilit-"

Tender o**ers
Never de0ined ,- S(C" :F-d S-A <Se#urities (D#$an*e A#t= online2 S(A dis#losure i/%ortant in0o see in* /ore t$an HQ dire#t %ur#$ase or ?O+ e00ort *ain #ontrol o0 t$e #o/%an-" As 6it$ %roD- rules+ allo6s t$e/ to /a e in0or/ed de#isions" ?O re*ulation2 driven ,- dis#losure+ su,stantive i/%a#ts on ta#ti#s and strate*ies on $o6 to deal 6it$ ?O

Don t need to $ave 0inan#in*2 -ou need to dis#lose it 1E <d= 0raudulent %ra#ti#es in #onne#tion 6 ?O" (:uit- se#urities 1E <e= deals 6it$ an- ?O2 0or de,t se#uritiesOOO 1E <0= a#:uire /aIorit- #ontrol o0 8OD BBBB Mer*er vs" ?ender O00er a" Mer*er i" #o/%l- state la6 9 0ederal se#urities re:uire/ent ii" need 8OD a%%roval <re#o//endation= iii. $old a SF /eetin* need a%%roval ,- /aIorit- outstandin* S$ares iv" need 0ile ProD- state/ent 6it$ S(C <#$an*e o0 #ontrol transa#tion revie6ed ,- S(C and t$at re:uires C0 da- 6aitin* %eriod= v" ta es ti/e to %re%are all t$ese do#u/ents" vi" /ini/u/ E /ont$s+ avera*e %eriod E-M /ont$s ," ?ender O00er i" S(C does not #lear /aterials+ /a e #o//ents+ laun#$ -our ?O 6it$out S(C ,lessin*" ii" ?O 20 ,usiness da-s 0or it to re/ain o%en in #ase o0 a 0riendl- deal #" (D#$an*e O00er <%art o0 /er*er= a#:uire s$ares o0 tar*et 6it$ s$ares and #as$" i" O00er s$ares CC A#t2 need to 0ile %ros%e#tus and re*istration state/ent %er0e#ted ,e0ore #o/%letin* o00er" ii" ?"O"2 a#:uire tar*et #o/%an- s$ares 0or #as$ onl-O

No distin#tion $ostile-0riendl- in t$e rules2 1riendl?"O" dire#tl- to SF+ no need 0or a##e%tan#e 8OD

(raw!acks )0Q s$ort 0or/ /er*er in Dela6are2 %arent #o/%an- to #as$ out t$e re/ainin* s$ares" '8O ,u-er2 /er*er transa#tions not ?O+ need 100Q 0or t$e #ollateral 0or t$e ,an " S(C2 0leDi,ilit- in t$eir re*ulation O%en / t %ur#$asers and %rivatel- ne*otiated transa#tions /a- ,e dee/ed to ,e ?"O" Courts 2 tests (i*$t 0a#tor test" K@ell/anL ?otalit- o0 #ir#u/stan#es KFanson ?rustL KFanson ?rustL Start 6it$ t$e J 0a#tor test 2 no sin*le 0a#tor is dis%ositive M o0 t$e J *ood enou*$+ don3t need all J 0a#tors 'i eli$ood o0 ,ein* 0ound as a ?O o in0o into t$e /ar et %la#e SF o%%ortunit- to /a e in0or/ed de#isions" o ?O2 o%en 20 da-s+ ti/e+ re:uires ,idder dis#losures a,out t$e o00er" o 'oo s at t$e totalit- o0 #ir#u/stan#es" ?$en turn to t$e ?otalit- o0 #ir#u/stan#es test2 %ur%ose o0 t$e @illia/s A#t is2 outside t$e @ A#t+ ris t$at /ost %eo%le la# in0o to /a e an in*or#ed decision" Goin* 0or 100Q sto# is *oin* to ,e a tender o00er" Si*ni0i#ant enou*$ %osition t$at S(C ot$er 6orried and tr- to ar*ue t$at it is a ?O" ?O2

Ad in ne6s%a%er @$ere to *et 0or/+ et# S(C Rule2 1201 da- -ou 0irst %u,lis$ it" 1E d 2 6$at rules <old rules2 6it$in H da-s intent /a in* announ#e/ent7don t do it on t$eHt$ da-+ dee/ed to $ave laun#$ed it t$e 0irst da-= no statutor- ter/ toda%re #o//uni#ation2 S#$edule ?O2 %re #o//en#e/ent #o//uni#ation2 not te#$ni#all- a ?O+ t$is is our #o//uni#ation Sa0e $ar,our an-t$in* 6ritten needs to ,e 0iled+ 6e,site %ostin*s e/ails7not oral #o//uni#ations" De#lared e00e#tive ,e0ore #losin* i0 it is an eD#$an*e o00er" (:ual 0ootin* to ?O Se#urities A#t re*ister transa#tions in s$ares" (D#$an*e less 0re:uent+ stru#ture it as /er*ers+ i0 t$e- do7,etter 6it$ earl#o//en#e/ent" 1E d C a2 a#tuall- do 6$en -ou #o//en#e t$e o00er2 0ile S(C+ deliver #o%ues+ et#7 1E d C ,2 a/end/ents to ?O" Material in0o t$at #$an*es in t$e ori*inall- 0iled do#u/ent2 %ro/%tl- a/end it" Farts-S#ott #learan#e+ 0ile it <C0 da-s= 1inal a/end/ent a0ter #o/%leted+ 0ile t$at2 $o6 /an- s$ares did -ou *et in t$e o00er" Se#urities la6s2 *et SF list+ as #o/%an- to /ails t$e /aterials 0or -ou" Rule 1E-d-H" <state la6 re:uest+ 220 Dela6are= As t$e/ to /a e de#ision"

 de#ide 6$et$er to as tar*et #o to disse/inate t$e/ or to *ive -ou t$e list" A/end/ents 6ill 0ollo6 t$e sa/e %ro#edure" 1E e 12 o%en 0or at least 20 ,usiness da-s /andator- eDtensions 10 da-s2 i0 #$an*e Q sou*$t+ #onsideration %aid+ et#" <i0 a/end/ent on t$e 10t$ date+ o%en until t$e 20t$ date+ ,ut i0 done on 12 t$ date+ t$en o%en 0or 22 da-sO= $o6 to eDtend2 %ress release2 eD%irin* /ar#$ Jt$ H%/2 #o//uni#ate it on t$e neDt da-" 1E d H *ives aut$orit1E d . too t$at aut$orit-2 6$ile o00er o%en %eo%le $ave ri*$t to 6it$dra6 its s$ares" (D#e%tionG #o/%leted t$e o00er2 ee% it o%en 0or additional 20 da-s+ %eo%le 6$o didn3t tender $ave a,ilit- to tender2 ones alread- tendered #annot ,e 6it$rdra6n" Proration2 1E d102 o%en t% A'' SF <!ni#al as de0ensive /easure+ eD#lusive o00ers= (D#e%tion2 i0 it is ille*al to /a e t$e o00er -ou don t $ave to /a e it to all" <t-%e o0 #o/%an-= S 1E d . ,est %ri#e rule <S(C Rule 1E d 10= S#$edule 1E d )2 Ite/ .2

1E e2 insider tradin*O ro/y Ru"es, S%e#i0i# as%e#ts o0 state la62 S$ a,ilit- to vote t$eir S$ in a #o/%an-" Dis#losure related Su,stantive rules2 @$at is a soli#itationB As in* so/eone to *ive -ou t$e ri*$t to vote s$ares+ or as t$e/ to vote t$e/selves 8road2 ProD- #ard2 le*al do#u/ent2 a%%ointin* /ana*e/ent to vote #ertain 6a-" ProD- #ontest2 -ou are $avin* 2 %arties2 /ana*e/ent on one side2 dissident 6ill ,e soli#itin*" !nder state la62 t$e later dated #ard is t$e ,indin* one" 1E a J SF %ro%osals2 /ini/ o6ners$i% re:uire/ent2 ri*$t to %ut %ro%osal into #o/%an- %roD- state/ent" At t$e #o/%anies eD%ense" ISS )o6ned ,- ISS= Glass 'e6is ProD- Governan#e Advisor- 0ir/s2 retain ,- institutions to re#o//end $o6 to vote t$eir s$aresB Re0er to t$e re#o//endations o0 t$ese advisor- servi#es" <not 0iled as %roD- /aterials=

Class IX ro/y So"icitation ProD- soli#itation2 SF *et to vote2 on Dire#tors" ProD- #ontest2 ele#tion #ontest 0or D2 M u% /ana*e/ent slate7ot$ers2 o6n D" O6n %roD- state/ent+ o6n %roD- #ard+ tr- to *et #ontrol o0 t$e #o/%an- ,- *ettin* #ontrol o0 t$e ,oard A#:uirin* #ontrol2 ,u-in* /aIorit- o0 its s$ares" O6ns s/all Q 6ants to run Dire#tors+ even i0 t$e- don t $ave /aIorit- o0 t$e e#ono/i#s" ro/y access, a##ess to t$e #o/%an- %roD- state/ent to ele#t dire#tors" 'ar*e enou*$ SF a,ilit- to %ro%ose u% to2HQ o0 t$e 8OD" 1irst #o/e 0irst serve ,asis <t$is /a- #$an*e=" Rule not -et in %la#e" Dela6are o6n rule2 -ou #an $ave %roD- a##ess %rovided 0or in -our #$arter or ,-la6s" I/%a#t #or%orate ele#tions" 8OD Sta**ered ,oards2 onl- 1>C o0 8OD u% 0or ele#tions ea#$ -ear" S$ort slate2 dissident $as its %roD- %ro%ose C D+ and ta e H o0 /ana*e/ent" Soli#it %eo%le2 0ile %roD- state/ent+ i0 not t$e issuer -ou #an soli#it u% to 10 %eo%le ,e0ore re:uired to 0ile a %roD- state/ent" risoner=s (i"e##a Mode" M t Pri#e2 ;H0 Raider2 ;M0 M0Q+ re/ainin* E0Q at ;C0 0or s:ueeze out /er*er" 4?$e $risonerGs di"e##a is a 0unda/ental %ro,le/ in *a/e t$eor- t$at de/onstrates 6$- t6o %eo%le /i*$t not #oo%erate even i0 it is in ,ot$ t$eir ,est interests to do so"5 (Der#ise2 ?ar*et Co/%an- Sto# tradin* at ;H0 in /ar et Raider announ#es ?"O to ,u- u% to M0Q o0 t$e tar*et3s outstandin* sto# at ;M0" I0 su##ess0ul it 6ill t$en en*a*e in a s:ueeze out /er*er 0or t$e re/ainin* E0Q at ;C0" 1+000 s$ares outstandin*" S$ould -ou tender -our s$aresB

Ot$er SF de#ision &our De#ision ?ender No ?ender ?ender ;EJ ;C0 No ?ender ;M0 ;H0

Possi,le Situations 1= (ver-one tenders2 -ou *et M0 dollars 0or M0Q o0 -our s$ares+ t$e rest at C0 dollars2 avera*e o0 FA do""ars %er s$are" 2= Onl- -ou tender2 -ou *et M0 dollars 0or all -our s$ares2 avera*e Do do""ars <,est situation+ not %ro,a,le t$at -ou 6ill ,e t$e onl- one to tender= C= &ou don3t tender2 &ou *et t$e s:ueeze out /er*er %ri#e2 C? do""ars avera*e" <@orst #ase s#enario= E= No one tenders2 -ou *et t$e /ar et %ri#e+ H? do""arsG -ou are neit$er 6orse nor ,etter o00" <Not %ro,a,le t$at no one tenders=" ?$is is eDa#tl- 6$- t$e %risoner dile//a is so 0a/ous" Sus%i#ion 6ill /a e so/e tender so/e re0rain+ instead o0 6or in* to*et$er+ and in t$e end -ou end u% 6orse o00" A#tin* alone+ -ou /i*$t #on#lude t$at tenderin* is -our ,etter o%tion" ?$e t$in* is t$at ot$ers 6ill t$in eDa#tl- li e -ou+ leavin* ever-,od- 6orse o00+ 6it$ an avera*e o0 ;EJ" ?$is s$o6s $o6 ?ender O00ers #an ne*ativel- a00e#t s$are$olders" 8e#ause o0 a,use o0 t$e stru#ture t$at led to #oer#ion to SF+ t$e ?O 6ere re*ulated ,- t$e @illia/s A#t" ?$e A#t *ives SF ti/e and in0or/ation to /a e an in0or/ed de#ision o0 6$et$er t$e- s$ould tender t$eir s$ares or a,stain" Fo6ever+ t$e A#t #annot /a e SF a#t in #on#ert+ or to ,e #oo%erative a/on* t$e/" Add to t$is s#enario t$e 0a#t t$at SF %ool is ,i* and dis%erse and -ou end u% 6it$ t$e %risoner dile//a"

--------------------------O#inicare <,i*= 6ants to ,u- ;C0 %>sG Nei*$,orCare s/aller 8AR2 ,est interest o0 t$e #o/%an-2 in#ludes ot$er #onstituen#ies+ li e SF" ?ar*et2 %aint t$e %i#ture in t$e ,est %ossi,le 6a-2 unso"icited <,etter ter/ t$an $ostileO= t$e- didn3t as us to /a e t$e %ro%osal" Don3t 6ant to use 4Fostile5 Conditionalit-2 - 1inan#in*2 o00erin* #as$ %eo%le 6ant to no6 t$at -ou $ave t$e /one-" - Re*ulator- A%%rovals2 Antitrust" - S$ares" Do t$e- $ave enou*$ s$ares2 *reater aut$orization2 still re:uires SF /eetin*" O#nicare (ocu#ents, ?$e Do#u/ents #o/%rise a series o0 letters t$at 6ere sent ,- O/ni#are3s C(O to Nei*$,orCare3s C(OG %ress releases /ade ,- t$ese #o/%aniesG ne6s" ?$e 0irst letter sent ,- O/ni#are is #onsidered a 4)ear &ug5 letter" <Mar#$ C0+ 200E2 = o Unso"icited letter 0ro/ a %ros%e#tive ,u-er to a tar*et #o/%an-Ss /ana*e/ent" <In our #ase it is dire#ted to Nei*$,or Care3s C(O2 %uts dire#t %ressure on $i/ eit$er to #onsider it and dis#uss it 6it$ t$e 8oard o0 Dire#tors K8ODL or disre*ard it and $ave 0idu#iar- duties tri**ered= Intended to %ressure tar*et /ana*e/ent ,- tri**erin* t$eir 0idu#iar- duties 'etter #an invite ne*otiations or /a e a detailed %ro%osal Ma- or /a- not ,e %u,li#l- dis#losed ,- ,idder2 - I0 %u,li#+ 0irst ste% in a $ostile ta eover - I0 %rivate+ tar*et #an /a e it %u,li# 0or ta#ti#al reasons o 1irst %ara*ra%$ <Y=2 ni#e *reetin* 6ords" Mentions t$e %ro%osal to #o/,ine ,ot$ #o/%anies" o Se#ond Y2 dis#loses O/ni#are intentions 6it$ re*ards to t$e #onsideration involved in t$e deal2 in t$is #ase2 #o/,ination #as$ and sto# " ?$e %ri#e is a %re/iu/ over t$e #losin* /ar et %ri#e" 'ast senten#e o%en t$e dialo*ue ,et6een t6o #o/%anies2 4o%en to dis#uss t$e 0or/ o0 t$e #onsideration or an- ot$er /atter relatin* to a %ro%osed #o/,ination5

o ?$ird Y2 re0ers to %revious #onversations $istor- around t$e ne*otiation t$at is ta in* %la#e" Mentions t$at it 6ould ,e a *ood o%%ortunit- 0or Nei*$,or #are SF to realize a su,stantial return on t$eir invest/ent" o 1ourt$ Y2 o,li*ator-2 6ooin* t$e ot$er C(O 6it$ #o/%li/ents a,out $is a##o/%los$/ents" o 1i0t$ Y2 6$-" Good 0or ,ot$ #o/%anies" 8ot$ 6ould ,e realizin* su,stantial ,ene0its" o SiDt$ Y2 (/%$asizin* seriousness o0 t$e letter2 #o//it/ent to t$e %ro%osal" Mentions t$at $ave alread- en*a*ed outside %ro0essionals and t$at re*ulator- a%%roval are 0easi,le" o Sevent$ Y2 Con0identialit-" Pro%osal su,Ie#t to 0urt$er due dili*en#e" Res%onse 'etter 0ro/ Nei*$,orCare KNCL <A%ril 20+ 200E= o Stron* letter2 reIe#tin* t$e %ro%osal" o Mentions t$at t$e 8OD $as revie6ed it" o A2 8OD unani/ous in t$in in* t$at it is O%%ortunisti# and not in t$e ,est interest o0 NC SF" o 8OD #on0ident in /ana*e/ent and ne6 %lan a0ter s%in-o00" o 'ast Y2 ind o0 t$reat2 #ounter%rodu#tive 0or ,ot$ #o/%anies" O/ni#are Goes Pu,li#2 %ress release in0or/in* t$e %u,li# o0 its letter t$at 6as sent to NC" o Y 22 /entions t$at t$e- are /a in* a .0Q %re/iu/ #as$ o00er to S$" Cas$ deals are 6ell re#eived *iven t$at t$e- %rovide 0or #ertaint- and are seen as stron* de%enda,le o00ers" Se#ond 'etter sent ,- O o Disa%%ointed t$at t$e 8OD reIe#ted t$e o00er" 1or t$is reason t$e- are *oin* %u,li# 6it$ t$e o00er" Stresses t$eir 6illin*ness to dis#uss #onsideration or an- ot$er related issue" o Mentions t$at t$e- $ave o,tained #o//it/ent 0ro/ di00erent ,an s <0inan#ial= and t$at t$ere are no 0urt$er a#tions at t$e #or%orate level to ,e ta en" O%en 0or dis#ussion" o Intention to 6or on an a*reed transa#tion+ no intention o0 ,ein* $ostile" Anot$er Press Release o NC #on0ir/s t$e re#e%tion o0 t$e letter" O00er is si/ilar to one alread#onsidered ,- t$e 8OD" o @ill revie6 t$is one+ #onsistentl- 6it$ t$eir 0idu#iar- duties" Mentions r$e en*a*e/ent o0 0inan#ial and le*al advisors on t$e %art o0 NC to assist t$e 8OD" Anot$er Press Release 0ro/ NC o NC reIe#ts unsoli#ited %ro%osal 0ro/ O

o 4,latantl- o%%ortunisti#5 Con0iden#e in t$eir #or%orate %lan and /ana*ers" Aust H /ont$s a0ter t$e s%in-o002 #on0ident t$is 6ill ,rin* ,ene0its" O tr-in* to de%rive t$eir SF o0 t$e u%side t$eir %lan 6ill %rovide t$e/ 6it$" Anot$er Press Release 0ro/ O o Insist t$at t$e- are disa%%ointed" o @ant to 6or a 0riendl- deal" O announ#es intent to #o//en#e ?ender O00er K?"OL to a#:uire NC o NC res%onds 6it$ a %ress release2 6ill revie6 <0idu#iar- dut-= <Aune 1E+200E= o !r*es SF not to tender ,e0ore t$e 8OD $as /ade a re#o//endation o 1inall- reIe#ts it2 inade:uate 0ro/ a 0inan#ial %oint o0 vie6" <O%inion 0ro/ t$eir 0inan#ial advisors sa-s so2 Gold/an Sa#$s=G un#ertain2 #onditioned as to 0inan#in* and re*ulator- /attersG 8OD intents to %rote#t t$e ,est interest o0 t$e #o and its #onstituents2 SF+ e+ #usto/ers+ and #o//unities in 6$i#$ it does ,usiness" O raises its #as$ o00er to ;C2" !r*es t$e/ to ne*otiate 6it$ t$e/" FSR Antitrust I/%rove/ents A#t 1).M2 6aitin* %eriod $as eD%ired"
?$e A#t %rovides t$at ,e0ore #ertain /er*ers+ tender o00ers or ot$er a#:uisition transa#tions #an #lose+ ,ot$ %arties /ust 0ile a WNoti0i#ation and Re%ort 1or/W 6it$ t$e 1ederal ?rade Co//ission and t$e Assistant Attorne- General in #$ar*e o0 t$e Antitrust Division o0 t$e De%art/ent o0 Austi#e" ?$e 0ilin* des#ri,es t$e %ro%osed transa#tion and t$e %arties to it" !%on t$e 0ilin*+ a C0-da- 6aitin* %eriod <1H-da-s 0or all-#as$ tender o00ers= t$en ensues durin* 6$i#$ ti/e t$ose re*ulator- a*en#ies /a- re:uest 0urt$er in0or/ation in order to $el% t$e/ assess 6$et$er t$e %ro%osed transa#tion violates t$e antitrust la6s o0 t$e !nited States" It is unla60ul to #lose t$e transa#tion durin* t$e 6aitin* %eriod" Alt$ou*$ t$e 6aitin* %eriod is *enerall- C0 da-s <a*ain+ 1H da-s i0 t$e transa#tion is an all #as$ tender o00er=+ t$e re*ulators /a- re:uest additional ti/e to revie6 additional in0or/ation and t$e 0ilin* %arties /a- re:uest t$at t$e 6aitin* %eriod 0or a %arti#ular transa#tion ,e ter/inated earl- <Wearlter/inationW="

9art-Scott-Rodino Antitrust +#$rove#ents Act o* :>ID

Anot$er Press Release2 NC reIe#ts O revised o00er o Not %rove NC SF value t$e- deserve o Sto# traded a,ove revised o00er o O a,le to %a- a ,etter %ri#e o !r*e SF not to tender Aoint Pu,li# State/ent2 ne*otiations are on*oin*" Aul- H+ 200H" o CE+.H #as$ o00er o0 all outstandin* s$ares" o Aul- .+ 200H2 si*ned /er*er a*ree/ent" Cas$ deal2 ;CE+.H o O%inion o0 O 0inan#ial advisor" o NC 8OD a##e%ted t$e /er*er a*ree/ent+ #onsider it 0air and in t$e ,est interest o0 NC"

-----------------------------De0enses2 1" A#tion ,- 6ritten #onsent2 C$arter2 6ea ness t$at #an ,e eD%loited" A#t outside t$e annual /eetin*" 2" SF #an as 0or S%e#ial Meetin*" <Del don3t+ so i0 #$arter silent t$e- don t $ave t$is ri*$t= C" Sta**ered ,oard E" Su%er/aIorit- votin* %rovisions H" Pri#e %rovisions oison i""s 4is a ter/ re0errin* to an- strate*-+ *enerall- in ,usiness or %oliti#s+ to in#rease t$e li eli$ood o0 ne*ative results over %ositive ones 0or a %art- t$at atte/%ts an- ind o0 ta eover5 Ot$er anti-ta eover %rote#tions li/itations on t$e a,ilit- to #all s%e#ial /eetin*s or ta e a#tion ,- 6ritten #onsent" Su%er/aIorit- vote re:uire/ents to a%%rove /er*ers" Su%er/aIorit- vote re:uire/ents to re/ove dire#tors" ?$e tar*et adds to its #$arter a %rovision 6$i#$ *ives t$e #urrent s$are$olders t$e ri*$t to sell t$eir s$ares to t$e a#:uirer at an in#reased %ri#e <usuall- 100Q a,ove re#ent avera*e s$are %ri#e=+ i0 t$e a#:uirerSs s$are o0 t$e #o/%anrea#$es a #riti#al li/it <usuall- one t$ird=" ?$is ind o0 %oison %ill #annot sto% a deter/ined a#:uirer+ ,ut ensures a $i*$ %ri#e 0or t$e #o/%an-" ?$e tar*et ta es on lar*e de,ts in an e00ort to /a e t$e de,t load too $i*$ to ,e attra#tiveTt$e a#:uirer 6ould eventuall- $ave to %a- t$e de,ts" ?$e #o/%an- ,u-s a nu/,er o0 s/aller #o/%anies usin* a sto# s6a%+ dilutin* t$e value o0 t$e tar*etSs sto# " ?$e tar*et *rants its e/%lo-ees sto# o%tions t$at i//ediatel- vest i0 t$e #o/%an- is ta en over" ?$is is intended to *ive e/%lo-ees an in#entive to #ontinue 6or in* 0or t$e tar*et #o/%an- at least until a /er*er is #o/%leted instead o0 loo in* 0or a ne6 Io, as soon as ta eover dis#ussions ,e*in" Fo6ever+ 6it$ t$e release o0 t$e W*olden $and#u00sW+ /an- dis#ontented e/%lo-ees /a- :uit i//ediatel- a0ter t$e-Sve #as$ed in t$eir sto# o%tions" ?$is %oison %ill /a- #reate an eDodus o0 talented e/%lo-ees" In /an- $i*$te#$ ,usinesses+ attrition o0 talented $u/an resour#es o0ten /eans an e/%ts$ell is le0t ,e$ind 0or t$e ne6 o6ner"

Peo%leso0t *uaranteed its #usto/ers in Aune 200C t$at i0 it 6ere a#:uired 6it$in t6o -ears+ %resu/a,l- ,- its rival Ora#le Cor%oration+ and %rodu#t su%%ort 6ere redu#ed 6it$in 0our -ears+ its #usto/ers 6ould re#eive a re0und o0 ,et6een t6o and 0ive ti/es t$e 0ees t$e- $ad %aid 0or t$eir Peo%leso0t so0t6are li#enses" ?$e $-%ot$eti#al #ost to Ora#le 6as valued at as /u#$ as !S;1"H ,illion" Peo%leso0t allo6ed t$e *uarantee to eD%ire in A%ril 200E" I0 Peo%leSo0t $ad not %re%ared itsel0 ,- ado%tin* e00e#tive ta eover de0enses+ it is un#lear i0 Ora#le 6ould $ave si*ni0i#antl- raised its ori*inal ,id o0 ;1M %er s$are" ?$e in#reased ,id %rovided an additional ;E"1 ,illion 0or Peo%leSo0tSs s$are$olders"

Dead $and %ill le*al in Geor*ia2 ri*$ts %lan+ 8OD %ut in onl- re/oved ,- t$e D t$at %ut it in" Most Iurisdi#tions don3t li e t$is" Slo6 $and %ill ele#t 8OD )0 da-s ,e0ore ne6 8OD #an re/ove t$e %ill" Ri*$ts Plan2 ?$e tar*et #o/%an- issues ri*$ts to eDistin* s$are$olders to a#:uire a lar*e nu/,er o0 ne6 se#urities+ usuall- #o//on sto# or %re0erred sto# " ?$e ne6 ri*$ts t-%i#all- allo6 $olders <ot$er t$an a ,idder= to #onvert t$e ri*$t into a lar*e nu/,er o0 #o//on s$ares i0 an-one a#:uires /ore t$an a set a/ount o0 t$e tar*etSs sto# <t-%i#all- 1HQ=" ?$is dilutes t$e %er#enta*e o0 t$e tar*et o6ned ,- t$e ,idder+ and /a es it /ore eD%ensive to a#:uire #ontrol o0 t$e tar*et" ?$is 0or/ o0 %oison %ill is so/eti/es #alled a shareholder rights plan ,e#ause it %rovides s$are$olders <ot$er t$an t$e ,idder= 6it$ ri*$ts to ,u- /ore sto# in t$e event o0 a #ontrol a#:uisition Sto# dividend de#lared on t$e s$ares2 ever- s$ares $as a ri*$t issue <ri*$t to a#:uire sto# = trades to*et$er 6it$ t$e #o//on sto# " No value unless and until so/e,odlaun#$es a ,id" " i"" w s$i"" over $rovision2 tar*et SF are allo6ed to ,- s$ares in t$e a#:uirin* #o/%an- sto# " Ri*$t to ,u- t$e a#:uiror sto# at $al0 value" Dilutin* value o0 t$e a#:uirer sto# " Contra#tual /e#$anis/s " F"i$ in, tri**erin* t$res$old <s 20C 1HQ #an ,e redu#ed to 10Q= SF or *rou% eD#eed t$e t$res$old2 ri*$ts ,e#o/e tri**ered+ eD#e%t 0or t$e ri*$ts $eld ,- t$e %erson t$at tri**ered t$is" (D#$an*e 0eature2 *et sto# in eD#$an*e 0or t$eir ri*$t" 1007"1HQ tri**ered no6 1J0 A#:uisition ,et6een C0-H0Q2 *et a,ove H0Q it /a- ,e advanta*eous2 it /a- not ,e diluted"

Co/,ination %ill9 sta**ered voteZ!S( t$e %ill to li/it t$e u/,er os SSF t$at t$e- #an a#:uire" Class X Takeover (e*enses ;T8O< ?a, H2 Penns-lvania Cor%oration 8OD $ave /ore dis#retion <SF less ri*$ts= Constituen#- Statute P8C' U1.1H2 #onsider interest o0 ot$er #onstituen#ies <D('2 #or%oration2 duties o6ed to t$e SFG Id t$reat to a SF interest to ta e de0ensive a#tions= e00e#ts a#tion u%on an- or all *rou%s a00e#ted ,- it in#ludin* SF+ 6or ers+ et# o 8ased on non-s$ 0a#tor2 need S$ a%%roval2 o (D #ase s%in o00 sale o0 %atient #are $ousin*2 8OD #$ose lo6er ,id ,e#ause t$ou*$t ,etter %reserve $ousin*+ ,etter 0or %atients" Fad to reo%en ,iddin* to #onsider t$e $i*$er ,id ,e#ause SF did not a%%rove it" Con#entrate o6ners$i%2 ,id to SF+ ,id to a s/all *rou%" Fi*$line Ca%ital Mana*e/ent2 lar*est SF is re%resented in t$e 8OD" I0 -ou #an a%%eal to t$is Dire#tor2 #$an#e to s%lit t$e 8OD Fed*e 1und /ana*er2 not e/otional to t$e #o/%an-2 *ood o00er+ 6ill sell O?F(R FAND2 not 6ant to sell+ $arderO Sta**ered 8oard2 lon* 0i*$t Rulnera,ilit-2 re/ove t$e entire 8OD on a vote o0 J0Q D('2 sta**ered ,oard2 D #an onl- ,e re/oved 0or #ause Provisions on t$e ,--la6s2 a/ended ,- SF A/end a #$arter-#ert o0 in#or%oration2 a/ended 8OD re#o//ends t$e a/end/ent and t$en SF a%%rove it" Annual Meetin*

S%e#ial Meetin*2 C0Q SF re:uest it" Re:uest to re/ove t$e %ill2 J0Q s$ould vote" <o0 all SF= O/ni#are never tried to do t$isB Advan#e Noti#e Provisions2 no/inations ,- S$ 0or D+ al least )0 da-s %rior" Takeover (e*ense 1" Co/%an- %rote#ted ,- Pill2 0irst rin* o0 de0ense2 not %ossi,le to #lose an o00er /ade dire#tl- SF 6it$out a%%roval o0 8OD 2. 1la62 al6a-s ,e re/oved ,- 8OD %rote#t t$e %ill2 Sta**ered 8OD C" Dela6are statute2 D re/oved onl- 0or #auseG or ,- la6s s%e#ial /eetin*s onl- #alled ,- 8ODG or SF #annot a#t in a 6ritten #onsent+ /ust a#t in a /eetin*" E" Pi# et 0en#e2 %rote#t -our %rovisions" ?o #$an*e an- o0 t$ese %rovisions .HQ votes <su%er/aIorit- vote o0 SF=[ A" 8ear Fu* A%%roa#$2 not even tr- to *o t$rou*$ all t$ese de0enses+ *o %u,li# allo6 SF to %ut t$e %ressure 8" Sue+ ar*uin* t$at it 6as ille*al 0or t$e 8OD to invo e t$ese de0enses" ?o $ave it+ to /aintain it at t$e #riti#al /o/ent" A#:uire /ore 1HQ o0 tar*et #o/ and t$en 6anted to #ause a /er*er o0 tar*et 6 raider all tar*et #o/%an- SF ri*$t to ,u- raider sto# at \ %ri#eB 8usiness #o/,ination Provisions Ca/e into ,ein* 6$en t$e le*alit- o0 t$e %oison %ill 6as not #ertainO Si/ultaneousl- 6it$ Con*ress3 ado%tion o0 t$e @illia/s A#t+ t$e states ,e*an ado%tin* 6$at are no6 no6n as 0irst *eneration state ta eover la6s"K1L 'i e t$e @illia/s A#t+ t$e 0irst *eneration state la6s 6ere /ainl- dis#losure statutes" !nli e t$e @illia/s A#t+ t$e 0irst *eneration statutes also i/%osed #ertain %ro#edural and su,stantive re:uire/ents #reatin* su,stantial o,sta#les 0or ta eover ,idders" Austi#e @$ite3s MITE o%inion le0t o%en a narro6 6indo6 o0 o%%ortunit- 0or states to re*ulate ta eovers2 t$e internal a00airs do#trine+ %ursuant to 6$i#$ t$e state o0 in#or%oration3s la6 *overns :uestions o0 #or%orate *overnan#e" ?$e se#ond *eneration o0 state ta eover statutes 6as #are0ull- #ra0ted to 0it 6it$in t$at loo%$ole ,- ,ein*+ 0or t$e /ost %art+ #autiousl- tailored to avoid dire#t re*ulation o0 tender o00ers" Instead+ t$e se#ond *eneration statutes addressed issues %ur%ortin* to 0all 6it$in t$e s%$ere o0 #or%orate *overnan#e #on#erns traditionall- su,Ie#t to state la6" In t$e -ears ,et6een 1)JC and 1)J.+ /an- o0 t$ese statutes 6ere #$allen*ed and al/ost uni0or/l- 6ere stru# do6n ,- t$e lo6er #ourts as un#onstitutional" ?$at trend 6as reversed 0ollo6in* t$e Su%re/e Court3s de#ision in CTS Corp. v. Dynamics Corp"

In CTS Corp. v. Dynamics Corp"+KJL t$e Su%re/e Court u%$eld an Indiana #ontrol s$are a#:uisition statute" Austi#e Po6ell3s /aIorit- o%inion ,e*an ,- notin* t$at t$e MITE %luralit-3s %ree/%tion anal-sis 6as not ,indin* on t$e Court+ ,ut $e de#lined to eD%li#itl- overrule it" Instead+ Po6ell #lai/ed t$at t$e Indiana A#t %assed /uster even under @$ite3s inter%retation o0 t$e @illia/s A#t3s %ur%oses" It is %er$a%s instru#tive+ $o6ever+ t$at Austi#e @$ite 6as t$e lone dissenter 0ro/ Po6ell3s %ree/%tion $oldin*" In 0a#t+ CTS3 %ree/%tion anal-sis di00ered 0ro/ MITE3s in at least t6o eres%e#ts" @$ere Austi#e @$ite e/%$asized Con*ress3 neutralit- %oli#-+ Austi#e Po6ell e/%$asized Con*ress3 desire to %rote#t s$are$olders"K)L @$ere Austi#e @$ite 6ould %ree/%t an- state statute 0avorin* /ana*e/ent+ Austi#e Po6ell u%$eld t$e Indiana A#t even t$ou*$ $e re#o*nized t$at it 6ould deter so/e ta eover ,ids" Austi#e Po6ell did so ,e#ause $e ,elieved t$at+ des%ite t$e Indiana statute3s deterrent e00e#t+K10L Austi#e Po6ell ,elieved t$at it %rote#ted s$are$olders ,- %er/ittin* t$e/ #olle#tivelto evaluate an o00er3s 0airness" Fe laid %arti#ular e/%$asis on a ,idder3s a,ilit- to #oer#e s$are$olders into tenderin*+ su#$ as ,- /a in* a t6o-tier tender o00er" 8allo6in* s$are$olders #olle#tivel- to reIe#t su#$ o00ers+ t$e Indiana statute de0uses t$eir #oer#ive e00e#t" ?$at t$e statute also deters ta eovers and t$ere,- %rote#ts in#u/,ent /ana*ers is /erel- in#idental to its %ri/ar- 0un#tion o0 %rote#tin* s$are$olders" ?$e Indiana a#t t$ere0ore did not #on0li#t 6it$ t$e @illia/s A#tG to t$e #ontrar-+ Austi#e Po6ell #on#luded t$at it 0urt$ered Con*ress3 *oal o0 %rote#tin* s$are$olders !nli e t$e older ,usiness #o/,ination statutes+ t$e Dela6are statute does not i/%ose eit$er a su%er/aIorit- a%%roval or a 0air %ri#e re:uire/ent in #onne#tion 6it$ ,usiness #o/,inations a0ter t$e 0reeze %eriod eD%ires" ?$us+ on#e t$e t$ree--ear %eriod eD%ires+ t$e interested sto# $older /a- #o/%lete a se#ond-ste% ,usiness #o/,ination on 6$atever ter/s and #onditions 6ould ,e la60ul under a%%li#a,le #or%orate and se#urities la6 %rovisions" In addition+ t$e t$ree--ear 0reeze %eriod is 6aived i0 an- o0 0our #onditions are satis0ied2 <1= %rior to t$e date on 6$i#$ t$e ,idder #rosses t$e 1HQ t$res$old+ t$e ,usiness #o/,ination or t$e tri**erin* a#:uisition is a%%roved ,- t$e tar*et3s ,oard o0 dire#torsG <2= t$e ,idder+ in a sin*le transa#tion+ *oes 0ro/ a sto# o6ners$i% level o0 less t$an 1HQ to /ore t$an JHQ o0 t$e tar*et3s votin* sto# <not #ountin* s$ares o6ned ,- inside dire#tors or ,- e/%lo-ee sto# %lans in 6$i#$ t$e e/%lo-ees do not $ave t$e ri*$t to deter/ine #on0identiall6$et$er s$ares $eld ,- t$e %lan 6ill ,e tendered=G <C= durin* t$e t$ree -ear 0reeze %eriod+ t$e transa#tion is a%%roved ,- t$e ,oard o0 dire#tors and ,- t6o-t$irds o0 t$e outstandin* s$ares not o6ned ,- t$e ,idderG or <E= t$e tar*et3s ,oard o0 dire#tors a%%roves a 6$ite ni*$t transa#tion" Se#tion 20C<,= also sets 0ort$ various ot$er #onditions under 6$i#$ t$e statute 6ill not a%%l-+ /ost %ro/inentl- an o%t-out %rovision %ursuant to 6$i#$ a #or%oration /a- eDe/%t itsel0 0ro/ t$e statute t$rou*$ a%%ro%riate #$arter or ,-la6 %rovisions +nterested erson2 #an3t #ause a /er*er ,et6een itsel0 and tar*et 0or so/e %eriod o0 ti/e" <Poison Pills does /ore and ,etter= Rariations o0 t$is So/e states2 #ant #ause a /er*er 0or C-H -ears

Del #ant #ause it 0or C -ears unless -ou *et a su%er/aIorit- vote o0 una00iliated SF" o Del i0 -ou *et /ore t$an JHQ in -our ?ender O00er t$en -ou are 0ree o0 U20C"

KFouse$old v MoranL 1)JH2 u%$eld t$e le*alit- o0 t$e %oison %ill" Ado%ted %lan in a %re#autionar- 6a-" 8usiness Co/,inationsB Po6er0ulB Control SF a#:uisition statute ?o%%in* Deal So/eone o00ers /ore /one- /ore valueO 8OD dealin* 6it$ unsoli#ited ,id 8AR 8usiness Aud*/ent Rule %resu/%tion Dire#tors a#ted in *ood 0ait$+ ,est interest o0 t$e #or%orations i0 -ou as in *ood 0ait$7"#ourt 6ill not se#ond *uess -our ,usiness Iud*/ent" K(rinson v 'e6isL 1)JE la- do6n 2 %%les 0idu#iar- dut-2 1" ] Dut- o0 #are2 a#t on an in0or/ed ,asis+ as : *et ans6ers" Reasona,le %erson standard2 o,Ie#tive test" A,ilit- to rel- on eD%erts" Dire#tors t$at $ave an eD%ertise are not $eld to t$at standard" Invest/ent ,an er on 8OD o0 a #o/%an-2 $eld to a $i*$er standard2 0airness o%inion 6as #ra%7unusual #ase" 2"- Dut- o0 'o-alt-" No #on0li#t" M- interest di00erent 0ro/ a SF" Del U102 , .2 eD#ul%ated and inde/ni0ied 0or ,rea#$es o0 dut- o0 #are" Not 0or ,rea#$es o0 lo-alt-" KS/it$ v Ran Gor e/L RanGor e/ C(O sell t$e #o/%an- 0or ;H0 a s$are+ does not *et invest/ent ,an ers+ not tell ot$er D 6$at $e is doin*" A*ree 6it$ deal+ 8OD a%%roves in C da-s" Get 1M s$ares at / t %ri#e" H inside D+ H outside" D *rossl- ne*li*ent" !nin0or/ed as to t$e intrinsi# value o0 t$e #o/%an-" 1" Gross Ne*li*en#e2 standard 0or ,rea#$ o0 dut- o0 #are" 2. Invest/ent 8an in* industr- ,oostO 1airness O%inion K?e#$ni#olorL Dut- o0 lo-alt-2 a#tual %erson test2 : is2 6as t$at %erson a00e#ted ,- $is or $er ot$er interest in /a in* t$e de#ision"

1)JH2 en$an#ed s#rutin- o0 #ertain de#isions in a ta eover #onteDt2 K!no#alL Mesa+ ve$i#le 0or a raider+ 1CQ sta e in !no#al" 'aun#$ed a stru#turall#oer#ive ,id" HE; #as$ ?O to a#:uire C.Q o0 t$e #o/%an-2 over H0Q+ t$en ,a# end /er*er and %a- HE; 0or/ o0 se#urities 6$i#$ 6ere not 6ort$ t$at /u#$" ! 0inan#ial adviser2 laun#$ed an eD#$an*e o00er to re%ur#$ase E)Q o0 t$eir o6n sto# + in eD#$an*e o0 de,t 6ort$ .2;" Court is eDa/inin* !no#al3s res%onse2 re%ur#$ase sto# " In !no#al+ t$e Court $eld t$at a ,oard o0 dire#tors #ay on"y try to %revent a ta e-over 6$ere it #an ,e s$o6n t$at t$ere 6as a t&reat to #or%orate %oli#and t$e de0ensive /easure ado%ted 6as $ro$ortiona" and reasona!"e *iven t$e nature o0 t$e t$reat 8OD a#tin* in its o6n dut-2 en$an#ed s#rutin-" A" ?$reatOOO 8" Res%onse2 reasona,le to t$e t$reat %osed7" K!nitrinL ,oard o0 dire#torsS a,ilit- to use de0ensive /easures+ su#$ as %oison %ills or ,u-,a# s+ to %revent a $ostile ta eover" ?$e #ase de/onstrates an a%%roa#$ to #or%orate *overnan#e t$at 0avors t$e %ri/a#- o0 t$e ,oard o0 dire#tors over t$e 6ill o0 t$e s$are$olders" ?$e Su%re/e Court 0ound t$at t$e lo6er #ourt erred in a%%l-in* t$e !no#al standard" ?$e #ourt /ust 0irst deter/ine 6$et$er t$e de0ensive /easure is draconian in t$at it $as t$e e00e#t o0 %re#ludin* or coercing s$are$olders #$oi#e" Onl- a0ter t$at deter/ination s$ould t$e in:uir- s$i0t to 6$et$er t$e /easure is 6it$in t$e ran*e o0 reasona,leness in res%onse to t$e %er#eived t$reat" 6e t$in t$e #o/%an- is 6ort$ /ore <su,stantivel- #oer#ive= Iusti0- t$e ta in* o0 ?O de0enses"

Class XI KRevlonL ?"O2 not -et esta,lis$ed $i/sel0 as t$e /ost res%e#ta,le" Pantri-Pride Perl/an t$reatens a Iun ,ond"" Revlon ado%ts a nu/,er o0 de0enses

Re%ur#$ases s$ares in eD#$an*e 0or de,t and %re0erred sto# Perl/an ,oosts to HM7R noO 'o#$ u%s2 2HM ,rea u% 0ee+ #ro6n Ie6el2 1or#e/an una,le to ,u- all o0 Revlon+ lo ,u- 2 divisions 100M ,elo6 0air /ar et value" 8OD2 0idu#iar- duties- (arl- %art o0 t$e deal 0ine2 ee% t$e #o/%an-" ?o ,u- ,est deal to SF" Cro6n Ie6el 6as not t$e ,est deal" Dela6are2 8OD /eans a dut- to t$e SF" Pa*e J2 0o#used in t$e ,rea u% idea2 anti s$ %oint o0 vie6B 'evel %la-in* 0ield rule2 #ertain #ir#u/stan#es2 sellin* #o/%an- 0or #as$ $ave to treat ever-,od-Gs /one- ali e7#an3t %la- 0avorites" Penns-lvania+ eD%ressl- reIe#ted Revlon" Fi*$est %ri#eB Or treat ever-one 0airl-B Au#tion2 $i*$est %ri#eO !se o0 lo# u%s+ %oison %ills2 %a*e )2 use t$is in#entives to ,rin* %eo%le into t$e 0i*$t+ not to end t$e %ro#ess" Pa*e 102 o,Ie#tivel- $i*$er t$an %anti %ride2 Revlon ended t$e au#tion 0or little i/%rove/ent in t$e 0inal ,id" K!no#alL %rote#tive o0 D+ t$reat2 ID <stru#tural-su,stantivel-= Iusti0ies ?O de0ense /easures" KRevlonL #an3t do an-t$in* at allO 1or sal+e o%en t$e au#tion 6$en are -ou in Revlon /odeB

K?i/e & @arnerL set u% di00erent2 ? In#" s%ent -ears o0 #onsideration and anal-sis o0 its #ulture+ ,usiness+ et# and de#ides t$at t$e ,est t$in is to /er*e 6it$ @arner" Sto# 0or sto# deal2 #reated no ne6 de,t on t$e #o/,ined #o/%an Preservation o0 ?i/e In# s%e#ial #ulture in t$e a*ree/ent Ot$er t$an @ SF 6ould end u% o6nin* M2Q"""loo ed li e a /er*er o0 e:ual+ or t$at ? 6ere t$e a#:uirer" Para/ount studios and ,ids 1.H; a s$are2 enor/ous %ri#e ?i/e In#"2 6orried a,out2 S$ 6ould %re0er t$e %ara/ount o00er over t$e @arner o00er and 6ould not *et t$e a%%roval2 de#ide to a#:uire @arner2 t$eare %a-in* #as$2 <no SF voteO= $o6 do t$e- *et t$e #as$2 issue ,onds 1ro/ No de,t deal to a %assivel- leverin* deal2 . to 10 8 dollars o0 de,t2 *ets rid o0 SF vote" Para/ount to 200;2 ti/e reIe#ts it as inade:uate" ?$reat to ti/e survival and #ulture Pa*e M2 *ood t$e ti/e %ro#ess 6as2 outside dire#tors /et 6it$out /ana*e/ent2 0inan#ial advisors7o0ten 8OD /et7un#on0li#ted 0inan#ial advisers and t$e li e C$an#ellor Allen2 under 6$at #ir#u/stan#es /ust a 8OD a,andon an in %la#e %ro*ra/ to %rovide SF ?i/e ?i/es ,oard develo%ed a strate*i# %lan+ #o/e under a 0idu#iardut-""a,andon it7*ive t$e de#ision to SF" Su%re/e Court2 $ad ti/e %ut itsel0 u% 0or saleB ?i/es a#tions did not /ean7 or /ade a sale inevita,le7#or%orate transa#tion si/%l- ,e#ause t$e- /i*$t i/%l- t$at7u% 0or sale7 Mer*er 6it$ @arner ulti/ate #o/,ination strate*i# %lannin*2 ?O de0enses2 idea to insulate t$e/ and allo6 0or lon* ter/ %lannin*2 i0 t$eruled a*ainst ?i/es an- #onversation 0or /er*er 6ould %ut -oursel0 in Revlon situation2 too /u#$ %o6er to SF7*ivin* #or%orations lee6a- 0or lon* ter/ %lannin*O 8ased rullin* on di00erent %%les2 o C$an#ellor2 ?i/es $ad not %ut itsel0 u% 0or sale ,e#ause t$e /er*er did not a/ount to a #$an*e o0 #ontrol o0 ?i/e" 4#$an*e o0 #ontrol5 %a*e )2 ,e0ore t$e M a*ree/ent 6as si*ned+ #ontrol o0 ? eDisted in a 0luid unna00iliated o0 S$ in /ar et""no one #ontrolled ?7a0ter t$e %ro%osed /er*er2 t$at 6ould still ,e true2 #o/,ined entit- 6ould $ave no lar*e sto# $older7o%%ortunit- to *et %re/iu/ $ad not %assed" o SC2 %a*e )2 2 situations 1= #or%oration initiates a#tivin* ,iddin* or au#tion+ 2= a,andon a lon* ter/ strate*- also involvin* t$e ,rea u% o0 t$e #o/%an-" @e are in K!no#alL o ID a t$reat2 su,stantive #oer#ion2 real" ?i/es SF /i*$t ele#t to tenderin* Para/ount in i*noran#e o0 t$e strate*i# ,ene0it 6$i#$ a ,usiness #o/,ination 6it$ @arner /i*$t %rodu#e" 8OD no6s ,etterO Res%onse2 reasona,le and %ro%ortionate"

o Deli,erate Strate*- does t$at ee% -ou out o0 Revlon /odeB KPara/ount v PRCL o @$at i0 -ou $ave no strate*- ,ut -ou doin* sto# 0or sto# 6$ere t$e o%%ortunit- 0or #ontrol %re/iu/ 6ould #ontinue even a0ter t$e deal #loses" KSo#iet- 0or Savin*sL KPara/ount v PRCL Ria#o/ JHQ #lass A and + .)Q #lass 8 %art #as$ %art sto# deal2 100M ,rea u% 0ee" Sto# o%tion lo# u%+ so/e,od- #o/es alon* o00erin* /ore 0or %ara/ount and 6as su##ess0ul+ X 6ould *et s$ares o0 Para/ount PRC2 #o/%etin* ,id to ,u- %ara/ount also #as$-sto# P re0uses to /eet+ #o/%lains a,out #onditionalit-7don3t ,elieve #an raise #as$ o%tion o0 t$eir o00er+ and sto# %art 6ill not ,e 6ort$ as /u#$7as Ria#o/O Doesn3t do an-t$in* to see i0 t$e- #an re/ove t$ose #onditions" Court2 @RC ,etter deal 0ro/ Ria#o/2 #ourt disa%%ointed t$at Para/ount did not ta e t$e o%%ortunit- to do t$is" Dut- to ne*otiate 6it$ PRC+ dut- to not *ive enor/ous lo# u%s to Ria#o/ <#o/%etitive advanta*e in t$e ,iddin*= Revlon /odeO 1o#us on SF valueO Court2 P5 out /er*er is %art o0 lon* ter/ strate*-2 #a,le #o/%an-2 *reat assets2 %uttin* t$e/ to*et$er+ s-ner*-7%lannin* t$is 0or a 6$ile7Iust li e ?i/eO 'eave us aloneO 'on* ter/ strate*- irrelevant on#e -ou $ave a sale o0 #ontrol2 &ou are in RevlonO Su%re/e Court2 rea#$es ,a# to #$an#ellor Allen o%inion2 - ControlO Control not vested in a sin*le entit-2 /ar et+ PRC a0ter t$e deal sin*le$andedl- ele#t Dire#tors+ #ause ,rea u%+ /er*e it+ #as$ out %u,li# sto# $olders+ a/end #erti0i#ate o0 in#or%oration+ alter /ateriall- nature o0 t$e #or%oration even i0 8OD $ad a vision2 vision #an ,e altered unilaterall-2 %a*e 122 assets ,elon*in* to t$e %u,li# is ,ein* sold and /a- never ,e availa,le a*ain" @$at is a #ontrol %re/iu/2 o %o6er to de#ide $o6 t$e assets 6ill ,e used" o Co/%ensation *ivin* u% votin* %o6er+ and interest in t$e su##ess o0 t$e #or%oration" Goin* to ,e a*ain in t$e 0uture2 ?i/e 6arner -esO Fere+ Sandra Redstone 6ould #ontrol2 -ou are in RevlonOOO P2 dd not run a au#tion+ not ,rea u% #o/%an-7"AND Generall- s%ea in*7/entioned 2 ,ut t$ere 6ere ot$ers2 P $ad unintentionallinitiated au#tion7Revlon under C #ir#u/stan#es2 C= #$an*e o0 #ontrol7in t$is sense

Fostile ,idder alone2 6it$out an- a#tion on t$e %art o0 t$e tar*et+ does not #reate Revlon duties2 not t$e #onse:uen#e o0 8OD a#tion7resist"" KSo#iet- 0or Savin*sL saleO Consideration sti# no #as$ No Revlon duties2 P sti# to %%le C$an#ellor Alla in ?i/e In# A#:uirin* #ontrol o0 it2 $ard to see $o6 t$ere 6as no %reservation o0 strate*-+ *ettin* %re/iu/O Court2 is t$e o%%ortunit- 0or #ontrol %re/iu/ %assin*B Sto# 0or sto# not deal+ #as$ deals Revlon79 a#:uirer is #ontrolled or notO Ma#Millan 1&at does it #ean to &ave contro"B Pra#ti#all- $ave #ontrol2 Sandra readstone $ad 100Q+ 6$at i0 E)Q sta e""not #ontrol ,e#ause t$e a#:uire a*reed to li/itations on its %o6er7a%%oint /aIorit- o0 8OD+ in#rease its sta e in t$e #o/%an-7NO CON?RO'7 CCQ 0ound to $ave #ontrol"""as a $ractica" #atter+ no li/itations7enou*$ a,ilit- to 6or 6it$ ot$ers to assert #ontrol7 Fo6 result oriented t$e Del #ourt a%%ear to ,eB I0 #ourt li es 8OD+ 6in+ i0 notO Ran Gor e/-loose+ !ni#al+ 6ins+ Revlon7",ad 8OD K8lasiusL %ro%osin* in#rease size 0ro/ . to 1H2 a%%oit J ne6 dire#tors" MaIorit-" Atlas 8OD2 a%%ointed 2 additional /e/,ers7) seats""even i0 8OD *ot eD%anded+ old dire#tor a##ounted 0or )7 C$an#ellor Allen2 violation dut- o0 lo-alt-2 onl- inter0ere 6it$ t$e SF 0ran#$isei0 -ou $ad a #o/%ellin* Iusti0i#ation" 2o under li/ited #ir#u/stan#es7,est interest sto# $olders7turn it do6n7 6$at ind o0 %ro#ess to satis0- Revlon o,li*ationsB ?reat %eo%le di00erentl-B @it$in t$e %ro#ess @$at ind o0 in#entivesB Ga/es to *et $i*$er ,id7 Get ,est %ri#e reasona,l- availa,le7not %er0e#t7not $i*$est7 Sto# C0+ o00er E07invest/ent ,an er tells -ou dis#ounted #as$ 0lo67t$eoreti#allH07NOO o,li*ation ,est reasona,l- availa,le7 @ell stru#tured %ro#ess""

Class XII (ea" rotection Steal t$e Deal2 so/e,od- else" Deals si*ned2 8OD re%resents t$e/ <a*ents= ,ut still SF a%%roval needed" Private Deal2 t$ere is a seller2 *ets t$e ;" Seller o6ns t$e assets $as t$e a,ilit- to #o//it to t$at sale" Pu,li# Deal2 sold *ets to SF and no one le0t" Onl- %u,li# deal2 1idu#iar- out2 $i*$er %ri#e2 a,le and le*al o,li*ation to a##e%t t$at $i*$er %ri#e" Cro6n Ae6el" Get t$e re0iner- at ,oo value2 <re:uirin* SF vote2 sale all su,stantiall- all assets )HQ= 1irst ,u-er #an ta e t$e /ost valua,le %ie#e 0or t$e/selves" Not allo6ed2 #ourt" Cro6n Ie6el asset lo# -u%" 8ear Stern ,uildin*"

Fard to 0ind ,u-er2 o00er so/e #ertaint- to %ut t$e ,est %ri#e on t$e ta,le" (ea" rotection Aud*e 'eo Strine2 %revent seller 0ro/ %la-in* 0ootsie 6it$ ot$er ,idders" Fave ri*$t to enter /er*er a*ree/ent and re#o//end t$e SF" 8alan#e eD%e#tations #o//itted ,u-er and ri*$ts o0 SF" Not onl- a,out /one-2 deals are strate*i#2 deal not tan*i,le" 8ear $u* letter2 *o %u,li# /ar t$eir #o/%an- u% ,- %uttin* t$e/ in %la-" ?oo C -ears+ 6ooin*" SF ri*$t to de#ide 0or t$e/selves2 1" No S&o$ Covenant2 don3t *o around 2" )reak u$ *ee2 ter/ination 0ee" So/eone to%s t$eir deal+ sort o0 #o/%ensation 0or $avin* lost t$e deal" Not Iust out o0 %o# et eD%enses" 'i/it2 CQ 3. +n*or#ation and Matc& rig&ts2 0irst ,idder *ets to la- out t$e rules o0 en*a*e/ent2 %u,li# 0iled 6it$ S(C2 road/a%" Court said it 6as %er/issi,le" @$o t$e ot$er ,idder isB @$at are t$e #onditions" o Mat#$ Ri*$t2 0irst in line2 /at#$ an- ot$er ,id t$at is /ade" Rer%o6er0ul" E" 'o# u% a*ree/ent" O/ni#are" A*ree/ent 6it$ SF t$at a*ree to vote in 0avor o0 t$e deal" H" 1)+)Q sto# o%tion on t$e tar*et #o/%an-" N&S( rule2 issuin* 20Q o0 -our sto# 2 SF vote" KPRCL /aD a/ount ,rea u% 0ee+ in#ludes t$e value ot$er #onsideration 6$en -ou eDer#ise an o%tion" No %ur%ose to $ave t$is o%tion2 *et -our ,rea u% 0ee+ /aD a/ount in e#ono/i# value" Poolin* o0 interest a##ountin*" Cro6n Ae6el2 less t$an 0air value Ora#le ""Peo%le So0t2 6ant #usto/er ,ase2 s$ut do6n ever-t$in*" Custo/ers Assuran#e Ri*$t2 i0 6e *et ta en over and t$e- sto% sellin* our so0t6are2 t$e $ave to ,u- it" ?$at is a %oison %ill2 Courts did not $ave to /a e a de#ision2 a##e%ta,le or not" ?$is is %rote#tin* our #o/%an- a*ainst a ris " ?"O2 Fo6 t$e #ourts 6ill loo at ta eover de0ense !ni#al

8AR2 *ood 0ait$+ t$ou*$t0ull-2 #ourt is not *oin* to se#ond *uess t$e/" LCertain situation $ei*$tened standard2 ?O2 res%onsi,le de0enses" 8OD ris #on0li#t o0 interest2 tr-in* to %rote#t t$eir o6n Io,s as dire#tors" 1= is t$ere a t$reat+ 2= reasona,le res%onse <not #oer#ive+ not %re#lusive= (ntire 1airness2 #on0li#t o0 interest" 1air %ro#ess and 0air %ri#e" Di00i#ult standard to /eet" 4No s$o%5 no loo%$oles i0 t$e- #o/e unsoli#ited+ o ri*$t to tal 7li/its7 #annot *o out to loo 0or itO De #ase la62 no %rovision t$at -ou 6on3t tal to anot$er %otential ,idder" KA#e Ca%r-L #annot #ontra#t a6a-G 8OD dut- to in0or/ itsel0 6$i#$ is t$e $i*$est %ri#e availa,le 0or t$e #o/%an-" Standstill2 6ont /a e a ,id 0or a #o/%an-2 au#tons in t$e #on0identialit- a*ree/ent2 -ou #annot turn around and do a ?O" 4Go S$o%5 O%%osite Si*ned t$is a*ree/ent *o 0ind a ,etter %ri#e" Allo6s t$e ,u-er Don3t $ave an au#tion+ s%eed it u%" 1irst ,u-er t$e /ost di00i#ult 2 overla%s+ a**ressive2 di00i#ult as an antitrust /atter2 si*ned deal %rivate e:uit- ,u-er2 in t$e $o%e t$at 6ould ,rin* t$e/ to t$e %art-" Ri*$ts o0 8OD to *et a ,etter deal2 ri*$t to *et a ,etter deal+ KRevlonL translates into an o,li*ation to a#tuall- %ursue t$e o,li*ation" o 8est %ri#e reasona,l- availa,le2 no sin*le ,lue %rint2 u% to t$e 8OD #lassi#+ ne*otiate si*n u% 6it$ t$e/+ a0ter6ards -ou $ave t$is %rovision+ ter/ination 0ee not %re#lusive+ 0idu#iar- out" @indo6 S$o% Period" o Au#tion in advan#e2 %u,li#2 announ#es u% 0or sale2 eD%lorin* strate*i# alternatives2 en*a*ed Mor*an Stanle-7 unsettlin* 0or %eo%le+ #usto/ers7et# Private2 ,an ers 6ill do it" Mar et s$are" o KNets/artL Strine2 rare eDa/%le2 Iud*e 0ind 8OD ,rea#$ed Revlon duties2 0avored '8O %rivate e:uit- 0und" Mi#ro #a%2 120M" o Del la6 $as not #$an*ed2 no sin*le ,lue %rint" o Revlon-Deal Prote#tion2 lo# u% to so/e de*ree not *o over t$e to%"

41idu#iar- Out5 Ri*$t %rovide in0o+ en*a*e in ne*otiations2 ind o0 a 0idu#iar- out2 are allo6ed to do t$e/ under t$is %rovision i0 -our 0idu#iar- duties re:uire -ou to *ive in0o to ,idders" @e /a- ,e 6illin* to %a- a $i*$er %ri#e" ?er/ination 1ee C-EQ 1ull- S$o% Deal2 #loser to EQ+ $as not ,een s$o%%ed at all+ #loser to t$e 2Q2 s$ould not ,e %re#lusive" Re#o//endation2 8OD #$an*e o0 re#o//endation" O6e us t$e ,rea -u% 0eeG or onl- i0 SF turn it do6nG or unless so/eone ,u-s t$e #o/%an- in a #ertain ti/e 0ra/e" ?a,le2 #ause o0 ter/ination+ reason+ U+ e00e#t+ %art-2 'i/it on t$e S$ 0ran#$ise2 eD%enses %a-a,le" 8ut it /a- ,e too /u#$" No #ase la6 on t$is %oint" 4Rotin* A*ree/ents5 'o# -u% 8i* SF a*reein* to su%%ort t$e deal" Ps-#$olo*i#al ele/ent to it" Most o0 t$e/2 are not real lo# -u%s" Su,Ie#t to t$e 8OD 0idu#iar- out" ?"OG to vote 0or a /er*er" Got a #ontrollin* s$are$oldin*" A%%rove a Mer*er2 H0Q <so/e states 2>C+ or ot$er= Can -ou lo# t$e/ u%2 in so/e #ases -es" Cannot use 0or#e vote %rovision 9 votin* a*ree/ent" JO#nicareK o NCS2 *oin* ,an ru%t o O/in#are2 ,u- -ou in ,an ru%t#-" UCMC sale o Genesis" Pa- so/et$in* 0or t$e e:uit- $olders" H1Q SF lo# u% t$e deal2 0or#e vote 9 votin* a*ree/ent" Assu/e t$is 6as 0ine" P%al2 SF $ave to /a e de#ision 0or t$e/selves" Fere -ou $ave t$atO ,- votin* %o6er <di00erent t-%es A-8= Su%re/e Court2 Cannot do t$at" !n0air to $ave #o/%lete lo# u%" Dissent2 ,etter ar*u/ent" No $indsi*$t" Good 0ait$ o0 8OD and SF vote"

!%set ever-t$in* t$e- t$ou*$t t$e- ne6 a,out lo# u%s" SF $ad t$e %o6er" Pa- 0or #ertaint-+ ta e %ri#es do6n" @ritten #onsent2 A? &?2 #ontrollin* SF si*ned t$e #onsent2 a#tion ,- 6ritten #onsent" KO%ti/a v SteelL #ould still a#t ,- 6ritten #onsent"

8u- 6$ole #o/%an-2 J0Q S$ do it in one s$ot" Prote#tions to s:ueeze out" Con0li#t o0 interest transa#tion" O6n #ontrol+ and ,u- t$e rest o0 it"