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Going Private Illustrative Structure
Equity Financing: PE Fund commits to make an equity investment in Holdco in exchange for Holdco Shares, pursuant to an Equity Commitment Letter. Target will have third party beneficiary rights to force Holdco to draw down these funds under certain circumstances. Equity Contribution: If participating, Founder agrees to contribute its shares of Target to Holdco in exchange for Holdco shares. Limited Guarantees: PE Fund/Founder guarantee payment of reverse termination fee to Target if Holdco is in breach or fails to close due to debt/equity financing failure. Debt Financing: Banks agree to provide debt financing to Acquisition Sub, pursuant to a Debt Commitment Letter or Loan Agreement. The loans will be payable by Target post-closing and guaranteed by Holdco. Merger: Acquisition Sub merges with and into Target pursuant to terms and conditions of merger agreement. Merger requires shareholder approval; Founder agrees to vote its shares in favor of the Merger. Merger Consideration: Public shareholders are paid cash and their shares of Target are cancelled. Founder’s shares of Target are cancelled for no consideration. Target’s cash may be used to fund a portion of the Merger Consideration.
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Target will disclose the receipt of a proposal from Founder on Form 8-K/6-K (and may choose to do so for other proposals) Founder (and other applicable consortium members) will disclose the proposal and any Consortium Agreement on Schedule 13D
Cash Merger Consideration from Holdco/Acquisition Sub PE Fund Founder/ Major Shareholders Equity Contribution Holdco (Offshore)

Equity Commitment
Public Shareholders
Introduction to U.S. Going Private Transactions
March 2012
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ContePrivate Illustrative Structure Going Private Transaction Process Major Considerations
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Merger Agreement SEC Disclosure Interested Shareholder Statutes Special Committee US Tax
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US and Cayman Comparison Case Study: Shanda Interactive Recently Announced Transactions
Consideration of other transaction alternatives, including a pre-signing market check or full auction Founder’s ownership % and participation in transaction may effect Target’s ability to pursue alternative transactions

Pre-Closing Ownership
100% Post-Closing

100% Pre-Closing
Acquisition Sub (US/Cayman) Debt Commitment
Merger
Target (US/Cayman)


Banks
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Founder and Sponsor may jointly submit a proposal, or Sponsor may submit a proposal by itself and seek participation by other co-investors and/or Founder later If a joint proposal is submitted, the consortium members will agree upon preliminary matters such as confidentiality, fees and in some cases exclusivity
Disclosure of Merger Agreement and other applicable transaction documents by Target on Form 8-K/6-K and, if applicable, by consortium members on Schedule 13D Prepare and submit SEC filings (proxy statement and, if applicable, Schedule 13E-3) SEC review process (6-8 weeks) Regulatory approval process (e.g., anti-trust review) Shareholders meet to approve the transaction (generally 30 days notice) Closing of transaction and delisting of Target These steps are illustrative – the Special Committee will have discretion to manage the transaction process and timing as it determines appropriate
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Consortium executes an NDA (with standstill) and conducts due diligence The Special Committee may request a firm offer with equity and debt commitments before proceeding to negotiate the transaction
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Going Private Transaction Process
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Submit a preliminary proposal to Target’s Board
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The preliminary proposal will describe the proposed financing and be subject to due diligence and the negotiation of definitive documents
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Going Private Transaction Process (continued)
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Financial Advisor delivers fairness opinion to Special Committee
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Special Committee and Board approve the transaction; execution of transaction documents
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The Board will form a Special Committee to consider a proposal from Founder or other insider
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The Special Committee will retain independent Financial Advisor and Counsel Target will disclose the formation of the Special Committee and the retention of advisors on Form 8-K/6-K Financial Advisor will conduct financial due diligence and report on preliminary valuation analysis and transaction alternatives