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Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States;Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

Foreign Corrupt Practices Act

Current Developments Affecting Cross-Border M&A

James ParkinsonWashington, D.C.

+202/263-3385jparkinson@mayerbrown.com

December 2009

Outline of Presentation

• Introduction to the Foreign Corrupt Practices Act

• Cases Studies re Corruption Risks in Cross-Border M&AActivity

• Identifying and Managing Corruption Risks

• Q&A

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Introduction to the Foreign Corrupt Practices Act

• Anti-bribery provisions

– Offer, payment, authorization, or promise to pay

– Money or anything of value to

– Any foreign official, political party, candidate for public office,employee of state-owned or state-controller company,employee of a public international organization, or any otherperson while knowing that all or some of the money will go toone of the above

– For the purpose of influencing any act or decision of the foreignofficial, inducing the foreign official to do or omit to do any actin violation of their lawful duty, or securing any improperadvantage

– In order to assist in obtaining or retaining business

Introduction to the Foreign Corrupt Practices Act(cont’d)

• Accounting provisions (applicable to Issuers only)

– “[M]ake and keep books, records, and accounts, which, in reasonabledetail, accurately and fairly reflect the transactions and dispositions ofthe assets of the issuer.”

– “[D]evise and maintain a system of internal accounting controlssufficient to provide reasonable assurances that—

• (i) transactions are executed in accordance with management’s general or specificauthorization;

• (ii) transactions are recorded as necessary (I) to permit preparation of financialstatements in conformity with generally accepted accounting principles or anyother criteria applicable to such statements, and (II) to maintain accountability forassets;

• (iii) access to assets is permitted only in accordance with management’s general orspecific authorization; and

• (iv) the recorded accountability for assets is compared with the existing assets atreasonable intervals and appropriate action is taken with respect to anydifferences.

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Introduction to the Foreign Corrupt Practices Act(cont’d)

• Reach of U.S. jurisdiction

– Issuers, domestic concerns, others

• U.S. enforcement authorities

– Department of Justice: criminal enforcement

– Securities and Exchange Commission: civil enforcement

• Cooperation among international anti-corruptionenforcement authorities

Cases Studies re Corruption Risks in Cross-BorderM&A Activity

• Latin Node

– Acquired in June 2007 by eLandia International, Inc.

– Representations and warranties re FCPA compliance obtainedfrom Latin Node CEO

– Discovered after acquisition

– Ancillary civil litigation

• Titan

– Lockheed Martin proposed purchase of Titan and in pre-acquisition diligence, discovered payments in Benin

– Deal failed; Titan prosecuted

• InVision

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Identifying and Managing Corruption Risks

• Due diligence:

– Pre acquisition

– Post acquisition

– DOJ Opinion Release 08-02

• Jurisdictional analysis

• Deal documents: reps and warranties

• Compliance integration

Q&A