Corporate Finance

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CORPORATE FINANCE

“Intellectual Capital Equity represents the largest class of financial assets. At Ocean Tomo we have an experienced appreciation for the contribution of intellectual capital to the growth of any business. Our experience and network provides the firm and its clients with first-look opportunities and priority positioning as a strategic partner in any merger or acquisition. Our work is grounded in the firm’s broad perspective as an Intellectual Capital Merchant Banc.”

JAMES E. MALACKOWSKI
PRESIDENT & CEO

Ocean Tomo is an integrated intellectual capital merchant banc providing: Expert Services including Financial Testimony and Surveys Valuation opinions including Appraisals, Patent Analytics and Patent Ratings Asset Management services including Private Capital, Public Equities and Patent Sale/License-Back Risk Management Corporate Finance including Merger and Acquisition Advisory and Patent Auctions Our goal is to assist our clients - corporations, law firms, governments and institutional investors - in realizing value from their Intellectual Capital Equity broadly defined. Whether faced with "bet-the-company" litigation or a critical transaction, our professionals are world-class innovators providing solutions to our clients' needs. Our comprehensive range of products and services is unique and built upon a focused attention to intangible assets. Our offices are located in Chicago (headquarters), San Francisco, Washington DC Metro, Greenwich, Orange County and Palm Beach.

WORLD CLASS INNOVATORS

INTELLECTUAL CAPITAL EQUITY

INTELLECTUAL CAPITAL EQUITY
Ocean Tomo’s fundamental belief is that intellectual property capital, defined as traditional intellectual property assets—patents, trademarks, and copyrights—in combination with other intangible assets, has significant unrealized value. Ocean Tomo refers to intangible intellectual assets by the term “Intellectual Capital Equity” to reflect this belief. Intellectual Capital Equity represents the largest and most rapidly growing source of wealth globally. In the United States intangible assets represent the largest component of public market value with traditional intellectual property accounting for the vast majority of this asset class. Recent and anticipated changes in accounting rules and securities reporting will further increase the recognition of these assets. In fact, value growth of Intellectual Capital Equity is both visible and quantifiable by noting the intangible vs. tangible value shift of the S&P 500 over the past 30 years. At Ocean Tomo, we believe that intellectual property represents asset value that is often overlooked in traditional transactions. Through the use of our unique platform of services, we identify the intrinsic buy or sell-side value of intellectual property for the benefit of our clients. We at Ocean Tomo have substantial experience in both evaluating new and existing technologies as well as advising clients seeking strategic, value-enhancing opportunities for their intellectual property.

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Components of S&P 500® Market Value
100%

31.6%
80%

20.3%

67.6%
60%

83.2% 79.7%

40%

68.4% 32.4% 16.8%

20%

0% 1975 1985 Tangible Assets 1995 Intangible Assets 2005

INTELLECUAL CAPITAL EQUITY
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INTELLECTUAL CAPITAL EQUITY

CORPORATE FINANCE GROUP
The Corporate Finance Group of Ocean Tomo offers traditional M&A Advisory Services as well as specialized M&A Advisory Services for distressed situations. The Corporate Finance Group offers the solutions that meet our clients’ situations and needs. Our professionals leverage services offered by our other practice areas including the Valuations Group to develop recommendations that best solve our clients’ issues. Financial advisory services relating to the sale or other value realization of individual intellectual property assets are offered as well.

Corporate Finance

M&A Advisory Valuation Group Distressed M&A Advisory

Solutions
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VALUE DRIVEN PROCESS
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INTELLECTUAL CAPITAL EQUITY

M&A ADVISORY SERVICES
In today’s volatile economy and the Sarbanes-Oxley compliance environment, accurate valuation and sophisticated marketing should be demanded by officers, directors and shareholders—especially for intellectual property which by its intangible nature can be difficult to value. Ocean Tomo professionals have unmatched experience in evaluating intellectual property across a broad spectrum of industries for a variety of business strategies. We use this core expertise as a platform to provide unique advisory services for mergers, acquisitions and asset sale transactions—both traditional and distressed. In distressed situations, specialized valuation and marketing of intellectual property assets can be crucial to both a successful enterprise reorganization as well as to a generation of the highest potential return to creditors and shareholders. Ocean Tomo’s goal for both traditional and distressed clients is: “To identify for its clients relevant strategic and financial alternatives relative to their intellectual property assets, advise on the most appropriate alternative, and employ a transactional process which utilizes Ocean Tomo’s proprietary expertise and tools to create incremental value.” Whether working at the corporate or at the asset level, Ocean Tomo unlocks intellectual property value and identifies opportunities in the target’s intellectual property through sophisticated and proprietary analytical tools. Building on a legacy of innovation, Ocean Tomo offers transaction execution and capital solutions that cannot be found elsewhere. Ocean Tomo also provides standard investment banking services applicable to traditional and distressed M&A transactions, including company and industry financial analysis, strategic and tactical advice, valuation, identification of prospective buyers, evaluation of prospective targets, coordination of other expert services (e.g. legal and accounting) and efficient execution. Moreover, through the cross-border skills and experiences of its professionals, Ocean Tomo can provide unique valueadded services to both foreign purchasers of intellectual property assets and intellectual property-centric businesses. 6

CREATING SYNERGIES
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INTELLECTUAL CAPITAL EQUITY

TRADITIONAL M&A ADVISORY SERVICES
In the course of a transaction, Ocean Tomo helps realize asset value through our industry-leading understanding of the strategic importance of intellectual property portfolios. By identifying companies with overlapping intellectual property, Ocean Tomo discovers potential strategic partnerships, licensees and/or buyers who will pay premium values for strategic intellectual property portfolios. Process Conduct IP landscape analysis Prepare marketing materials Identify and screen (qualification) of strategic and/or financial acquirers/targets Conduct in-depth analysis of IP portfolio and potential IP related issues Coordinate with legal counsel on transaction structure Ocean Tomo’s due diligence review involves a survey of the client’s overall industry position and business plan and may also include the following: IP Valuations – A statistical value assessment of the IP or patent portfolio on a stand-alone basis; Patent Analysis - A review of the strengths and weaknesses of portfolio patents with regard to vital patent characteristics such as forward and backward citations, patent ages and patent claims; Competitive IP Assessments - A review of the IP portfolios of key competitors and customers; Industry Licensing and Litigation - An assessment of the litigation and licensing industry environment; Inventor Analysis – An assessment of the key inventors and patent attorneys behind IP technologies both at portfolio companies and at competitors.

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NAVIGATING M&A CHALLENGES
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INTELLECTUAL CAPITAL EQUITY

TRADITIONAL M&A ADVISORY SERVICES
Ocean Tomo’s Corporate Finance Group assesses not only the current positioning of our client’s intellectual property, but also the forward-looking potential for strategic opportunities such as: Sale Alternatives - Assess whether there is an ability to sell discrete intellectual property assets in an efficient market clearing manner; Licensing Alternatives to Sale - Assess whether there is an ability to license discrete intellectual property assets outside of core markets in a non-assertive manner in an effort to generate additional high margin licensing revenue; Other Financing Options - Assess whether a company's IP portfolio provides any non-traditional financing alternatives, including securitization of royalty streams; Strategic Asset Acquisitions - Assess whether the company has the option to acquire intellectual property assets that strategically complement or enhance its competitive position. For instance, a company could purchase or license patents from inventors or universities that are not currently commercializing those patents; Software License and Platform Monetization – Assess whether internal software platforms and applications developed by a company can be utilized to realize value. Also assess whether third-party software licenses no longer required by a company can be monetized.

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REALIZING THE VALUE
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INTELLECTUAL CAPITAL EQUITY

DISTRESSED M&A ADVISORY SERVICES
Ocean Tomo’s Distressed M&A Advisory Services leverage its M&A Advisory expertise to focus on intangible asset valuation and disposition for distressed and bankrupt companies. Ocean Tomo's M&A professionals specializing in distressed situations have significant advisory experience in a wide variety of industries. Such experience includes structuring, negotiating and consummating distressed transactions on behalf of the company, creditors, shareholders and other parties. Our Distressed M&A Advisory Service professionals support clients by combining the following services with the services to be provided in traditional M&A Advisory Services: Consummating Section 363 transactions; Consummating other distressed transactions; Acting as liquidation consultants (e.g. providing expertise and financial modeling); Assisting in financing/refinancing of recapitalization; Representing acquirers of distressed companies; Conducting negotiations with potential acquirers; Assisting in offer valuation; Assisting in execution of sale process.

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PROVIDING A HELPING HAND
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INTELLECTUAL CAPITAL EQUITY

SYNERGIES ACROSS PRACTICES
Other Ocean Tomo Practices are always prepared to work with the Corporate Finance Group to realize synergies and bring maximum value to our clients.

BRAND-RELATED INTELLECTUAL PROPERTY
Brands are increasingly important in the global economy as consumers seek trusted points of reference. Through an affiliate, Ocean Tomo identifies, acquires and licenses brand-related intellectual property, and has established affiliations with specialty firms that acquire trademarks and other brand-related properties, lending a unique position to assess and realize value from a client’s brand-related assets. Ocean Tomo monitors the marketplace over extended economic cycles to identify and potentially acquire underutilized and abandoned brands on behalf of clients or affiliated accounts. Such established assets represent a pure form of Intellectual Capital Equity and may be used to accelerate market entry and penetration.

MEZZANINE DEBT FINANCING AND PRIVATE EQUITY GROWTH CAPITAL
The Ocean Tomo Capital Fund is the first and only Fund dedicated to investing mezzanine debt and private equity growth capital in companies with a strong intellectual property portfolio, solid revenues and cash flows, experienced management and high growth potential. For this purpose Ocean Tomo has secured $200 million in limited partnership commitments for the Ocean Tomo Capital Fund. The Ocean Tomo Capital Fund targets companies and financial sponsors looking to finance business expansion, acquisitions, buyouts and recapitalizations as well as supplement or replace existing senior debt and private equity investments.

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MEASURE THE WORTH
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INTELLECTUAL CAPITAL EQUITY

REPRESENTATIVE RECENT TRANSACTIONS
Company Description of Transaction

Ocean Tomo represented Commerce One, a bankrupt software and web services company, in a 363 sale process of Web Services patents and software businesses and, utilizing a structured license agreement, generated $15.5mm in incremental value from the patent portfolio increasing the overall value of the transaction to $19.6M. Ocean Tomo represented bankrupt companies Breuners Home Furnishings, Huffman Koos, Wayside and Goods Furniture to inventory and conduct an orderly liquidation of intangible assets, including trademarks and service marks, trade secrets, proprietary software systems, third party software license and digital content. Ocean Tomo represented Limited Brands, Inc., in the sale of the Structure® trademark to Sears Roebuck and Co. for use as an exclusive, in-house clothing brand. Ocean Tomo represented Genex Technologies, Inc., in the sale of its three-dimensional, imaging technology to Markland Technologies, Inc., a German strategic buyer who recognized the value inherent in the seller’s intellectual property. Ocean Tomo represented this company in a confidential sale of three issued/pending patents covering ISP-to-ISP data migration, its only saleable assets, to an acquirer with a complementary intellectual property portfolio.

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PROVEN SUCCESS

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INTELLECTUAL CAPITAL EQUITY

WHY SELECT OCEAN TOMO?
Ocean Tomo offers distinct and unparalleled advantages: We have unique, intellectual property M&A experience to facilitate and execute efficient, market clearing transactions for our clients We have significant knowledge within the legal and procedural frameworks related to bankruptcy and distressed transactions for both assets and businesses We focus on Intellectual Capital Equity – this dedication brings unique, invaluable insights and experiences to the Corporate Finance Group We are entrepreneurial in our thoughts and our responsiveness to clients With practitioners in various practice areas, Ocean Tomo has the expertise to address each of our client’s needs, whether that includes IP in transaction, M&A, risk management or litigation We are not only advisors, but in the right circumstances, we may also put our own money behind a transaction

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THE WINNING MOVE
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INTELLECTUAL CAPITAL EQUITY

OCEAN TOMO PROFESSIONALS
FREDERIC D. FLOBERG
PH (312) 377-4833 EMAIL: [email protected]

Frederic D. Floberg is a Managing Director at Ocean Tomo's Chicago office, with senior responsibility for the firm's Corporate Finance group. As one of the senior members of the firm he is primarily responsible for the origination and execution of M&A transactions and other financial advisory assignments for Ocean Tomo's existing clients and for other companies. Mr. Floberg has more than twenty years experience in investment banking in general and in mergers and acquisitions in particular. He has represented a broad range of clients and has diverse transaction experience including cross-border and domestic transactions, small to mid-capitalization enterprises and public and private companies. Prior to coming to Ocean Tomo, he was a Managing Director of Heller Financial, Inc. a GE Capital Company, and the co-head of the M&A department. His previous position had been Senior Managing Director of ABN AMRO Incorporated. At ABN AMRO he was head of the M&A department which completed more than 100 M&A transactions representing over $10 billion in value in a four-year period. Prior to ABN AMRO, Mr. Floberg had been a Managing Director at The Chicago Dearborn Company, First Chicago Corporation and Smith Barney. Prior to his investment banking career, he had been a partner in a large Chicago law firm specializing in complex litigation and corporate law. He served as a line officer in the U.S. Navy. Mr. Floberg holds an M.B.A. from the University of Chicago Graduate School of Business, a J.D. from Northwestern University School of Law and a B.A. from Dartmouth College.

NATHAN D. CANN

PH (312) 327-4414

EMAIL: [email protected]

Nathan D. Cann is a Director in the firm’s Corporate Finance Group, in the Chicago headquarters. Mr. Cann began his professional career with KPMG Peat Marwick as an auditor before being asked to join the corporate services division of Deloitte & Touche where he specialized in mergers and acquisitions, corporate recovery and restructurings. Mr. Cann also founded a consulting practice assisting underperforming companies become market leaders and then assisting them with restructuring to capitalize on the improved management techniques that had been implemented. Clients were in the transport, waste management, high technology and wine-making industries. One of these clients diversified into investment banking and Mr. Cann was instrumental in conducting prospect identification, purchase evaluation, assisting in financing, changes in business practices of successful purchases and the divestiture of companies from the portfolio. In 1998, Mr. Cann joined Development Specialists, Inc., one of the world’s leading turnaround firms. At DSI, Mr. Cann worked in bankruptcy, restructuring and interim management positions with clients that included Mercury Finance, Commercial Financial Services, AgriBioTech, Wallace’s Bookstores, Gingiss Formalwear (including Gary’s Tuxedos) and AmeriKing. In addition to being a member of the American Bankruptcy Institute and the Turnaround Management Association, Mr. Cann is currently completing the requirements to become a Certified Public Accountant in the State of Illinois. He has an undergraduate degree in business with a major in public accounting and a Master of Business from the University of Notre Dame Australia.

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DEDICATED INSIGHT
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“We are uniquely positioned, through our experienced professionals and our proprietary resources to assist in realizing value in M&A transactions with significant Intellectual Property assets.”
FREDERIC D. FLOBERG
MANAGING DIRECTOR

WWW.OCEANTOMO.COM
CHICAGO 200 West Madison 37th Floor Chicago, IL 60606 (312) 327-4400 Ph (312) 327-4401 Fx DC METRO 4630 Montgomery Ave. 3rd Floor Bethesda, MD 20814 (240) 482-8200 Ph (301) 652-2885 Fx GREENWICH Two Sound View Drive Greenwich, CT 06830 (240) 482-8200 Ph (301) 652-2885 Fx ORANGE COUNTY 19900 MacArthur Blvd Suite 1150 Irvine, CA 92612 (888) 295-7007 Ph (949) 222-1265 Fx PALM BEACH 400 Royal Palm Way Suite 100 Palm Beach, FL 33480 (561) 309-0011 Ph (561) 835-0003 Fx SAN FRANCISCO 251 Kearny Street 8th Floor San Francisco, CA 94108 (415) 946-2600 Ph (415) 946-2601 Fx

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