The following recommendations have been organized by deal participant. The contributions of all four major participant groups, issuers, institutional purchasers, placement agents and special purchasers counsel, have been analyzed. While there is no specific category for the issuer's counsel, the specific recommendations concerning the selection of issuer's counsel emphasize the critical role played by that party. The Committee recognizes that the time and cost efficiency of the documentation process depend on the diligence, commitment and cooperation of all of the participants.

There are a few general themes flowing through these proposals. One of the Committee's findings was that the better the parties understand the business deal prior to documentation, the smoother the process to closing will proceed. Thus, we believe that extra care in term sheet drafting and review by issuers and purchasers will save frustration, time and money. This may require that placement agents and purchasers alike consider decelerating the circle process enough to ensure that the parties really do have a meeting of the minds on all of the business terms that matter to them. A corollary to this finding is that once the issuer and purchaser arrive at a deal, they both need to live with it. There may be instances where it is appropriate for the business deal to evolve throughout the documentation process, but we believe this should not be the general rule. Another major theme is that accurate and timely communication among the participants will improve the efficiency of the process. In general, this is probably self-evident; however, our specific recommendations encourage all participants to consider varying means of communication, such as written comments, during the negotiation and documentation processes.

Finally, the recommendations are provided for all parties consideration in general and are not intended to serve as a mandatory checklist for any given transaction. Various recommendations may not be appropriate for a particular participant or may not fit the circumstances of a particular transaction. We recognize that a key advantage of the private market is the ability of the participants to structure deals to meet their respective needs and to structure a process to the same end. However, our experience indicates that some transactions proceed without such choices being made. Our goal in this booklet is to enable the participants to make more informed process choices - using these recommendations - so that actual transaction procedures will better serve their interests.

Purchasers

Encourage Advance Legal Review of Term Sheets

Promote internal legal review of each term sheet prior to circle. An advance review by internal counsel may highlight material issues earlier in the process and serve to reduce surprises and corresponding delays in the documentation process.

Increase Deal Responsibility

Each purchaser, particularly the lead purchaser, should feel individually responsible for the management of the documentation and closing process and should effectively delegate appropriate responsibility to special counsel. All necessary and appropriate internal resources should be dedicated to the post-circle documentation process to promote an effective follow-through effort toward closing and funding. Purchasers should encourage the placement agent to schedule the due diligence conference promptly after circle.

Adhere to the Term Sheet

Purchasers should make every effort to raise all business points at the term sheet stage and avoid introducing new business terms in the first or subsequent drafts of the purchase agreement (covenant creep). It is important that the first draft of documentation accurately reflects the negotiated business deal.

Special Counsel Selection

Promptly after circle the lead purchaser should consult with the other purchasers and select special counsel appropriate for the transaction. Delays in selection of special counsel extend the closing timeline and should be minimized.

Supplemental Information

Consider whether under the circumstances special counsel should receive any supplemental information relating to the issuer and the transaction obtained by the purchasers which may be relevant to the preparation of the documentation or the representation of the purchasers.

Increase Direct Business Communication

Consider, where necessary and appropriate, direct dialog among the business people to facilitate and expedite issue resolution.

Individual Purchaser Involvement

Establish the nature of individual purchaser involvement in the transaction process at the initial stages of documentation and communicate such involvement to special counsel at the inception of the documentation process.

Purchaser Review of First Draft

Consider whether all purchasers should receive and review the first draft documentation in lieu of a prior review by a lead group of purchasers. In the event lead purchasers request prior review, such request should be communicated to all purchasers and special counsel.

Additional Memorandum Copies

Obtain extra copies of the offering memorandum prior to the circle for distribution to internal counsel, special counsel and regulatory agencies.

PURCHASERS SPECIAL COUNSEL

Pre-Draft Conference Call

A pre-first draft conference call among purchasers investment professionals, internal counsel and special counsel should be considered to resolve ambiguities in and/or update the term sheet. During such call, inconsistencies in the purchasers understanding of the business deal may be identified and resolved prior to the significant preparation of documents by special counsel in order to improve the quality of the first draft of documentation forwarded to the issuer.

Timeline

After consultation with the purchasers and the placement agent, special counsel should establish and disseminate a detailed schedule or timeline for the completion of each phase of documentation, including identification of responsibility of delivery of each item. Exhibit A presents a suggested form of transaction timeline.

Annotated Term Sheet

As an aid to all participants review of the agreements, special counsel should include an annotated term sheet with the first distribution of documents sent to each purchaser and the issuer in the transaction. The annotated term sheet should indicate the specific sections and clauses of the agreement which contain the term sheet provisions.

Key Points Letter

Special counsel should prepare and include with the first distribution of documents to the purchasers a letter detailing the key points, open issues and ambiguities which surfaced during the preparation of the first draft.

Communication During Documentation

All substantive business, legal and structural developments occurring during the documentation process and any deviations from the transaction timeline should be communicated by special counsel to all participants promptly. Furthermore, special counsel should provide periodic updates to the issuer with respect to any developments that may affect the amount of special counsels fees.

Initial Purchaser Comments

Special counsel should collect the purchasers' comments in an efficient manner to promote prompt distribution of the first draft of the agreements to the issuer. Special counsel should discuss with the purchasers whether it would be advantageous and appropriate to request the delivery of purchaser comments to special counsel in writing.

Initial Issuer Comments

Issuer's counsel should be encouraged to transmit issuer comments in writing so that such comments, together with special counsel's recommendations with respect thereto, may be communicated to the purchasers quickly and efficiently.

PLACEMENT AGENT

Special Transaction Counsel for Issuer

Encourage the issuer to select special transaction counsel experienced in private placement transactions. Experience promotes efficiency. Traditional issuer counsel, while sophisticated in their clients' business, may not have sufficient experience with the documentation traditionally employed in a private placement. Such unfamiliarity generally adds delay and additional expense to the process. The retention of special transaction counsel by the issuer may serve to reduce overall legal fees and shorten the documentation process.

Familiarize Issuer with Process

Familiarize the issuer with the documentation process by explaining the course of the documentation process, the timing associated with the process and the information which is likely to be requested during the process.

Understand Organization and Capitalization Structure of Issuer

A clear understanding of the organization and capitalization structure of the issuer, including a complete legal explanation of the structure of the issuer's existing debt instruments, should be communicated in the offering memorandum and the term sheet. Increased attention should be paid prior to finalization of the term sheet to the potential for structural subordination of the proposed investment vis-a-vis the existing credit facilities of the issuer and the placement agent should advise the participants of any such issues.

Thorough Review of Transaction Structure

Make certain that the proposed structure of the transaction is clearly delineated in the term sheet. A brief, accurate description of collateral, if any, should be clearly stated as well as any business agreement reached with respect to intercreditor issues. All relevant parties to the transaction, i.e., issuers, guarantors, co-obligors, trustees, agents, etc., should be specifically described.

Term Sheets

Term sheets should be concise, should be clearly drafted and should highlight any unusual provisions. Purchasers should be afforded sufficient time to thoroughly review a term sheet prior to circle. This will minimize misunderstandings which negatively affect thedocumentation process. Issuers should be made aware that, since a term sheet is an outline of agreed-upon material business terms and does not represent an executable comprehensive contract, the use of the purchasers' traditional form of agreement is implied.

Placement Agent Involvement

Establish nature of placement agent involvement in transaction process at initial stages of documentation and communicate such involvement to special counsel, the issuer and the purchasers at inception of documentation process.

Closing Date

Establish appropriate closing date among the issuer and the purchasers at circle. Convey the closing date to special counsel and request special counsel to prepare and distribute a schedule/timeline consistent with such selected closing date.

Due Diligence Materials Delivered at Circle

Request that the issuer provide legal due diligence materials, including existing debt agreements, to special counsel immediately after circle. This will improve the accuracy of drafts and lead to identification of issues earlier in the process. Exhibit B sets forth a suggested list of initial legal due diligence materials which should be requested at the circle stage.

Expense Letter at Circle

The issuer should provide a letter agreeing to pay special counsel's fees to facilitate commencement of drafting immediately after circle but prior to investment committee approvals of any or all purchasers. Exhibit C includes a sample expense letter.

Due Diligence Scheduling

Schedule due diligence meeting among investment professionals of the purchasers' immediately after circle. Provide for realistic opportunity for purchasers analysts to absorb information and ask follow-up questions during the due diligence session in order to expedite completion of underwriting.

ISSUER

Review Corporate Organization and Authorization

The issuer and its counsel should review its charter, by-laws, minutes, etc., prior to documentation to confirm that the transaction has been properly authorized and that all relevant corporate matters of the issuer, including the election of the proper number of directors, the due election of all signing officers and the good standing of the issuer, are in proper order.

Consents and Approvals

Prior to the circle, the issuer and its counsel should begin the process of obtaining all necessary regulatory consents and approvals which are required to consummate the proposed transaction. In addition, all credit agreements of the issuer should be reviewed to confirm that the transaction is permitted under such agreements and any required creditor consents should be identified and obtained.

Special Transaction Counsel for Issuer

The issuer should retain special transaction counsel to represent it in connection with the documentation process in the event that its traditional counsel is not sufficiently experienced with traditional private placement documentation. Doing so will almost invariably reduce overall transaction costs and facilitate a prompt and orderly closing.

Due Diligence

The issuer should familiarize itself with the types of documentation used in private placements. A good starting point is the Model Note Agreements prepared by the Private Placement Enhancement Project and various private placement educational seminar materials such as the private placement course handbook published by the Practising Law Institute which also includes a sample note agreement for institutional private placements. The PLI private placement course handbook may be ordered by contacting the Customer Service Department of the Practising Law Institute, 810 Seventh Avenue, New York, NY 10019, telephone (800) 260-4754,fax (800) 321-0093 and requesting the most recent Private Placement course handbook.

Draft Distributions

Numerous drafts of the basic agreements delay the transaction and increase its cost. The issuer may significantly reduce the number of draft distributions by submitting all substantive legal and business points in writing to special counsel following review of the first draft and minimizing the raising of new comments during the documentation phase (comment creep). Ideally, the private placement agreement should be substantially complete after two drafts. The issuer should instruct its counsel to thoroughly review all aspects of the agreement (i.e., environmental, ERISA, tax, etc.) at the time it reviews the first draft.

ALL PARTICIPANTS

Up-Front Commitment

Dedicate more time and energy to the transaction in the earlier stages of the process rather than the later stages.

Improve Communications

Review internal methods of communication among investment professionals, internal counsel and special counsel for improvement.

Staffing

Assign knowledgeable backup support for each individual involved in the documentation in the event that scheduling and other commitments conflict with the transaction process.

EXHIBIT A - FORM OF TRANSACTION TIMELINE

EXHIBIT B - INITIAL LIST OF DUE DILIGENCE MATERIALS

EXHIBIT C - SAMPLE EXPENSE LETTER