TheCorporateCounsel.net

June 15, 2005

Disclaimers in the Wake of the SEC’s Titan Section 21 (a) Report

Buried in a recent Proskauer Rose memo on the SEC’s Titan Report is a reference to a filing that included a disclaimer about whether investors should rely on the reps and warranties in the attached agreement. The memo didn’t identify the filing – but it led me to conduct some sleuthing and I found this recent Form 8-K filed by Shopping.com with the following disclaimer:

“The description of the proposed Merger described in this report does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 to this report and incorporated herein by reference. The Merger Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Shopping.com. The Merger Agreement contains representations and warranties the parties thereto made to and solely for the benefit of each other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Merger Agreement. Accordingly, investors and security holders should not rely on the representations and warranties as characterizations of the actual state of facts, since they were only made as of the date of the Merger Agreement and are modified in important part by the underlying disclosure schedules. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Shopping.com’s public disclosures.”

And here is a disclaimer from the cover of a merger agreement filed as an appendix to the proxy statement/prospectus in this Form S-4 filed by Renaissance Learning:

“The merger agreement contains representations and warranties Renaissance and AlphaSmart made to each other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that Renaissance and AlphaSmart have exchanged in connection with signing the merger agreement. While neither Renaissance nor AlphaSmart believe that the disclosure schedules contain information that the securities laws require to be publicly disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached merger agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since they are modified by the underlying disclosure schedules. These disclosure schedules contain information that has been included in Renaissance or AlphaSmart’s prior public disclosures, as well as potential additional non-public information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, which subsequent information may or may not be fully reflected in each of Renaissance or AlphaSmart’s public disclosures.”

Not sure if either of these are from the filing that Proskauer found as there likely other disclaimers out there, but there probably are not too many yet as Corp Fin Director Alan Beller and other Staffers have warned the bar not to include disclaimers in their SEC filings that are too broad or general – and practitioners are just starting to feel their way around in this area (see my April 5th guest entry on The Deal Guys’ Blog and OMA Chief Brian Breheny in the March webcast on DealLawyers.com). Note that the Shopping.com disclaimer was included on an 8-K – and therefore it probably has not been reviewed by the SEC Staff.

NYSE’s Roundtable Recommendations on 404

In late May, the NYSE hosted a roundtable discussion for CFOs of its listed companies to develop practical recommendations that will better align the costs and benefits of Section 404. From the roundtable, four central themes emerged: allowance for use of management judgment, efficiency in the audit approach, recommendation for PCAOB process and procedure improvements, and timing of SEC reporting – as well as these specific recommendations that were ranked by the participants and sent to the PCAOB and SEC.

Hand-Deliveries and Pick-Ups for New SEC HQ

The SEC has posted instructions on how to make hand-deliveries to – and pick-ups from – the SEC’s HQ.

How to Navigate Tricky Confidential Treatment Requests

Don’t forget to tune in for tomorrow’s webcast – “How to Navigate Tricky Confidential Treatment Requests” – during which a pair of SEC Staffers, Corp Fin Deputy Director Shelley Parratt and Branch Chief Suzanne Hayes, and a group of practitioners that specialize in confidential treatment requests will deconstruct how to best prepare CT requests – which is an art more important than ever now that SEC comment letters and responses are posted on the SEC’s website.