New Law May Make Foreign Acquisitions of U.S. Companies More Difficult According to George M. Foote of Bracewell & Giuliani

October 24, 2007 is the effective date of a new law that may
sharply increase the potential for political controversy over foreign
investment in the United States.

The Foreign Investment and National Security Act of 2007 (FINSA)
increases the power of the American President to block a foreign
acquisition on national security grounds. A recommendation to block an
acquisition can be made by the Committee on Foreign Investment in the
United States (CFIUS), an interagency body of the U.S. government.

FINSA reflects heightened concern over potential national and
homeland security issues associated with foreign acquisitions of U.S.
companies. The new law also opens up the review and investigation
process for foreign acquisitions to many new parties, including
Congress, advocacy groups, labor unions and competing bidders for
acquisition targets.

"While the American economy remains largely open to foreign
investment, the new law increases the risk that domestic political
considerations will influence the approval or rejection of a foreign
bid to acquire an American company," said George M. Foote, partner
with Bracewell & Giuliani LLP. "Recognizing the importance of foreign
investment in the U.S., Congress and the Administration have
emphasized that their intent is not to let the new law disrupt or
block routine foreign investments and acquisitions. The new law will,
however, raise the cost and lower the chance for approval of some
foreign acquisitions and could discourage or defeat some investments."

The new law was drafted to provide protection from terrorism and
specifically includes homeland security in the definition of national
security. It also widens the range of companies that might be subject
to protection from foreign acquisition. Protected assets might include
pipelines, telecommunications systems, waterworks, food supply
networks, and high technology companies.

Under FINSA, any merger or acquisition that could result in
foreign control of an entity engaged in U.S. interstate commerce may
be reviewed by CFIUS for national security concerns. The results of
CFIUS reviews and investigations must be provided to Congress.
Including Congress in the process will increase public scrutiny of
deals and will enable domestic private and political parties --
including labor unions, activist groups and competitors for the
acquisition target -- to pursue their own agendas in supporting or
opposing a deal. Politicized conflicts and controversies could delay
or even derail transaction approvals.

"In practice, the new CFIUS process should not significantly
discourage international transactions in America," Mr. Foote said.
"The United States will continue to welcome foreign investment.
However, domestic U.S. companies, potential foreign acquirers,
investors and financiers will have to carefully follow development of
the new CFIUS regulations in the coming months. Any investment in
America now must be planned to minimize the risks in the CFIUS process
and with due regard for the political influences that could interfere
with the transaction."

About Bracewell & Giuliani LLP

Bracewell & Giuliani LLP is a prominent international law firm.
With more than 400 lawyers in Texas, New York, Washington DC,
Connecticut, Dubai, Kazakhstan and London, we serve clients
concentrated in the energy and financial services sectors worldwide.
In 2005, former New York City Mayor Rudolph W. Giuliani joined the
firm as a senior partner. His reputation for leadership and problem
solving is a unique asset for our clients, which include Fortune 500
companies, major financial institutions, leading private investment
funds, governmental entities and individuals. For more information
about Bracewell, visit www.bgllp.com.