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When credit was easy, private equity's multibillion-dollar buyout frenzy was like a great party: The champagne was flowing and no one was too concerned about who was picking up the tab.

After the summer's credit crunch, the party ended. Some deals collapsed. One that may survive is the buyout of the radio-station chain Clear Channel Communications after the private equity buyers and six banks reached a settlement this week over $22 billion in financing.

In the sober light of today, are there lessons for dealmakers from Clear Channel?

Yes, lawyers say.

"We need to look at ways to get the financing lined up and locked in sooner—potentially right away, right after or before the merger agreement," says Marilyn Sonnie, a partner with the New York office of Jones Day, who advised Harman International on its failed buyout with Kohlberg Kravis Roberts & Co., which was terminated last August.

In the case of Clear Channel, the financing for the deal was memorialized in a May 2007 commitment letter that left open many terms, heading toward a closing.

By late fall and winter, those open terms, according to Clear Channel and the two private equity firms sponsoring the leveraged buyout, became an opportunity to inject "poisonous terms" to jettison the financing deal. Two lawsuits in New York and Texas followed.

Defending the lawsuits, the six banks, led by Deutsche Bank and Citigroup, were put in the bizarre position of arguing that their standard operating procedure—the use of a commitment letter to memorialize financing—could not be enforced.

The New York case sought to hold the banks to $22 billion in financing—"specific performance" in the legal jargon. In one deliciously schizophrenic line, the banks' motion seeking summary judgment dismissing the claims said: "The commitment letter is a binding preliminary agreement that left open numerous terms to be negotiated over time by the parties." It is Contracts 101 that an agreement with open terms is an illusory contract. Leaving the law aside, taken away from the litigation, the argument has the hint of commercial suicide for its relationships in the marketplace.

The banks were confident that they were going to win the summary judgment motion, but Justice Helen Freedman of the New York State Supreme Court said that the breach of contract claims could go to trial. But her opinion pretty much evenly divided the risks of going to trial between both sides. She described the plaintiffs' evidence that the defendants had threatened to refuse to finance the deal unless they agreed to "poisonous" terms as "not compelling."

The deal lawyers who read her May 7 opinion had one word for it: She wrote a "settlement document." It offset the early wins by Clear Channel in the Texas case, accusing the banks of "tortuous interference" with the merger agreement—a claim with potentially unlimited damages, filed in the state known for the landmark Pennzoil verdict. (Clear Channel even tapped Joe Jamail, who won the $11 billion Pennzoil case in 1985, as its lead counsel. For a peek at Jamail in action, watch this video.)

By Monday, May 12, Freedman's tactic seemed to have worked. Court was adjourned and CNBC's David Faber reported on a deal to settle the litigations. The next day at 2 p.m., the plaintiffs' first witness, John Connaughton, a managing director at Bain, took the stand and offered a rare glimpse into the private equity world, suggesting the banks were off the reservation, especially in changing language known in the industry as "sponsor precedent," lingo for "terms customer" in these deals.

The clean-cut Connaughton, whose youthful appearance does not show the stress of 19 years in private equity at Bain, was a strong witness on direct, and offered plain English translations of the language of private equity to Freeman with ease. (Even though he had not slept in two nights.) Connaughton would have returned to the stand Wednesday morning to testify that the banks had drawn a line in the sand, restricting use of loan proceeds to pay off Clear Channel's preexisting debts.

But that never happened. The $36-per-share deal, down from the original $39.20-per-share deal, signed late Tuesday night requires the banks and the buyers to put cash into an escrow account to fund the deal while Clear Channel seeks shareholder and regulatory approvals.

An escrow fund is probably an unrealistic option for obtaining certainty outside the context of litigation. But other aspects of the amended deal, as memorialized in an Securities and Exchange Commission filing by Clear Channel on Wednesday, could be adopted by other deals, to make sure they in fact close in a timely fashion. For instance, Clear Channel shareholders will get an increased price if the deal closes after the third quarter.

But lawyers predict the protracted battle will alter the way the players approach these deals in the future: "The way the litigation arose and was concluded will have implications regarding the way in which lenders and private equity firms structure the terms of the debt in future transactions and the way in which the parties—sellers, private equity buyers and lenders—will protect themselves from uncertainty until closing," says Michael Hefter, a securities lawyer with the New York office of Orrick.

But Elizabeth Nowicki, a corporate law professor at Tulane Law School, is not so sure how much things will really change. "A target now knows they need to get something more specific from a bank than a commitment letter," she says.

On the other hand, "the banks want no specific performance" from their end. "The question is whether we are going to see any change. I don't know if we are going to end up with documents or deals that are more clear. This case has highlighted that there is so much room for play and ambiguity and litigation."

It has been a long 18 months since the Clear Channel deal was announced, time in which its management and employees have been districted and its stock has inched down. "It's very hard to run a company and focus on making profits when you are in limbo," says Jones Day's Sonnie.

And Nowicki, for one, doesn't even think the saga is yet over.

"This deal may never close," she said.

1960: Physicist Theodore Maiman uses a synthetic-ruby crystal to create the first laser.

Maiman began tinkering with electronic devices in his teens and even earned college money repairing appliances and radios. He was working at the Hughes Research Laboratories of the Hughes Aircraft company in Malibu, California, when he built the first working laser.

The laser is a device that produces monochromatic (all the same wavelength), coherent (all the waves in phase) light. Today they're used in eye surgery, dentistry, range-finding, astronomical measurement, and welding and other manufacturing uses. You'll find them at the heart of scientific instruments, communications networks, weapons, music systems and supermarket scanners. Lasers are everywhere.

The concept was already bouncing around in the research world in 1960. Arthur L. Schawlow of Bell Labs and Charles H. Townes of Columbia University had written a 1958 paper and patent application proposing an optical version of the maser, or microwave amplification by stimulated emission of radiation.

Columbia grad student Gordon Gould jotted the idea in his notebook in 1957 and applied for a patent in 1959. He'd delayed because at first he thought he needed a working apparatus to apply. But it was Gould who coined the word laser.

Maiman made his own alterations to the Schawlow-Townes concept. He coated the ends of a ruby with silver mirrors, one coating thinner to let some light escape as a beam. He used a flash tube to energize the crystal's atoms. Maiman enclosed the whole shebang in a polished aluminum tube.

Schawlow and the Bell researchers heard of Maiman's realization of their concept with mixed emotions, but they soon bested him by using an arc lamp to produce a continuous, rather than pulse, laser.

Bell got its patent in 1960. Maiman applied for a patent for "Ruby Laser Systems" in 1961, but didn't receive it until 1967. Gould spent decades mired in lawsuits before winning some patents in 1977.

The 1964 Nobel Prize in Physics went to Townes for the laser and Soviets Nicolay Basov and Aleksandr Prokhorov for their earlier work on the maser. Schawlow was acknowledged in the 1964 presentation speech and went on to share the 1981 Nobel Prize in Physics for his "contribution to the development of laser spectroscopy."

Maiman was nominated twice for the Nobel Prize, but did not win it. He received many other awards before his death in 2007 at age 79.

Source: Scientific American

Lasers are like your favorite uncle who can do no wrong. You know, the one who's always hip to the latest technology, does amazing magic tricks at all the family dinners, always photographs well, and has more than once saved baby Med-Tech from a burning house of boring. All the other technologies wish they were he, and Wired.com readers openly admit he's their favorite.

So in celebration of one of our greatest news topics here at Wired.com, we've selected a compilation of the best recent laser appearances on our site. Thanks for the memories, Big L. (Have your own favorite laser news item? Let us know in the comments.)

Left:

Texans Build World's Most Powerful Laser

Scientists have switched on the world's most powerful laser, which for one-trillionth of a second is 2,000 times more powerful than all the power plants in the United States. The laser's output tops a petawatt, which is a quadrillion (1,000,000,000,000,000) watts of power.

(More in next slide)

Photo: Courtesy Mikael Martinez and Texas Petawatt Project, led by Todd Ditmire

(Continued from previous slide)

The power of a laser, its output in watts, is determined by the energy of the laser pulse, measured in joules, divided by its duration, measured in seconds (tiny fractions of a second in this case). So, to get high power, you can either turn up the energy or cram the same amount of energy into a shorter duration pulse -- or do both. The problem is that turning up the energy makes it more difficult to get short pulses.

The solution to this problem requires an almost Rube Goldberg setup inside a 1,500-square-foot clean room. The most powerful laser in the world starts, poetically enough, with a "seed laser" that puts out a wimpy nanojoule of energy for a couple of hundred femtoseconds (that's 10^-15 seconds). It must be run through a series of amplifiers, compressors and stretchers before it can recreate the conditions inside the sun for a trillionth of a second.

Photo: Courtesy Mikael Martinez and Texas Petawatt Project, led by Todd Ditmire

Beamz Music System Lets You Compose a Symphony With the Power of Freaking Lasers

If Dr. Evil of Austin Powers fame were more musically minded, he may have demanded something like the beamz -- a musical instrument with "fricking lasers" attached to it. This large USB peripheral includes six laser beams that, when broken, activate elements of 30 songs stored on your computer.

Laser-Etched QR Codes: Digital Graffiti For Gadgets

Forget stickers. Real geeks show their commitment with something more permanent: laser engraving. And Jason Fields takes your etching and raises you one QR code. Sure, it's too big for most little QR readers to handle, and the gray on gray isn't exactly contrasty, but Jason has squeezed in his "e-mail signature file, postal address, with links to my blog and twitter pages as well."

The Geekiest Van Conversion Ever

This is the Tele Atlas map machine, a Toyota van tricked out with tens of thousands of dollars worth of cameras, laser range detectors and global-positioning hardware. The laser sensors on the back (the devices labeled SICK) are used to determine the height of overpasses and buildings to help delivery vehicles find the route with the most overhead clearance.

Photo: Michael Calore/Wired.com

The Ultrashort Pulse Laser in Action

Raydiance, a startup company in Petaluma, California, has developed a laser it says can cleanly cut just about any material you can think of -- from human skin to glass -- without throwing off heat or damaging the surface.

This glass slide is seconds away from being ablated by the Raydiance USP laser.

Photo: Jonathan Snyder/Wired.com

:

Laser Death Star

A new patent granted to Lockheed Martin seeks to combine multiple lasers into a single, higher-power beam, which would, in theory, help achieve the power output needed for laser weapons. The patent outlines a method to "combine multiple laser beams into a single coherent beam without requiring insertion of optical elements into the laser beam."

:

This Laser Trick's a Quantum Leap

Ph.D. student Elliot Fraval (left) and Dr. Jevon Longdel perform scientific measurements on light in the lab at Laser Physics Centre at Australian National University.

Photo: Tim Wetherell

:

Navy Pushing Laser 'Holy Grail' to Weapons Grade

For decades, scientists have been slowly working on a laser that never runs out of shots -- and can be "tuned" to blast through the air, at just the right wavelength. For most of that time, all they could get was a laser at light-bulb strength. But researchers at the Thomas Jefferson National Accelerator Facility finally managed in 2004 to assemble a "Free Electron Laser," or FEL, that could generate 10,000 watts of power.

Now the Navy has started an effort to design and build a new FEL, 10 times as strong. That would bring the laser up to 100 kilowatts -- what's considered the minimum threshold for weapons grade. But it would also be just a steppingstone on the way to an energy weapon as powerful as any produced. If ray gun researchers can get the thing to work, that is.

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Stupid Laser Tricks: Make Your Own Piece of Jesus-Miracle Toast

They can do everything from nuclear fusion to vaginal rejuvenation, so you know it's a mathematical certainty that lasers = awesome. Plus, your right to tinker with dirt-cheap lasers in your basement is all but guaranteed in the Constitution! With that in mind, here are a few of our favorite DIY laser hacks. (Disclaimer: If you are foolhardy enough to try any of these and end up maiming yourself or getting sucked into the Tron game grid, something else was probably going to remove you from the gene pool soon anyway.)

Photo: Gene Lee

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Laser-Guided Saw: Cool Tool or Novelty Toy?

It might not cut as effectively as a lightsaber, or even a real laser cutter, but at least your lines will be (theoretically) straight.

At $20, though, it's probably too cheap to actually do its job. If you've ever used a cheap saw you know that the blade will flex and buck, leaving your supposedly neat cut looking about as straight as Earring Magic Ken. And the laser doesn't even come with a battery. We say: Avoid. You'll get a better result with an old popsicle stick.

:

DIY Laser Lightshow for $80: Useless but Awesome

What's cooler than a green laser? A green laser that paints semirandom moving spirograph patterns on your wall. Toronto-based hardware hacker Artur Petrovskyy shows you how to make one of your own from about $80 in parts in a new how-to on Instructables.com: Laser show for poor man.

Image: Instructables.com