I.
GENERAL CORPORATE MATTERS A. Charter Documents 1. Certificate of Incorporation and By-Laws (including any amendments) of the Company and each of its subsidiaries or other entities, if any, in which the Company has more than a five percent equity or other ownership interest. The term "subsidiary" as used in this checklist covers all such entities. List of states and other jurisdictions (including other countries) in which the Company or any of its subsidiaries are qualified to do business as foreign corporations, or in which its or their trade names are registered, and description of Company (or subsidiary) operations in such states or other jurisdictions.
2.
B.
Capital Stock 1. Description of the classes of authorized capital stock of the Company and its subsidiaries, and a statement of the number of issued and outstanding shares of each class and the ownership thereof. All documents creating restrictions with respect to any class of capital stock. List of stock of other companies owned by the Company and, if available, lists of stockholders of such other companies. All agreements, warrants, options, or other rights to purchase or acquire any shares of capital stock or other securities of the Company or any of its subsidiaries, and any commitments, including stock option plans, stock appreciation rights and phantom stock option plans, with respect to the foregoing. All agreements among stockholders of the Company with respect to the voting and/or sale or other disposition of shares of the Company's capital stock and all agreements -1-
2. 3.
4.
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to which the Company is a party with respect to the voting and/or sale or other disposition of the stock of other companies owned by the Company (including, without limitation, all equity purchase agreements, stockholder agreements and voting agreements and voting trusts, proxies, registration rights agreements, management stock repurchase agreements, redemption agreements and voting agreements). 6. 7. Records of all Issuances and Transfers of stock of the Company within the past five years. Documents relating to all offerings and issuances of securities by the Company and any of its subsidiaries within the past three (3) years. An analysis of the dilution that would result from the exercise of all outstanding warrants, options and other rights to purchase stock and computation of any antidilution adjustments applicable to any securities resulting from the contemplated transaction (a standard capitalization schedule will suffice).
8.
C.
Minutes 1. Minutes of all meetings of, and all actions without a meeting by, the Board of Directors (and of all committees thereof) of the Company and each of its subsidiaries since January 1, 1996. Minutes of all meetings of, and all actions without a meeting by, the stockholders of the Company and each of its subsidiaries since January 1, 1996.
2.
D.
Organization 1. 2. Description of the management structure of the Company and each of its subsidiaries. List of the names of officers and directors of the Company and each of its subsidiaries.
II.
CLAIMS, LITIGATION AND ARBITRATION -2-
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A.
Description of the status of each presently threatened or pending claim, litigation or arbitration, and of each claim, litigation or arbitration concluded or settled within the last two years, as to which the Company or any subsidiary is a party (whether as plaintiff or defendant, and including specifically claims or proceedings before any state commission or agency) where the amount in dispute exceeds $25,000. Description of any outstanding judgments against the Company or any subsidiary. Description of any claims by customers or vendors involving more than $5,000 individually or $10,000 in the aggregate. Description of any bankruptcy, criminal, or other judicial proceeding pending, expected, or completed within the past five years involving the Company, any of its subsidiaries, or any of the Company's officers, directors, or principal stockholders.
B. C. D.
III.
COMPLIANCE WITH LAWS A. Description of all recent, current, and/or threatened claims or citations for failure by the Company or any subsidiary to comply with applicable laws, including environmental laws, consumer laws, occupational health and safety laws, immigration, labor and equal employment opportunity laws, etc., and measures presently being taken to insure compliance. Description of current status of any federal and state regulatory audits and inspections, including environmental, occupational health and safety, etc. Copies of all government agency, environmental or workplace safety and health reports relating to any such facilities or properties, notices of violations, complaints and consent decrees; any other documents indicating noncompliance with environmental or workplace safety and health laws or regulations received by the Company or its subsidiaries from local, state, or federal governmental authorities.
B.
C.
IV.
PERSONNEL AND EMPLOYEE BENEFITS A. Contracts with Employees -3-
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1.
All employment and/or consulting contracts with any officers, directors, and/or employees of, or consultants to, the Company or its subsidiaries with an annual salary or payment thereunder in excess of $60,000. All other material contracts with any officers, directors, and/or key employees of, or consultants to, the Company or its subsidiaries, including confidentiality agreements, noncompetition agreements, etc.
2.
B.
Employee Benefits 1. Description of all pension and profit-sharing plans and other employee benefit plans, including bonus plans, stock purchase or bonus plans or arrangements, stock option plans, group or key man life insurance plans, salary continuation plans, supplemental unemployment benefit plans, medical insurance or reimbursement plans, etc., and any amendments or proposed amendments to any such plans, and copies of each (including those specified below). (a) For each Pension Plan (including any terminated plan): (i) (ii) (iii) (iv) Plan documents (including related trust documents) with all amendments; Summary Plan Description; All IRS determination letters; Applications for IRS determination letters (Form 5300 or 5301 and attachments); Annual Returns/Reports (Forms 5500) for past 5 years; and All correspondence regarding the Plan with/from IRS, Department of Labor and/or Pension Benefit Guaranty Corporation during past 5 years.
2.
(v) (vi)
(b) For Each Welfare Benefit Plan: -4\\\DC - 68734/7 - 0763807.01
(i)
Plan document (including any related trust documents or insurance contract) and all amendments; Summary Plan Description; and Annual Returns/Reports (Forms 5500) for past 5 years.
(ii) (iii) (c)
For each stock option or similar plan involving capital stock of the Company: (i) The number of options, rights, shares, units, etc., granted to each director, officer, employee and stockholder under any such plans; and the terms of such options.
(ii) C. Contracts with Unions
All contracts with unions to which the Company or any subsidiary is a party. D. Employment Policies All statement or employment policies, including working hours, overtime pay, workers' compensation, unemployment compensation, vacation and sick pay, emergency leave, etc. V. INTELLECTUAL PROPERTY RIGHTS A. Software 1. Schedule and description of all material software to which the Company and its subsidiaries have (or had) rights indicating whether the Company and its subsidiaries have (or had) title to such software or are (or were) nonexclusive or exclusive licensees thereof, specifying the author and the other individuals who assisted in the design and development of such software, indicating whether such software is copyrighted or otherwise protected and specifying the programming language(s) of such software. -5\\\DC - 68734/7 - 0763807.01
Please provide information concerning the individuals referred to in the preceding sentence. 2. Evidence of title or right to use (including all licenses, independent contractor/consultant agreements and employment agreements of individuals who assisted in the design and development of software and other similar agreements) all software in which the Company and its subsidiaries have rights, including description of all escrow and security interest arrangements with respect to software. Description of all measures used to protect the proprietary nature of all software developed by the Company and its subsidiaries or with respect to which the Company and its subsidiaries are (or were) nonexclusive or exclusive licensees, including patents, copyright or other registration and any measures designed to protect the trade secret status of such software. All confidentiality, non-disclosure and similar agreements relating to or covering all software or any component thereof. Test results and other performance evaluation of software developed by the Company and its subsidiaries or with respect to which the Company and its subsidiaries are (or were) nonexclusive or exclusive licensees. Verification of the source code of all object codes of any software developed by the Company and its subsidiaries or with respect to which the Company and its subsidiaries are (or were) nonexclusive or exclusive licensees.
3.
4.
5.
6.
B.
Trade and Service Marks 1. Schedule and description of all trade names and trade and service marks and e-mail or website addresses to which the Company and its subsidiaries have (or had) title or other rights. Evidence of registration of all trade or service marks that have been registered with the U.S. Patent and Trademark Office (the "PTO") and correspondence with the PTO with respect thereto. -6-
2.
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3.
Any royalty and similar agreements relating to the use of such trademarks, service marks or e-mail or website addresses.
C.
Patents, Copyrights and Other Rights. Schedule and description of all patents, copyrights and other intellectual property rights owned by or assigned to the Company and its subsidiaries (to the extent not covered elsewhere on this list) showing for each: nature of patent, patent number, date of issue, date acquired, cost, reserve or amortization, present book value, and intrinsic value.
D.
Generally 1. All royalty or other agreements relating to software, trade names, trade or service marks, patents, copyrights, licenses or other similar rights. All pending or proposed applications for trade or service marks, patents, copyrights or other similar rights, or pending or proposed license agreements therefor, owned or used (or proposed to be owned or used) in the business of the Company or its subsidiaries. Description of any actual or threatened disputes or claims of infringement, invalidity, etc. of (or relating to) trade or service marks, trade names, patents, copyrights or other similar rights owned or used by the Company and its subsidiaries. Description of and any policy statements of the Company and its subsidiaries with respect to research and development by employees and consultants of the Company and its subsidiaries, including copies of any assignment agreements and employee trade secret and nondisclosure agreements. Please identify all intellectual property rights held by the Company and/or its subsidiaries, other than software, and for all such rights, please provide the following: (a) The names of all persons who assisted in the design, development or implementation of such rights. -7-
2.
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4.
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(b)
The nature of each person’s relationship to the Company and/or its subsidiary (i.e., consultant, independent contractor, employee, etc.). Whether each person signed a confidentiality, nondisclosure or other employment agreement, and if so, include a copy of the agreement. For each such person who no longer works with the Company or its subsidiary, the present location and employment of the person. Description of all measures used to protect the confidentiality of such rights.
(c)
(d)
(e) E. Year 2000.
Status of Year 2000 compliance in respect of all proprietary, custom and other software and hardware used in the business of the Company or any of its subsidiaries, including description of remediation efforts completed to date or planned in the future. VI. REAL PROPERTY A. Description of all real property owned by the Company and its subsidiaries, including the following: 1. 2. 3. 4. B. Location Description (Title Survey) Date of Purchase Description of any liens or mortgages
Leases or assignments of lease agreements of real property in which the Company or any subsidiary is (i) a lessee or assignee of a lessee, or (ii) a lessor. Title insurance policies, certificates of occupancy, assessments, condemnations orders and zoning variances of the Company related to real property. -8-
C.
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D. E.
Material liens, easements, restrictions or other encumbrances on such real property, including a UCC search of the Company. Environmental audits, engineering studies, soil tests and similar evaluations or reports with respect to any property owned by the Company or any subsidiary.
VII.
OTHER PROPERTY AND RIGHTS A. Sale and Leaseback Agreements Any sale and leaseback agreements, conditional or installment sale or arrangements or financing leases of the Company or its subsidiaries relating to the acquisition of capital assets through leases in excess of $25,000 individually or $50,000 in the aggregate. B. Personal Property Leases Any leases of personal property or assets in excess of $5,000 per year individually or $10,000 in the aggregate or any conditional sale agreements, mortgages, etc. relating to the acquisition of assets on an installment basis. C. Other Property Schedule and description, including manner of ownership or holding, of other significant personal property and any appraisals thereon prepared within the last three (3) years. D. Insurance 1. Schedule of insurance coverage summarizing all policies, including information as to the carrier, effective dates, coverage amount and premium amount with respect to each policy. All insurance policies covering the Company or any subsidiary (complete policies with all current premium information), including: (a) (b) (c) Title insurance Property insurance Corporate liability insurance -9-
2.
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(d) (e) (f)
Directors and officers liability insurance Stop-loss, catastrophic and similar insurance Other forms of insurance, including insurance for indemnification or performance liabilities to customers.
3. E.
Claims experience for the last three years under each of the above policies.
Permits, Licenses, Etc. Copies of all significant governmental permits, licenses, and approvals (including specifically permits, licenses, and approvals issued by any state commission or agency) held by the Company or any subsidiary and of all tariffs and similar filings made by the Company or any subsidiary thereof with any federal or state government, commission, or agency.
VIII.
FINANCING AND BANKING A. Credit Agreements and Loans to the Company 1. All agreements of the Company or its subsidiaries relating to the borrowing of money, including term loan and revolving credit agreements and debt instruments and any other agreements issued thereunder, and the current balance of each such source of indebtedness. All guaranties of any of the Company's borrowings, including without limitation, Letters of Credit and guaranties by other entities or persons (including specifically any of the Company's promoters, officers, directors, employees or stockholders). All documents evidencing security interests against real or personal property of the Company or any subsidiary and an indication of where such documents are filed.
2.
3.
B.
Loans or Guaranties Made by the Company 1. All agreements of the Company or its subsidiaries relating to loans by the Company or its subsidiaries to, or guaranties of the obligations of, other entities or persons - 10 -
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(including specifically the Company's promoters, officers, directors, employees or stockholders) in excess of $10,000. 2. All documents evidencing security interests taken by the Company in real or personal property of others and an indication of where such documents and/or financing statements are filed.
C.
Other Indebtedness Any other information or documents evidencing indebtedness of the Company or any subsidiary.
D.
Banking Relationships Schedule of banking relationships of the Company and its subsidiaries.
IX.
OTHER AGREEMENTS To the extent not covered elsewhere in this list: A. Agreements relating to any significant acquisition or disposition of assets or business by the Company or any subsidiary during the past three years. customer or supply contracts and purchase contracts of the Company or any subsidiary which individually are in excess of $100,000 annually or $125,000 in the aggregate, and copies of all significant warranties or indemnification provisions given by the Company or any subsidiary in connection with any customer or vendor agreements. Present or pending joint venture or partnership agreements and other such arrangements in which the Company or any subsidiary is a party or is otherwise involved. License agreements of the Company or any subsidiary. Secrecy and nondisclosure agreements with third parties relating to technical and other proprietary information. Engagement letters with financial advisors, investment bankers, finders, business brokers or similar advisors or service providers - 11 -
B.
C.
D. E. F.
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relating to any transaction of the type referred to in Sections IX.A and C above. G. H. I. J. K. L. M. X. Any distribution, marketing, sales representative or consulting contracts of the Company or any subsidiary. Any agreements for outsourcing “back office” functions of the Company or any subsidiary. Any contracts with stockholders, directors or officers for the lease or use of any personal or real property. Any tax sharing or tax indemnification agreements. Any agreements requiring the payment of cash or other compensation upon a change of control of the Company. Commission, brokerage, agency or similar contracts relating to the sale or procurement of goods or services. Any other significant contracts of the Company or any subsidiary.
FINANCIAL ACCOUNTING AND EXPENDITURES A. Financial statements for all completed fiscal years since 1996 and most recent interim periods for the Company and its subsidiaries. Such statements should disclose changes in accounting methods from one period to another. Correspondence with accountants relating to audits, reviews or examinations of the Company and any subsidiaries since the relevant company's inception, including accountants' letters to management and attorneys' letters delivered in connection with audits, reviews or examinations. Information regarding any material contingent liabilities and material asserted or unasserted claims.
B.
C.
XI.
IMMIGRATION A. Evidence that the Company and its subsidiaries have complied with all laws respecting the hiring or contracting of services from - 12 -
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resident aliens or other non-United States citizens (including any immigration audits if available).
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