[Company Name]
DUE DILIGENCE CHECKLIST
OUTLINE OF CHECKLIST:
(A) BASIC CORPORATE DOCUMENTS OF THE COMPANY
(B) BASIC ORGANIZATIONAL DOCUMENTS OF THE
AFFILIATED ENTITIES
(C) PREVIOUS ISSUANCES OF SECURITIES OF COMPANY
(D) PREVIOUS ISSUANCES OF SECURITIES BY AFFILIATED
ENTITIES
(E) FRANCHISING DOCUMENTATION (if any)
(F) MATERIAL CONTRACTS
(G) LITIGATION
(H) AUDIT DOCUMENTATION
(I) MANAGEMENT AND EMPLOYEES OF COMPANY AND
AFFILIATED ENTITIES
(J) FINANCIAL DOCUMENTATION
NOTE: For purposes of this Due Diligence Checklist, "Company" refers
to ___________________ [Name of Company] and "Affiliated Entity"
refers to any existing corporations, limited liability companies or
partnerships affiliated in any way to the Company, including
subsidiaries or parent companies.
PREVIOUSLY PROVIDED TO BE NOT
NO. ITEM DESCRIPTION PROVIDED HEREWITH PROVIDED APPLICABLE
(A) BASIC CORPORATE DOCUMENTS
OF THE COMPANY:
A1 Certificate of Incorporation
(Including all amendments).
A2 Bylaws (including all amendments).
A3 Minutes, Resolutions and Written
Consents of Board of Directors:
Minutes of all meetings of directors
and committees of directors, including
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copies of notices of all such meetings
where written notices were given, and
copies of all Written Consents.
A4 Minutes, Resolutions and Written
Consents of Stockholders:
Minutes of all meetings of
stockholders, including copies of
notices of all such meetings where
written notices were given, and copies
of all Written Consents.
A5 Where Qualified to do Business:
List of states and foreign countries in
which qualified to do business.
A6 Business Plans.
A7 Organizational Chart of corporate
structure, including divisions,
business units, subsidiaries or other
affiliates.
A8 List of Stock or Unit Holders of
Company
(B) BASIC ORGANIZATIONAL
DOCUMENTS OF AFFILIATED
ENTITIES, including corporations,
partnerships and limited liability
companies:
B1 Articles of Incorporation or
Organization
(including all amendments).
B2 Bylaws or Operating Agreements
(including all amendments).
B3 Minutes, Resolutions and Written
Consents of Directors,
Stockholders and Members:
Minutes of all meetings of directors,
committees of directors, stockholders,
and members including copies of
notices of all such meetings where
written notices were given, and copies
of all Written Consents.
B4 Where Qualified to do Business:
List of states and foreign countries in
which qualified to do business.
B5 Business Plans.
B6 Organizational Chart of corporate
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structure, including divisions,
business units, subsidiaries or other
affiliates.
B7 List of Stock or Unit Holders of
Company
(C) PREVIOUS OR ONGOING
ISSUANCES OF SECURITIES BY
COMPANY: common stock, preferred
stock, warrants, options, debentures,
bonds, partnership units, or any other
securities:
C1 Issuances or Grants of Common
Stock:
Schedules/Ledgers of issuances or
grants of common stock by the
Company, listing the names and
addresses of the issues or grantees,
the amounts issued or granted, the
dates of the issuances or grants, and
the consideration received by the
Company in each case.
C2 Stocks Subscription Agreement for
common stock.
C3 Private Placement Memorandum:
or other similar private offering
documents.
C4 List of all Options currently
outstanding for each class of
securities authorized by the
Company's Certificate of
Incorporation, including names and
addresses of option holders and
number of options held by each.
C5 Stock Certificate Samples, option
certificates and any other outstanding
securities.
C6 Voting Trust, Stockholder
Agreement: or other similar
agreements covering any portion of
the Company's securities.
C7 Stockholder Communications:
All communications with stockholders
(or partners) for the last five fiscal
years.
C8 Stock Option Plans:
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Stock (or unit) option plans and forms
of option agreements which have
been used.
C9 Stock Purchase Agreements which
have been used for sales of common
or preferred stock.
C10 Any Other Agreements relating to
sales of securities by the Company.
C11 Permits for issuance or transfer of
Company's securities.
C12 Registration Rights:
Any other agreements relating to
registration rights.
C13 Other Employee Stock Plans of any
sort.
(D) PREVIOUS OR ONGOING
ISSUANCES OF SECURITIES BY
AFFILIATED ENTITIES:
D1 Issuances or Grants of Common
Stock or Units:
Schedules/Ledgers of issuances or
grants of common stock by the
Affiliated Entities, listing the names
and addresses of the issues or
grantees, the amounts issued or
granted, the dates of the issuances or
grants, and the consideration received
by the Affiliated Entity in each case.
D2 Stock Subscription Agreements for
Common Stock or Units.
D3 Private Placement Memoranda or
other similar private offering
documents.
D4 List of all Options currently
outstanding for each class of
securities authorized by an Affiliated
Entity's Articles, including names and
addresses of option holders and
number of options held by each.
D5 Stock Certificate Samples, option
certificates and any other outstanding
securities.
D6 Voting Trust, Stockholder
Agreement or other similar
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agreements covering any portion of
an Affiliated Entity's securities.
D7 Stockholder Communications:
All communications with stockholders,
members or partners for the last five
fiscal years.
D8 Stock Option Plans:
Stock (or unit) option plans and forms
of option agreements which have
been used.
D9 Stock Purchase Agreements which
have been used for sales of common
or preferred stock.
D10 Any Other Agreements relating to
sales of securities by an Affiliated
Entity.
D11 Permits for issuance or transfer of an
Affiliated Entity's securities.
D12 Registration Rights:
Any agreements relating to
registration rights.
D13 Other Employee Stock Plans of any
sort.
(E) FRANCHISING DOCUMENTATION:
offering circulars, etc.
E1 Uniform Franchise Offering
Circular or other documents provided
to potential franchisees
E2 List of Franchises Granted and
description of areas covered by
respective franchises
(F) MATERIAL CONTRACTS:
agreements, information and
literature of Company and Affiliated
Entities:
F1 List of Principal Territories (both
geographic and by type of business, if
appropriate) with short description of
each.
F2 List of Principal Competitors in
principal territories including the
strengths and weaknesses of these
competitors.
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F3 Revenues by Cost Center
for the last two fiscal years and
forecast for next three years.
F4 Key Factors in reaching revenue
objectives for each cost center.
F5 Pending: All pending distribution
agreements, sales agreements or
letters of intent.
F6 Cancellation Rates for orders or
clients.
F7 Risk Factors:
Potential negative influences on the
next three fiscal years profit plans
(e.g., loss of a major supplier,
termination of key personnel, etc.).
F8 Maps showing location of Company
Operations, store/facility locations,
lease/fee simple locations and
planned areas of expansion, etc.
F9 Title Reports
for any real property owned by the
Company or an Affiliated Entity.
F10 Security Agreements
All security agreements affecting any
of the assets or properties of the
Company or an Affiliated Entity, all
currently effective financing
documents (such as installment sales
and sales leaseback transactions) and
all liens and UCC financing
statements.
F11 Appraisal Reports
F12 Product Designs/Descriptions
which the Company has or proposes
to announce in the next two years
and forecast revenues from these
products.
F13 Land/Equipment Purchase
Agreements and Options and other
asset purchase agreements.
F14 Sales Literature:
Samples of marketing and sales
literature, including brochures and
advertisements.
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F15 Press Clippings and releases.
F16 Industry Information:
Literature concerning the industry
generally
F17 Statistical and Demographic Data
regarding factors affecting the
Company's industry and markets.
F18 Recent Analyses of the Company
or its industries prepared by
investment bankers, engineers,
management consultants,
accountants or others, including
analyst reports, marketing studies,
credit reports and other types of
reports, financial or otherwise.
F19 Lease Agreements - Real Estate:
for offices and facilities.
F20 Lease Agreements - Other: for
significant equipment, furniture and
automobiles.
F21 List of Principal Suppliers, Con-
tractors, Sub-Contractors,
Engineers, Architects, Customers,
Clients and Manufacturers.
F22 Supplier/Manufacturer Contracts:
Contracts with principal suppliers or
manufacturers.
F23 Client/Customer Contracts:
Contracts with principal clients or
customers.
F24 Insurance Policies: Property and
casualty, fire, key-man, workers'
compensation, etc.
F25 Partnership Agreements, other
than organizational documents of
Affiliated Entity.
F26 Joint Venture Agreements.
F27 Intellectual Property:
Schedule of all patents,
trademarks/servicemarks,
trademark/servicemark registrations,
trade names, brands and copyrights,
and any pending applications for the
foregoing.
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F28 Licensing Agreements.
F29 Stock Purchase Agreements, other
than for Company or an Affiliated
Entity.
F30 Certain Transactions:
Contracts, agreements, cost-sharing
or management services agreements
or other documents relating to any
transaction between the Company
and directors, officers or owners of
more than 5% of the stock of the
Company.
F31 Other Material Documents
or information which, in your
judgment, are significant with respect
to the business of the Company or
which should be considered and
reviewed in making disclosures
regarding the business and financial
condition of the Company to
prospective investors.
(G) LITIGATION: documentation
relating to pending or threatened
litigation, assessments or claims for
Company and Affiliated Entities,
including:
G1 Schedule of all Litigation,
administrative proceedings or
governmental investigations or
inquiries, pending or threatened,
affecting the Company or an Affiliated
Entity, and names and telephone
numbers of outside counsel retained
to represent the Company or an
Affiliated Entity in these matters.
G2 Copies of documentation relating to
any Lawsuits and Related
Pleadings.
G3 Auditor Litigation Correspondence
regarding threatened or pending
litigation, assessments or claims.
G4 Warranty Claims and other related
litigation
G5 Environmental Violations:
Correspondence, memoranda or notes
concerning inquiries from federal or
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state environmental officials.
G6 Contract Disputes:
Correspondence, memoranda or notes
concerning any dispute with
suppliers, competitors, or customers
regarding any claim for an amount in
excess of $10,000, or which may
otherwise have a material impact on
the Company or an Affiliated Entity.
G7 Government Contract Violations:
Correspondence, memoranda or notes
concerning United States or foreign
government contract violations.
G8 Tax Violations:
Correspondence, memoranda or notes
concernin