Sample due diligence request list.pdf

Legal Due Diligence Request

The following is a schedule of categories of documents and information that [●] (“Buyer”) would like to review as part of its legal due diligence in connection with a possible strategic transaction (the “Transaction”) with [●] (the “Company”). Please provide the items listed below in the data room for the Transaction and mark each item that you upload with the applicable section number from this list. Once each item has been uploaded to the data room, please also annotate in the “Provided” column below where in the data room such documents are located.

Unless otherwise indicated, (i) all requests are for any documents or information which are currently existing and in effect or which occurred at any time since the Company’s formation but which are not now existing or in effect, and (ii) each request applies to the Company, its predecessors, and all of its past and present direct or indirect subsidiaries and controlled affiliates (if any), whether corporations, partnerships, joint ventures or other forms of entity.

Document Schedule

NO.	ITEM DESCRIPTION	PROVIDED	TO BE PROVIDED	N/A
1.	ORGANIZATIONAL
1.1	Corporate structure chart showing all current and past subsidiaries, controlled affiliates, investments, joint ventures, including (i) the nature and percentage of ownership, (ii) jurisdiction of formation, and (iii) a description of the role each entity plays in the operation of the Company’s business.
1.2	Organizational documents (including charter and bylaws or any equivalent organizational document), including all amendments thereto.
1.3	Minutes, resolutions, and written consents of any board of directors, any committees thereof, and the securityholders of the Company, including, to the extent available, all material distributed to attendees of any meetings thereof.
1.4	List of jurisdictions in which the Company is qualified to do business (including evidence thereof), has applied for qualification to do business, or has an office or any employees or assets, or has delivered products or services in the last 5 years including revenue generated in each such jurisdiction.
1.5	Documents regarding any bankruptcy or insolvency proceeding, reorganization, or recapitalization.
1.6	List of active and inactive fictitious business names of the Company and related filings.
2.	SECURITIES
2.1	A detailed capitalization table, including (i) all authorized, issued, and outstanding shares and other securities of the company, organized by type, class and series, (ii) a list of all current and past shareholders, option holders, and warrantholders, (iii) price paid, date acquired, and class, series and type of each share held, (iv) each option, warrant and other convertible security, and for each, the date acquired, the exercise price, the vesting schedules and existing terms, and (v) whether any such shares are held in trust for a third party or subject to vote-pooling agreements.
2.2	Copies of all equity plans, forms of awards used under the plans, and copies of all options and other awards granted under the plans (including, but not limited to, restricted stock units, restricted stock agreements, and profits interests).
2.3	Copies of agreements relating to: (i) purchase of equity (including warrant agreements); (ii) commitment to issue or sell shares or other securities (including promised but ungranted options to employees); (iii) repurchase, redemption, or cancellation of shares; (iv) past issuance of shares; (v) voting of shares and registration rights; (vi) rights of pre-emption in shares, or tender obligations; (vii) restrictions on the transfer of shares; (viii) warrants or other securities; (ix) assignment or transfer of shares; (x) participation rights/silent partnerships; and (xi) liens on shares.
2.4	Private placement memoranda and offering documents utilized in connection with, and closing binders from, private placements of securities.
2.5	All legal opinions given in connection with the offer or sale of any securities, including issuances of securities in mergers and acquisitions.
2.6	Any other reports or communications with securityholders.
2.7	Copies of Internal Revenue Code 409A valuation reports.
2.8	Evidence of qualification or exemption under applicable federal and state blue sky laws for issuance or transfer of the Company’s securities.
2.9	Equity record books and ledgers and copies of all certificates evidencing such equity, if applicable.
2.10	Schedule of any past, accrued, or anticipated dividends, distributions or repurchases with respect to Company securities.
2.11	Agreements that contain payment or vesting provisions that would accelerate or be triggered upon consummation of the contemplated transaction.
2.12	Agreements between securityholders or with the Company relating to special dividend rights, anti-dilution rights, or sale rights.
3.	INDEBTEDNESS
3.1	Contracts and other documentation evidencing borrowings, whether secured or unsecured, by the Company, including credit agreements, promissory notes, indentures, mortgages, capital leases, pledge agreements, and other evidences of indebtedness and all guarantees, and all amendments and waivers with respect thereto.
3.2	Agreements and other documentation evidencing other financing arrangements, including sale and leaseback arrangements, installment purchases, factoring agreements, etc.
3.3	Agreements and other documentation evidencing obligations or liabilities as guarantor, surety, co-signer, endorser, or otherwise in respect of the obligations of any other person or entity.
3.4	Compliance reports submitted by the Company to lenders or other creditors arising in the past 5 years.
3.5	All material correspondence with lenders, including all compliance reports submitted by the Company.
4.	AGREEMENTS
4.1	List of, and agreements with, 15 largest suppliers, vendors, service providers based on payables for the last three years YTD.
4.2	List of, and agreements with, 15 largest customers/clients by revenue, based on the last three years YTD.
4.3	List of, and agreements with, 15 largest resellers or partners by revenue, based on the last three years YTD.
4.4	General terms and conditions/standard forms of contract used in connection with purchases and sales.
4.5	List of warranties and guarantees provided to customers.
4.6	Material research and development agreements.
4.7	Material outsourcing agreements.
4.8	Agreements relating to capital expenditures.
4.9	Agreements with any governmental authority or educational institution.
4.10	Agreements relating to any mergers, acquisitions, consolidations, reorganizations, recapitalizations, etc., and all divestitures, dispositions, spin-offs, plant closings, and other similar transactions or events.
4.11	Agreements relating to any joint venture, joint development, or similar arrangement or partnership.
4.12	Agreements that provide for the indemnification of any person (including directors, officers, and affiliates) by the company.
4.13	Agreements relating to restrictions upon competition, solicitation of employees, suppliers or customers, transfers of assets, sale or issuance of equity, or pricing (e.g., MFN), requirements contracts, take or pay contracts, including rights of first refusal/notice/offer or exclusivity provisions.
4.14	Agreements which contain provisions that grant any person an option, preferential right to purchase, or a right of first refusal/offer/notice/negotiation relating to the Company or any of its assets.
4.15	Each “single source” or “sole source” supply agreement.
4.16	Powers of attorney.
4.17	Description of deposits or escrows.
4.18	A schedule and description of all transactions (including any loans or guarantees), between the Company and any officer, director, significant shareholder, or affiliate.
4.19	Agreements which require action to be taken or provide for legal consequences (e.g., breach, acceleration, loss of benefits, termination absent notice or consent) in connection with the Transaction.
4.20	All other agreements material to the Company or its business or that were entered into outside the ordinary course of business.
5.	ASSETS
5.1	List of real property owned, leased or subleased by the Company, indicating whether such property is owned, leased or subleased.
5.2	List of material personal property owned and all personal property leased by or leased from the Company, indicating whether such property is owned or leased by or from the Company.
5.3	Copies of all leases and security agreements referenced in 5.1 and 5.2 above, and any other agreements or options to purchase, lease, rent or sell any interest in real property or material personal property.
5.4	List of any liens or encumbrances on any assets of the Company.
6.	LABOR & EMPLOYMENT
6.1	Copies of all current employment agreements to which the Company is party.
6.2	“Change in control”, severance, retirement, retention or transaction bonus agreements.
6.3	Standard form of proprietary information and invention assignment agreements entered into with employees and independent contractors, and copies of any such agreements that deviate from the standard form.
6.4	Organizational chart indicating functions and reporting responsibilities of all employees.
6.5	List of all current employees, including name, job title, employing entity, employment type, status, exempt/non-exempt status, pay type, compensation, bonus or commission potential, hire date, location, manager, and union status.
6.6	Copies of all forms of offer letter, restrictive covenant agreement, arbitration/ADR agreement, wage deduction authorizations, and other contracts or agreements.
6.7	All ongoing obligations to any retired or other former employees.
6.8	A list of Company employees and independent contractors terminated in the past 2 years with date of termination, reason for termination, position, location, amount of severance paid (if any) and whether release signed.
6.9	Summary of any outstanding loans to employees and related agreements.
6.10	Personnel manuals and policies applicable to the Company employees.
6.11	Benefit Plan documents, including trust instruments, plan summaries, financial statements, annual reports, and applications for determination letters filed since the most recent determination letter for all employee benefit plans.
6.12	All collective bargaining agreements (including applicable side letters) with any labor organization or employee representative body.
6.13	List of and material documentation regarding all pending, threatened and recent disputes, grievances, complaints, investigations involving employees or consultants relating to employment matters.
6.14	List of any other labor or employment-related disputes.
6.15	A description of and material documentation regarding any strikes, work stoppages, or union organizing activities against or involving the Company within the past five years.
6.16	List of any notifications made with respect to any "reportable events" under Section 4043 of ERISA.
6.17	Formal performance improvement plans for current employees.
6.18	Copies of documents setting forth the terms of incentive compensation plans.
6.19	List of independent contractors, including a description of services provided, payment arrangement, and location of services.
6.20	Please provide written position descriptions for all exempt positions other than C-Suite and its direct reports.
6.21	Please provide copies of all forms 1099 issued by the Company for the past three tax years.
6.22	Please provide copies of all forms EEO-1 filed by the Company for the past three years.
6.23	If applicable, please provide copies of all current affirmative action programs in place at the Company.
6.24	Please provide copies of completed Forms I-9 for 25 randomly-selected employees.
6.25	Please provide copies of same wage statements for (i) three randomly-selected nonexempt employees and (ii) two randomly-selected exempt employees.
6.26	If unionized, please provide copies of grievance logs for each bargaining unit for the past three years.
6.27	Copies of all agreements with professional employer organization(s), staffing agreements, employee leasing agreements.
7.	INTELLECTUAL PROPERTY
7.1	List of all products currently or previously manufactured, distributed, licensed, supplied or sold by the Company and all products currently under development by the Company.
7.2	Copy of the Company’s product and technology roadmap, if applicable.
7.3	A schedule of all intellectual property that is owned by the Company, including all U.S. and non-U.S. patents, registered and unregistered copyrights, trademarks, domain names, slogans, logos, or service marks.
7.4	Documentation evidencing or relating to the intellectual property referred to in 7.3.
7.5	Agreements for licensing of intellectual property to third parties, including forms of end-user agreements.
7.6	Agreements for licensing of intellectual property from third parties, including maintenance agreements.
7.7	List of all public domain, open source, copyleft or community source code materials used or planned to be used by the company.
7.8	List and summary descriptions of all third parties that have been provided with the source code for any products.
7.9	If the development of any product has been funded by third parties, identify and provide copies of any relevant documents.
7.10	Correspondence or reports regarding actual or threatened claims or notifications of infringement by the Company.
7.11	Correspondence or reports regarding actual or threatened infringement by any other parties of the Company’s intellectual property rights.
7.12	List of material databases and data collections used or controlled by the Company.
7.13	Agreements with independent firms, consultants, or contractors for product research and development.
7.14	Any other confidentiality or non-disclosure agreements to which the Company is a party.
7.15	Copies of all documentation governing the ownership of the Company’s intellectual property.
7.16	Documents or agreements relating to any purchases or other acquisitions of intellectual property by the Company.
7.17	Name of the law firm(s) that handle patent, trademark, copyright or other intellectual property matters for the company.
8.	LITIGATION AND SIMILAR PROCEEDINGS
8.1	List of prior, pending or threatened litigation, proceedings, or claims involving the Company or its assets, or any principal securityholder, officer or director in their capacity as such.
8.2	Correspondence, reports, notices or other documents relating to any violation or infringement by the Company of any applicable law or regulation.
8.3	Consent decrees, judgments, settlement agreements and other agreements to which the Company is a party or is bound.
8.4	Documentation relating to compliance with health, safety and civil rights laws by the Company.
8.5	All audit response letters from the Company’s attorneys regarding litigation in which the Company is involved.
8.6	Description of any whistleblower complaints or allegations of fraud.
9.	ENVIRONMENTAL
9.1	A schedule of all permits required under applicable environmental protection laws for the operation of the business of the Company, and copies of all such permits currently held.
9.2	Information concerning compliance by the Company under applicable environmental protection laws.
9.3	A schedule and copies of all material documentation with respect to any claims pending, or to the knowledge of the company threatened, against the Company alleging a violation of applicable environmental protection laws.
9.4	Information concerning the use, storage, transportation, generation, treatment or disposal of hazardous substances by the Company.
9.5	Environmental audit or inspection reports concerning properties owned, leased or operated by the Company.
9.6	A schedule of all sites currently or at any time in the past used by the Company for waste disposal.
9.7	Information concerning any remedial investigations, feasibility studies, or remedial actions conducted by the Company regarding environmental contamination.
9.8	Summary of all OSHA inquiries.
9.9	Any material information regarding environmental, health or safety issues not otherwise provided.
10.	INSURANCE
10.1	List of all insurance contracts to which Company is a party indicating the insurance company, risks covered, insured amount, premiums, and copies of the insurance contracts.
10.2	History of insurance claims, with details of any pending claims or incidents.
11.	FOREIGN OPERATIONS
11.1	List of all countries where the Company is doing business and in which it is qualified to do business.
11.2	Description of business activities carried out in each of the countries listed.
12.	ANTI-CORRUPTION
12.1	Does the company have FCPA or anti-bribery compliance policies and procedures? If so, please provide copies.
12.2	Does the company have FCPA or anti-bribery compliance training materials? If so, please provide copies.
12.3	Describe any actions taken to ensure compliance with the UK Bribery Act.
12.4	Has the company sought to obtain registrations, licenses, or other regulatory approvals from non-US government entities over the last five years?
12.5	Is there any company approval process for engaging intermediaries? If so, please provide a copy.
12.6	Have any payments, gifts, or hospitality been provided to government officials over the past five years? If so, please describe in detail.
12.7	Have any contributions or donations been made by the company to political parties over the last five years?
12.8	Has the company ever obtained a legal opinion or legal guidance related to anti-corruption matters?
13.	EXPORT AND COMPLIANCE
13.1	How many and what percentage of customers are located outside the US?
13.2	Does the company export any products, software, or technology from the United States?
13.3	For each item identified, please state: • the Export Control Classification Number (ECCN); • the date on which this was determined; and • how it was determined.
13.4	Do company products perform cryptography or contain parts/components capable of encryption?
a. If so, has the company obtained an Encryption Registration Number? Provide copies of such documents.
b. If applicable, what sections of License Exception ENC authorize export?
13.5	Please describe any export of services.
13.6	Does the company employ foreign nationals? If so, of what countries and in what capacities?
13.7	Does the company employ any IP-blocking/geolocation measures in connection with any services?
13.8	Does the company have any branch offices/subsidiaries outside the United States?
13.9	Has the company had dealings with persons or entities in certain sanctioned countries over the past five years?
13.10	Has the company ever engaged in any direct or indirect transaction with persons on the OFAC Specially Designated Nationals List?
13.11	Please describe in detail any company interactions with certain countries.
13.12	How has the Company addressed recent export controls and sanctions targeting certain countries?
13.13	Please describe how the company ensures compliance with export and sanctions obligations.
13.14	Has the company entered any contracts with any US government agency?
13.15	Has the company ever provided ITAR “defense services” or engaged in “brokering”?
13.16	Does the company have any military customers?
13.17	Was the development of any of the company’s items funded by any government?
13.18	Has the company engaged in any supply chain or other transaction involving technology supplied by certain entities?
13.19	Does the company have written export compliance policies and procedures?
13.20	Do employees participate in training about U.S. export controls?
13.21	Does the company use resellers/distributors?
13.22	Has the company merged with, or acquired the equity or assets of, any other company in the past five years?
13.23	Has the company ever relied upon an export license?
13.24	Has the company ever engaged in the manufacture or export of defense articles without a valid ITAR registration?
14.	ANTI-BOYCOTT
14.1	Does the company do business with any countries subject to economic sanctions?
14.2	Has the company ever received a boycotting request? If so, how was it handled?
15.	SECURITY CLEARANCES
15.1	Does the company hold, has it held, or has it applied for a facility security clearance?
15.2	Do any company employees hold a security clearance?
16.	INTERNAL AND GOVERNMENT INVESTIGATIONS
16.1	Have there ever been investigations, inquiries, allegations, or enforcement actions involving the company?
16.2	If the company has consulted outside counsel on any anti-corruption or export control topics, please identify the counsel and topic.
17.	GOVERNMENTAL REGULATIONS AND FILINGS
17.1	Copies of all regulatory compliance policies and procedures.
17.2	List of all permits, licenses, registrations and other authorizations required for the operation of the business.
17.3	Any material reports to and correspondence with any governmental authority.
17.4	Copies of agreements relating to the Company’s performance of services or delivery of a product pursuant to agreements with any governmental authority.
17.5	Information regarding whether the Company holds any classified agreements with any government.
17.6	Description and copies of any U.S. classified information or documents.
17.7	Information regarding the Company’s participation in any agreement that required compliance with Federal Acquisition Regulations.
18.	PRIVACY AND DATA SECURITY
18.1	List all categories of personal data the Company collects, uses, or processes.
18.2	Describe any data security breach events or losses of information experienced by the company.
18.3	Provide any internal policies regarding use of Company computer networks and protection of privacy and data security.
18.4	Describe any events in which the Company has experienced significant outages or had to rebuild its systems due to security breaches.
18.5	Provide copies of all reports from all data security risk assessments.
18.6	Describe and provide copies of all current and prior policies relating to privacy and data protection.
18.7	If the Company processes payment card data, provide copies of policies for complying with the Payment Card Industry-Data Security Standards.
18.8	Provide any external audit reports regarding system controls.
18.9	Provide copies of all Data Protection Authority registrations.
18.10	Provide copies of all current or prior notices to individuals relating to privacy or data security.
18.11	Describe any use of identifiable data, including sharing with third parties.
18.12	Describe any use of data in de-identified, aggregate or anonymous form.
18.13	Provide copies of all agreements with third parties that process or have access to personal data.
18.14	Describe the Company’s direct marketing practices.
18.15	Provide information regarding any online tracking technologies used by the Company.
18.16	Provide copies of policies relating to employee data handling and storage.
18.17	Provide copies of any cyber-liability or related insurance coverage in place at the Company.
18.18	Describe efforts to comply with obligations under GDPR and the California Consumer Privacy Act.
19.	FINANCIAL INFORMATION
19.1	Financial statements of the Company for the last three fiscal years.
19.2	Detailed P&L and cashflow forecasts for current and next 2 years.
19.3	3 years of historical and 2 years of forecast bookings waterfall by type.
19.4	Detailed monthly trial balances for the last 2 fiscal years and year-to-date.
19.5	All material correspondence with independent accountants.
19.6	Document processes for Deferred Revenue.
19.7	Backlog information trended for trailing 12 months; by product and customer.
19.8	List of all short-term, medium-term and long-term liabilities of Company indicating debtor, creditor, amount, interest rate and due date.
19.9	Factoring agreements and other financing arrangements.
19.10	Detailed schedule of accounts payable aged as of the last two fiscal year ends.
19.11	Detailed schedules of any other accrued payables and liabilities.
19.12	Accounts receivable summary detailing account balances, aging and reserves.
19.13	Summary of the bad debts reserve for last three years.
19.14	Description of inventory practices.
19.15	Copies of any documented accounting policies and procedures.
19.16	Selling, General, and Administrative (SG&A) expense analysis.
19.17	List of bank accounts of the Company and authorized signatories for such accounts.
19.18	Information regarding subsidies, investment grants, tax privileges and other privileges.
19.19	Sales pipeline by customer, amount, likelihood and timing.
19.20	Complete Monthly/Quarterly transaction data extracted from the ERP/sales module/customer master.
20.	TAXES
20.1	Copies of U.S. and foreign corporate income and trade tax returns of the Company for the last 7 years.
20.2	Copies of tax elections filed with the relevant tax authorities.
20.3	A detailed schedule of all tax-free transactions within the last 7 years.
20.4	Summary of any carryforwards, including loss carryforwards, interest carryforwards.
20.5	A description of transfer pricing methodologies.
20.6	Copies of written tax-sharing/allocation agreements.
20.7	All tax opinions received from attorneys, accountants or other specialists for the past 7 years.
20.8	Copies of written tax rulings in effect or that were in effect during any open year.
20.9	Copies of tax clearance certificates for any taxes.
20.10	A detailed schedule of all agreements concluded between the Company and its direct or indirect shareholders.
20.11	List of any domestic or foreign governmental entities conducting examinations or audits.
20.12	Copies of the latest tax audit report for various taxes.
20.13	Listing & history of all tax examinations during the past 7 years.
20.14	A description of any changes in accounting methods for the last four years.
20.15	All information related to any audit of any return or report filed by or on behalf of the Company for the last 7 fiscal years.
20.16	Agreements which waive or extend the period for assessment or collection of any taxes.
20.17	All correspondence with any tax authorities for the past 7 years.
20.18	Any determination letters from any tax authority received in the last 5 years.
20.19	A detailed schedule of all tax liens against the Company’s assets.
20.20	Copies of all VAT and payroll tax self-assessments and annual returns, if applicable.
20.21	Copies of all property tax returns and status of any property tax examinations.
20.22	List of locations from which the Company accepts orders or does business.
20.23	Copies of all franchise tax returns and status of any franchise tax examinations.
20.24	Copies of the last 3 returns filed for all jurisdictions where the Company is required to file any sales tax returns.
20.25	Copies of all withholding tax returns/self-assessments.
20.26	A detailed schedule of all services received from outside of the U.S.
20.27	Copies of tax provision workpapers and memos supporting calculations.
20.28	Information relating to any changes in accounting methods or principles during the past 3 years.
20.29	A detailed schedule of all tax liabilities, including loss contingencies and uncertain tax positions.
20.30	A detailed schedule of the tax basis of all assets.