Merger related

Dear Guptaji,

Checklist for Acquisition of a Private Company

Accounting and Financial

1. Coordinate with internal accounting staff and outside auditors.

2. Address any updates to financial statements.

3. Coordinate wire transfer procedures.

4. Coordinate investment of proceeds from sale.

5. Assist in developing responses to Buyer requests, if any, for more detailed financials.

6. Carefully review seller’s financial statements.

7. Proper accounting treatment and revenue recognition by seller?

8. Audited financial statements and auditor reports available?

9. Auditor management letters available?

10. Asset review.

11. Liabilities review.

12. Accounts receivable review.

13. Accounts payable review.

14. Inventory review.

15. Cash position and requirements review.

16. Loan review.

17. Unfunded pension cost review.

18. Contingent liabilities review.

19. Prospective financial information:

(a) Earnings projection.
(b) Projection of cash requirements.
(c) Projected financial statements.
(d) Underlying assumptions and key factors.
(e) Capital and operating budgets.
(f) Long-term plans.

Agreement Preparation

1. Confidentiality Agreements

2. Asset or Stock Sale Agreement

3. Assignment & Assumption Agreements

4. Real Estate Purchase Agreements (if not included in the main Agreement)

5. Environmental Agreement (if not included in the main Sale Agreement)

6. Bills of Sale (and other instruments of transfer)

7. Schedules to Agreements

8. Opinions of Counsel

9. Officer’s Certificate

10. Compliance Certificates

11. Develop appropriate purchase price adjustment mechanism, if necessary

12. Determine Position on Key Points:

(a) Representations and warranties
(b) Scope of indemnification: cap/time to assert/basket
(c) Liabilities to be retained/assumed by buyer
(d) Conditions to closing
(e) Damages clause in the event of failure of buyer to close

(f) Treatment of employees & benefit plans
(g) Pre-closing restrictive covenants of seller
(h) Covenants of buyer (such as access to records)
(i) Post-closing transition
(j) As-is sale with all faults? – disclaimers of representations or warranties?
(k) Assumption by buyer of designated existing contracts (service as well as sales).
(l) Buyer’s cooperation if seller intends to complete transaction as part of a tax free exchange.
(m) Risk of loss prior to closing (casualty, condemnation) – materiality standard.
(n) Consents and approvals of third parties
(o) Proration and allocation of closing costs: transfer taxes, escrow fees, title insurance premiums, recording fees.
(p) Assumption by buyer of various deferred obligations?
(q) Arbitration clause.
(r) Non-compete provision.
(s) Supply agreements.

 

Antitrust and Regulatory

1. Determine permitted scope of disclosure of information to competitors

2. Determine allocation of antitrust risk, including seller positions in the event of 2nd request under HSR Act or injunction. Payment from bidder if anti-trust problem forces cancellation?

3. Analyze scope of any antitrust issues with various bidders

4. Prepare Hart-Scott-Rodino filings if thresholds are met

5. Be prepared to respond to requests for additional information re: Hart-Scott-Rodino filings

6. Review Hart-Scott-Rodino filings from buyers

7. Address Exon-Florio issues if any foreign bidders

8. Address Department of Commerce filings if any foreign bidders.

Asset Schedules

1. Detailed listing of assets vs. descripttive approach?

2. Determine which assets are subject to liens

Dear Guptaji,

• Letter of Intent for Acquisition – Purchase of Stock of the Business for a Combination of Cash and Purchaser’s Stock (Pro-Buyer Oriented)
• Agreement and Plan of Merger between iVillage, Inc. and NBC Universal, Inc.
• Merger Agreement between Hewlett-Packard and Compaq Computer
• Option Agreement to Purchase Assets
• Patent Assignment
• Dow Jones and MarketWatch, Inc. Agreement and Plan of Merger
• Agreement and Plan of Merger between Intermix Media/ MySpace, Fox Interactive Media, Inc. and News Corporation
• Acquisition Agreement for the shares of Skype by eBay Inc.
• Voting Agreement between Walt Disney Company and Steve Jobs, in connection with the acquisition of Pixar
• Agreement and Plan of Merger between Google and dMarc Broadcasting
• Copyright Assignment
• Trademark Assignment
• Confidentiality Agreement in Connection with Potential Merger or Acquisition
• Board Resolution Approving an Acquisition
• Agreement and Plan of Merger between The Walt Disney Company and Pixar
• Non-Competition Agreement
• Shareholder Resolution Approving an Acquisition
• Checklist for Acquisition of a Private Company
• Letter of Intent for Acquisition – Purchase of Assets of the Business for all Cash (Pro-Buyer Oriented)
• Letter of Intent for Acquisition – Purchase of Stock of the Business for all Cash (Pro-Seller Oriented)
• Agreement and Plan of Reorganization between Ask Jeeves Inc. and Interactive Search Holdings
• Finder’s Fee Agreement
• Bill of Sale – Business Assets
• Due Diligence Checklist
• Letter of Intent to Purchase a Business
• Letter of Intent for Acquisition – Purchase of Stock of the Business for a Combination of Cash and Purchaser’s Stock (Pro-Buyer Oriented)
• Term Sheet for Equity Investment and Strategic Alliance
• Term Sheet for Potential Investment
• Letter of Intent for Acquisition – Purchase of Stock of the Business for all Cash (Pro-Buyer Oriented)
• Venture Capital Term Sheet (Short Form)
• Term Sheet for Warrant Purchase
• Preferred Stock Purchase Agreement (Pro-company oriented)
• Short Form Venture Capital Term Sheet
• Letter of Intent for Acquisition – Purchase of Stock of the Business for all Cash (Pro-Seller Oriented)
• Long Form Venture Capital Term Sheet
• Letter of Intent for Joint Venture
• Letter of Intent to Purchase a Business
• Acquisition Letter of Intent
• Checklist for Acquisition of a Private Company
• Due Diligence Questionnaire
• Due Diligence Checklist