Participant’s Guide to
Acquisition Due Diligence
Table of Contents
Corporate and Other Organizational Records
Stockholder Records
Material Agreements
Litigation and Regulatory Matters
Intellectual Property
Employee Benefit Plans and Other Employment Matters
Properties, Assets and Leases
Programs/ Business Development/ Contracts/ Supply Chain
10 Tax
11 Insurance
12 Finance
13 Information Technology
14 Warranty
15 Environmental, Health and Safety
16 Technology
17 Security
18 Company Culture
19 Communications
International Transactions
1 Corporate and Other
Organizational Records
1.1 History of the Company including any
predecessor companyies and divested portions,
including copies of all acquisition agreements and
all divestiture agreements.
1.2 Annual reports, 8Ks, 10Ks, 10Qs, proxy and
insider filings and registrations including internal
certification documents relating thereto for the
last 3 years.
1.3 Company policy and procedure manuals.
1.4 The corporate charter (certificate or articles of
incorporation) and by-laws for the Company,
including all amendments thereof.
1.5 Minutes of meetings and Actions by Written
Consent of the board of directors of the Company
and all committees thereof since the date of
1.6 Minutes of meetings and Actions by Written
Consent of the shareholders of the Company
since the date of incorporation.
1.7 Do any non-US citizens serve as members of the
Company's board of directors, officers, executive
personnel, general paers, regents, trustees or
senior management officials? If so, identify.
1.8 Foreign qualification documents, if any.
1.9 An organizational chart or written description
indicating each legal entity owned by, affiliated
with or otherwise engaged in business with the
Company and identifying for each entity the
jurisdiction of incorporation and the approximate
date of incorporation or date of formation.
1.10 Brief description of all mergers, acquisitions,
dispositions, equity financing, reorganizations
and other material transactions completed or
proposed within 5 years of this date and all
documentation relating thereto.
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1 Corporate and Other
Organizational Records
1.11 If any Company is a paership or limited liability
company, copy of paership or limited liability
company agreement, as amended, and certificate
of limited paership or certificate of formation, with
all amendments.
1.12 List of states and foreign countries in which the
Company owns or leases assets, employs people
(including consultants or distributors), regularly
engages independent contractors or has material
contractual relationships. List of all states and
foreign countries in which the Company
contemplates undertaking business operations in
the nature of the foregoing.
1.13 All private placement memoranda, investment
letters, questionnaires, and other documents
relating to any private placement of debt or equity
securities by the Company since its incorporation
(whether or not such offering was consummated).
Include copies of all documents filed with every
state and federal authority in connection with any
such offering of securities. Please explain how
the proceeds have been used to date from these
private placements of securities.
1.14 List of any parties or entities, if any, whose
consent to the proposed transaction will be
required and copies of relevant documents.
1.15 Any stockholder, buy-sell or similar agreements
that may affect, directly or indirectly, the
proposed transaction.
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2 Stockholder Records
2.1 Copies of all securities of the Company presently
outstanding (including options, warrants and
securities convertible or exchangeable into
common stock) and the number of shares, units
or principal amount thereof outstanding as of this
2.2 List of all the security holders of the Company
(including option and warrant holders and others
entitled to purchase the securities of the
Company) since inception of the Company to this
date, indicating all transactions, the class and
number of securities held by each such holder.
2.3 Does any foreign interest, directly or indirectly,
own or have beneficial ownership of 5 percent or
more of the outstanding shares of any class of
the Company's equity securities? If so, identify.
2.4 Does the Company directly or indirectly through
subsidiaries and/or affiliates own 10 percent or
more of any foreign interest? If so, identify.
2.5 List of all stock purchase and repurchase
2.6 All outstanding agreements or other instruments
that may in any way limit the Company's ability to
declare and pay dividends.
2.7 All stock restriction agreements, agreements
relating to rights of first refusal and preemptive
2.8 Other documents, if any, relating to the purchase,
issuance or sale of securities.
2.9 All documents known to the Company relating to
outstanding proxies, powers of attorney (with
respect to any stock of the Company), voting
trusts, or other assignments of rights attaching to
any of the stock of the Company.
2.10 List of any capital stock or equity interest in any
other entity or enterprise owned by the Company.
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3 Material Agreements
3.1 Agreements related to the granting or obtaining of
rights to Intellectual Property or to the use of
Intellectual Property including estimated
royalties/license fees and other payments due in
connection therewith.
3.2 Confidentiality or nondisclosure agreements
which are material to the Company's core
3.3 Software licenses or reseller agreements.
3.4 Distribution, franchise, sales representative,
consultant, agency, or commission agreements.
3.5 Materials, sales and purchase contracts and
supply agreements.
3.6 Joint venture agreements, teaming agreements,
strategic supplier agreements, and similar
strategic relationship agreements.
3.7 Research and development agreements.
3.8 International Industrial Participation (Offset)
3.9 Any contracts or agreements which contain
termination or other provisions that are triggered
by a change in control.
3.10 All agreements pursuant to which the Company
is or will be subject to any obligation to provide
funds to or to make investments in any other
person (in the form of a loan, capital contribution
or otherwise).
3.11 Schedule and copies of all contracts,
agreements, arrangements or understandings
under which the Company (i) has any surviving
representations or warranties or any ongoing
obligation to indemnify, defend or hold harmless
any party, or (ii) is subject to any other material
commitment, contingency or liability not
specifically reflected in the consolidated financial
statements of the Company.
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3 Material Agreements
3.12 Any contracts or agreements with respect to
which the Company has any liability or obligation
involving more than $50,000, contingent or
otherwise, or is significant to the Company's
3.13 Agreements which may extend for a term of
more than one year after the contemplated
3.14 Agreements under which the amount payable
by the Company is dependent on the revenue,
income or similar measure of the Company or
any other person or entity.
3.15 Agreements which place any material limitation
on the method of conducting or scope of the
Company's business or which prohibit or restrict
(i) the Company's ability to compete in any
business anywhere in any geographic area,
(ii) the customers with which the Company may
do business or (iii) the prices the Company may
charge for its services.
3.16 Outstanding powers of attorney and letters of
authorization regarding the signing of bids,
purchase orders or contracts.
3.17 All other material contracts, instruments,
commitments, plans, arrangements and
documents involving the Company, not otherwise
covered by the foregoing items, which, in your
judgment, may be material to the business of the
Company or which should be reviewed in making
disclosures regarding the business and financial
condition of the Company.
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4 Litigation and
Regulatory Matters
4.1 A schedule of all material government permits,
licenses, etc. of the Company and relating to the
Company's business.
4.2 All applications, filings, findings, reports,
registration statements, significant
correspondence, complaints, consent decrees,
settlements, determinations, orders, etc., relating
to federal regulatory agencies and all foreign,
state and local agencies performing similar
functions. Include all exhibits for all filings,
supporting documents, and related work papers
unless duplicative of material requested
elsewhere. Copy or description of compliance
programs. For example, and not by way of
limitation, please provide items relating to the
4.2.1 US Patent and Trademark Office and foreign
government counterparts.
4.2.2 Environmental Protection Agency.
4.2.3 Any and all state and foreign environmental
agencies having jurisdiction over the Company’s
Equal Employment Opportunity Commission.
4.2.5 Occupational Health and Safety
4.2.6 Any and all state and foreign occupational
health and safety or public health agencies
having jurisdiction over the Company’s
Internal Revenue Service.
Federal Trade Commission.
4.2.9 Department of Homeland Security, Customs
and Border Protection.
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4 Litigation and
Regulatory Matters
4.2.10 Department of State, including ITAR matters.
4.2.11 Department of Treasury, including OFAC
4.2.12 Department of Labor.
4.2.13 Department of Commerce, including EAR
4.2.14 Department of Justice, including FCPA
4.2.15 Securities and Exchange Commission,
including Sarbanes-Oxley and FCPA matters.
4.2.16 Consumer Product Safety Act (or similar
consumer protection laws).
4.3 Copies of any international or domestic franchise
4.4 List of all required or advisable non-governmental
approvals and authorizations (such as ISO
certifications) and copies of all such items held by
the Company. Copies of any complaints,
suspensions or similar notices or correspondence
during the past 5 years regarding any such
approvals or authorizations.
4.5 Description of any inquiries or known
noncompliance with any foreign, federal, state or
local laws or regulations (including OSHA, EPA,
EEOC, etc.), for the past 5 years and the
disposition and status thereof.
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4 Litigation and
Regulatory Matters
4.6 List of material litigation, administrative or
regulatory proceedings, arbitration proceedings,
government actions, investigations, claims or
disputes (including pending or threatened
litigation) involving the Company or predecessor
companies or indemnified divested companies or
any principal shareholder, officer, director,
principal, or member of the Company or
predecessor companies) with a brief description
of each such matter. Include name of court or
agency in which the matter is proceeding, date
instituted, docket number (if available) and
principal parties thereto and all court papers and
other material documents related thereto
including risk assessment with estimated
financial exposure. (A significant current
exposure or history of asbestos claims will
require several follow-up requests.)
4.7 All consent decrees, judgments, other decrees or
orders, settlement agreements, injunctions or
similar matters (continuing or contingent) to
which the Company is a party or by which the
Company of any of its assets is bound or
involving any person in his capacity as a
shareholder, officer, director principal, member or
employee of the Company.
4.8 Description of currently threatened litigation, legal
claims, regulatory actions or proceedings, and
any correspondence relating to any threatened
governmental investigation of alleged violation of
law or regulation with any governmental agency
to which the Company is or may become a party.
4.9 To the extent not duplicative with above, a
description of all actual and /or threatened
litigation relating to the Company or its business
or assets for the past 2 years and disposition and
status thereof.
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4 Litigation and
Regulatory Matters
4.10 Information concerning any material labor
disputes for the Company.
4.11 All correspondence and documents relating to
material contingent liabilities.
4.12 Counsel’s letters to accountants with respect to
litigation, contingent liabilities to the extent they
relate directly or indirectly to the Company.
4.13 Correspondence dealing with actual or alleged
infringement, misuse and misappropriation of
patents, trademarks, copyrights, trade secrets or
other intellectual property rights during the past 5
years and correspondence relating to pending or
unresolved claims of patents, trademarks,
copyrights, trade secrets or other intellectual
property rights.
4.14 Any waivers or agreements canceling claims or
rights of substantial value other than in the
ordinary course of business during the past 5
4.15 Summary of litigation and contingent liabilities,
reported or not reported.
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5 Intellectual Property
5.1 Schedule of all intangible or intellectual property
(e.g., patents, trademarks, copyrights, trade
names, service marks, trade secrets and
customer lists, chip/mask work registrations,
domain names and applications for any of the
listed items), owned, leased, licensed or used by
the Company or on behalf of the Company and
all correspondence files relating thereto, including
dates of registration, registration numbers (if
5.2 Description of policies to protect intellectual
property rights owned by the Company or
otherwise used in its business. Documents
relating to any claim or threat of claim of
infringement, misuse or misappropriation of
Intellectual Property (including breach of IP
Agreements) either by the Company against
others or by others against the Company.
5.3 Copy of Company standard form Invention and
Secrecy Agreement and list of employees who
have executed such agreement.
5.4 List of persons who are authors of, or who made
a substantial contribution to, the development of
the Company's technology, including software
and other intellectual property and identity of any
such person's then employer if not the Company.
5.5 List of any government agencies or academic
institutions that provided research and
development funding and related agreements.
5.6 Infringement/validity/patentability opinions.
5.7 Intellectual Property indemnification obligations
and claims for such indemnification.
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6 Employee Benefit
Plans and Other
Employment Matters
6.1 Documents representing all profit sharing and
savings plans, pension or retirement plans, trust
instruments, deferred compensation plans,
medical, dental or other health and welfare plans
and any bonus, incentive, performance or similar
plans or arrangements and related agreements;
materials describing any of the foregoing; and the
latest applicable trust accounting, actuarial
reports and other applicable financial statements.
Summary plan descriptions for each of the
foregoing, to the extent available. For each
qualified plan, provide a copy of the most recent
IRS favorable determination letter (including a
copy of the request for such determination) with
respect to such plan. In addition, for each plan
for which Forms 5500 are required to be filed,
please provide copies of the three most recently
filed Forms 5500 with schedules attached.
Calculation of estimated retiree medical liability (if
any) and cash flow impact over the next several
6.2 ERISA (fiduciary rules) compliance:
6.2.1 Identify fiduciaries (trustee, plan administrator,
investment manager, administrative committee,
loan committee, etc.).
6.2.2 Confirm that fiduciaries are properly bonded.
6.2.3 Review plan investments to ensure that they
are properly in the name of the trust and that they
appear to be reasonable and prudent.
6.2.4 Confirm that responsible fiduciaries have kept
due diligence files for selection of investments
and have continued to monitor investment
6.2.5 Review to ensure that there are no apparent
prohibited transactions.
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6 Employee Benefit
Plans and Other
Employment Matters
6.2.6 Confirm that all filings required by the Internal
Revenue Service (IRS), the DOL, and the
Pension Benefit Guaranty Corporation (PBGC)
have been made.
6.2.7 Confirm that the employer has a policy of
depositing employee contributions and salary
deferral contributions within the DOL’s permitted
time frame.
6.2.8 Confirm that there are no apparent breaches
of fiduciary standards.
6.2.9 Confirm that all DOL reporting and disclosure
requirements have been met, including summary
plan descriptions, summaries of material
modifications, participant statements, summary
annual reports, and independent audit of plans.
6.2.10 Confirm that there are no pending DOL
investigations or fiduciary breach lawsuits.
6.2.11 Review plans for compliance with ERISA
Section 404(c) (if desired).
6.3 Schedule of pension liabilities and assets, if any.
6.4 Organization charts (top level and business and
function) and list of current employees with, date
of hire, date of birth, function/department, security
clearance level, foreign national status, grade,
title, years of service, location, union affiliation,
participation in bonus plans, incentive plans,
benefit elections and job descriptions.
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6 Employee Benefit
Plans and Other
Employment Matters
6.5 List of executive officers, directors and other key
personnel and their current annual compensation,
in any form, indicating the percentages of their
time estimated to be devoted to the Company’s
business if they are less than full-time employees
of the Company. Copies of any other executive
compensation plans or programs.
6.6 Employment, consulting, confidentiality, noncompetition, indemnification, compensation or
other agreements or arrangements to which any
director, officer or employee of the Company is a
6.7 Copies of independent contractor agreements.
6.8 All documents relating to pension, deferred
compensation, stock option (including SARs),
profit sharing and any other similar plans of the
Company, all IRS determination letters relating to
the foregoing and the most recent actuarial report
for any defined benefit pension plan for the
6.9 Any standard form employment agreements used
by the Company as well as any agreements that
deviate in any material respect from such
standard forms, and all severance or special
termination agreements with senior management
of the Company.
6.10 Information with respect to any pension benefit
plan subject to Title IV of ERISA maintained by
an entity other than the Company which is, or
was within the past 5 years, in a single controlled
group with the Company.
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6 Employee Benefit
Plans and Other
Employment Matters
6.11 Information regarding the Company’s liability for
medical, pension and life insurance benefits for
retired employees. Financial Accounting
Standards (FAS) 106 reports. Does plan permit
amendment or termination at employer's option?
6.12 All collective bargaining agreements to which
the Company is a party or by which it is bound,
including any side letters.
6.13 A written summary of union relations and copies
of union contracts.
6.14 Description of any threatened or pending labor
disputes, work stoppages, work slowdowns,
walkouts, lockouts or union organizing activities
since inception, indicating disposition thereof by
any group whether they be employees or
independent contractors. Copies of NLRB or
Department of Labor filings, if any.
6.15 List of employment and labor related litigation
including complaints filed with EEOC, state
human rights commissions, DOL, OSHA; pending
arbitration and regulatory documents, claims, and
grievances for past 3 years pursuant to collective
bargaining agreements; copies of all attorney
demand letters.
6.16 Any policy manuals or materials with respect to
trade or concerning hiring, regulatory compliance,
or other employment practices (e.g., hiring and
employment guidelines, employment
discrimination, contracts with customers and
competitors, employee handbooks) of the
Company. Copies of Affirmative Action Plans
and current EEO-1 Report and copies of all
current and expired consent decrees.
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Plans and Other
Employment Matters
6.17 Confidentiality, proprietary rights, and noncompetition agreements (i) between the
Company and any consultant, representative,
supplier or customer or (ii) which the
Company’s employees or consultants have
entered into with a prior employer.
6.18 Descriptions of and agreements relating to any
transactions with any insiders (e.g., directors,
officers, key employees and principal
shareholders, or their respective immediate
family members) including loans, leases,
purchases or sales of property.
6.19 Schedule of all compensation paid during the
last 2 years to officers, directors, and key
employees showing separately salaries,
bonuses and non-cash compensation,
including bonuses paid or accrued, direct or
indirect benefits or perquisites, and all benefits
paid or accrued under all employee benefit
plans. A separate schedule for all other
6.20 Information as to employment arrangements
and/or compensation plans where any benefits
or rights are triggered by a change in control of
the Company, including any so called “golden
parachute” or similar arrangements.
6.21 Description of employee turnover over the last
3 years. If available, describe turnover relative
to the industry. Disclose number of voluntary
resignations and involuntary terminations of
6.22 Copies of benefits open enrollment
communications, including: memos; Summary
Plan Descriptions (SPDs); employee
contributions; and highlights of any changes.
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Employment Matters
6.23 Tuition reimbursement policies regarding
eligibility, benefit and limit if any.
6.24 Copies of standards of conduct policy and
description of the Company's ethics and
compliance program.
6.25 Brief description of training programs.
6.26 Brief description of retention programs.
6.27 Benefit costs by plan (Medical, Dental, Life,
Disability etc.) with company amount and % of
total; employee amount and % of total; and total
6.28 Company owned / leased vehicles, number of
vehicles/type, eligibility; policy/procedure for
reporting taxable income.
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7 Properties,
Assets and Leases
List of all real property directly or indirectly
owned, leased (as lessee or lessor), licensed
or used by the Company including all
documentation of ownership, leasehold
interest, any encumbrances or restrictions
against transfer on such property, and any title
insurance policies or title searches (including
copies of title exceptions). For leased or
licensed properties, include the term of lease
or license.
All leases, licenses, subleases, deeds,
mortgages, construction contracts, guarantees
and other obligations or commitments relating
to real property owned or leased in connection
with the Company's business. Any appraisals
of the Company's real property. All title
commitments, policies and ALTA Surveys
relating to real property.
All documents, entitlements, permits
approvals, variances or notices of violation or
noncompliance, under governmental,
environmental, zoning or other land-use
Inventory of all fixed assets, personal property
and equipment owned or leased, and copies of
all purchase contracts, leases (including,
without limitation, temporary office or storage
structures, automobile leases and computer
equipment leases) and security agreements,
etc., relating to material equipment or personal
property or licenses regarding equipment
usage. Provide copies of service or
maintenance contracts, if applicable.
A copy of all environmental and geotechnical
surveys, studies or tests relating to the
Company’s properties, assets and facilities.
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7 Properties,
Assets and Leases
Schedule of all toxic or hazardous materials
produced, used, handled or stored in the
course of operations. Also, a separate
schedule of all toxic or hazardous materials
previously produced, used, handled or stored
in the course of operations, but currently not in
Copies of the last 2 years of property tax bills
with respect to each of the Company’s owned
or leased properties.
Any land purchase or sale agreements or
option agreements.
Any equipment purchase agreements and
material building or construction agreements
for construction or alteration of property, plant
or equipment.
A detailed breakdown of all operating costs for
each facility.
Building site plans, layout plans, structural
plans and utility plans.
Existing governmental incentive or abatement
Insurance loss prevention reports.
Current employee headcount and site
utilization analysis.
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8 Treasury
8.1 Copies and schedule of long-term debt including
amounts, maturities, major covenants and
prepayment terms, if any. Indicate whether the
Company has been in continual compliance with
the major covenants contained in these
8.2 Copies of any currently outstanding commitment
letters or other correspondence relating to
proposed financings or borrowings including
related term sheets.
8.3 Letters of credit outstanding (amounts, terms),
surety bonds and corporate guarantees, if any.
8.4 List of financial institutions and types of accounts
maintained by or on behalf of the Company, with
copies of all material correspondence with and
from such lenders in the past 3 years.
8.5 All documents purporting to create liens,
mortgages, security agreements, pledges,
charges or other encumbrances on the stock of
the Company, on any real or personal property of
the Company or in favor of the Company.
Indicate whether the Company has been in
continual compliance with the financial covenants
contained in these agreements. All Uniform
Commercial Code (UCC) financing statements
filed with respect to the above referenced items.
8.6 Copies of any notes payable to or notes
receivable from any employee, independent
contractor, director, affiliate, agent or shareholder
of the Company outstanding at any time during
the past year. Copies of all other agreements
relating, directly or indirectly, to the Company or
any person who is, or is proposed to become, an
officer, director or significant stockholder
(including affiliates) of the Company or any of its
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8.7 Venture capital financing documents, if any.
8.8 Brief description of customary credit terms with
respect to the Company’s products and/or
8.9 Brief description of customary credit terms
available from suppliers.
8.10 Mortgages, security agreements, pledges and
other evidence of liens or letters of credit
securing any obligations of the Company.
8.11 Company and personal guarantees of any
obligations and powers of attorney executed in
the Company’s name.
8.12 Listing of all derivative contracts entered into by
the Company including any foreign currency and
interest rate hedges.
8.13 For FX derivatives, provide a supplemental
cash flow forecast which supports the
outstanding hedges per FAS 133 requirements.
8.14 Copies of foreign exchange contracts and
hedge documentation. List of programs,
contracts, and/or exposures not hedged. Copies
of financial and commodity derivatives/
instruments such as interest rate swaps, equity
options, interest options, etc., hedge
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8 Treasury
8.15 All other financing documents, such as sale and
leasebacks, installment sales, vendor financing
programs, customer financing programs, floor
planning programs, synthetic leases, capital
leases, other lease agreements not included with
lease documents (leveraged leases, industrial
revenue bonds etc.) other off-balance sheet
financing arrangement, or variable interest
8.16 Provide bank account information, including
bank name, address, account number, contact,
telephone number, currency, etc.
8.17 Describe uses of bank accounts, i.e., payroll,
T&E, AP, Receipt/lockbox and other
miscellaneous (petty cash).
8.18 Describe volume of account activity, i.e.,
number of checks for each category in 8.17
8.19 List bank account signatories and respective
limitations. Also distinguish facsimile type
signatures from manual/live signatures.
8.20 Identify special bank services. Positive pay,
controlled disbursement, lockbox, etc. should be
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9 Programs/
Business Development/
Contracts/Supply Chain
9.1 List of customers and suppliers of the Company
over past 3 years, identifying customer (DoD, non
DoD, State/Local, Commercial and Foreign
Direct, FMS and FMF programs), contract type
(fixed price, cost type, etc.) and value ($).
Include copies of standard form of agreement
and annual dollar amounts sold/purchased in
past 3 years and estimates for current year.
9.2 Copies of contracts that account for a material
part (i.e., representing 80% of Company's total
revenue) of the Company's operating expenses,
purchases or sales.
9.3 Copies of management review packages for
material contracts and bid opportunities including
management commentary thereon.
9.4 For material contracts, provide Earned Value
metrics (CPI, SPI), current contract value, funding
status, outstanding changes to be negotiated,
ETC, ECAC and whether identified in OM
financials, status of any earnings reserves and
reason therefor. For material subcontracts and
purchase orders, list the amount, actual cost
incurred, commitments and uncommitted dollars.
Also identify all critical goods or services that are
available only from one source of supply.
9.5 For material bid opportunities, provide a schedule
listing: customer, Pgo and status of RFP and
source of funds (if US Government program,
identify whether funding is included in POM and
approved by Congress), Pwin and status of
competition including discriminators, % direct
labor and material, major subcontractors,
projected earnings and revenue, any required
teaming agreements or licenses (identify whether
in place or not), industrial participation
requirements, unusual T&Cs, opportunities for
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9.6 Identify and describe any commodity marketdriven issues (e.g., supply shortages or
overages) experienced in the last 5 years.
9.7 Standard forms of contracts, purchase orders,
sales orders and other documents used in
connection with purchase and sales showing
terms and conditions.
9.8 Ratings, evaluations and complaints by
customers for past 3 years including summary
award fees scores and evaluations if available.
9.9 Identify supplier ratings for the past 3 years.
9.10 REAs and disputed change orders, claims in
mediation, arbitration or litigation. Indicate if
revenue projections include recovery of any
disputed amounts, or if any disputed amounts are
reserved for.
9.11 Defaults and terminations.
9.12 Any existing liens relating to the business or
assets thereof.
9.13 Is the Company registered with the DoD Central
Contractor Database?
9.14 Organizational Conflict of Interest (OCI)
mitigation plans currently in effect and for past 3
9.15 Correspondence relating to OCI matters.
9.16 Internal procedure for handling OCI issues.
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9.17 To the extent not covered by 1.3, Company
policy and procedure relating to export and import
9.18 Has the Company exported any commodities,
technical data, software or services in the last 5
years? If so, identify.
9.19 Does the Company currently have any validated
export licenses or agreements from any US
Government agencies? If so, identify agencies.
9.20 Does the Company have any outstanding or
ongoing export licensing, export jurisdiction or
other export control issues, i.e., non-routine
issues that are the subject of correspondence
with one or more government agencies? If so,
identify agencies and provide brief explanation.
9.21 Identify US Government agencies which have
jurisdiction over the Company's exports.
9.22 Is the Company registered with the Department
of State, Office of Defense Trade Controls? If so,
provide registration information (registrant,
PM/DTC code number, name and phone number
of empowered official).
9.23 Are there currently any known business
activities involving items on the US Munitions List
in any of the countries proscribed by section
126.1 of the ITAR? If so, describe.
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9 Programs/
Business Development/
Contracts/Supply Chain
9.24 Has any person of the Company been or is the
subject of an indictment, or has been convicted of
violations of any of the US Criminal Statutes
enumerated in section 120.27 of the ITAR, the
EAR, Customs regulations, EU trade controls and
customs requirements, or any foreign country
trade control and customs regulations, or is
ineligible to contract with, or to receive a license
or other approval to import articles or defense
services from or to receive an export license or
other approval from any agency of the US
Government, the EU or foreign government? If
so, identify.
9.25 Are there any requirements to address potential
or ongoing voluntary disclosure issues to any
agency of the US Government with respect to
violations of the ITAR or EAR? If so, identify.
9.26 Does the Company conduct business, or have
any know business activities or representation,
directly or indirectly, in any of the following
countries: Algeria, Bahrain, Comoros, Cuba,
Djibouti, Iran, Iraq, Kuwait, Lebanon, Libya,
Mauritania, Morocco, North Korea, Oman,
Palestine, Qatar, Saudi Arabia, Somalia, Sudan,
Syria, Tunisia, UAE or Yemen? If so, describe.
9.27 Has the Company ever filed a Report of
Restrictive Trade Practices (Form BXA-621P or
BXA-6051P) with the Office of Anti-boycott
Compliance at the Department of Commerce? If
so, describe.
9.28 Provide description of the Company's
Export/Import internal compliance programs,
including name and phone number of
export/import coordinator.
9.29 List of import tariff classifications for all imported
9.30 Total annual volume of Company's imports (by
shipment number, value and duty payments).
Data Room
Index # or NA
10 Tax
10.1 Work papers of U.S. income tax provision
(including state income taxes), both current and
deferred, for the last 3 fiscal years and the most
recent interim period, including:
a) Listing of exposure items and cushion analysis.
b) Support for the current and deferred tax liability
c) Support for FAS 109 conformity and valuation
allowance determination (including tax planning
d) Detail of NOL creation and/or utilization (Federal
and State).
10.2 Work papers of foreign income tax provision,
both current and deferred, for the last 3 fiscal
years and the most recent interim period.
10.3 U.S. and foreign corporate organization charts
containing all entities, locations of operations that
earn revenue, incur expenses or provide services
within and to the businesses being acquired or
disposed. A complete list of all countries, states,
provinces and cities in which the target company
(ies) is deemed to do business under applicable
corporation tax law.
10.4 For each legal entity being acquired, the laws
under which the legal entity was formed and the
type of legal entity (LLC, Ltd. SA, etc.). For each
legal entity being acquired, indicated the structure
of shareholdings (direct and indirect), analyzed
according to share of voting rights and capital.
Indicate if any of the entities made a U.S. “check
the box” or entity classification election. If yes,
then provide a copy of Form 8832. Provide the
functional currency for each legal entity.
Data Room
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10 Tax
10.5 Provide a list of joint ventures and teaming
agreements assumed as part of the transaction.
Indicate if contractual joint venture or legal entity.
If a legal entity, then please ensure it is included
in the organizational chart and detailed
information is provided.
10.6 Breakdown of target businesses most recent
revenues, payroll, real and personal property
(including capitalized leases) and tangible and
intangible assets by taxing jurisdiction (countries,
states, provinces, cities) and asset type.
10.7 List of all inter-company loans or indebtedness
(formally documented, as well as not formally
documented). If formally documented, provide a
copy of the loan document.
10.8 List of employees associated with the
businesses being acquired that are anticipated to
be retained as part of the business transaction.
List the number of employees and the annual
payroll for every location by taxing jurisdiction
(country, state, province & cities). Provide copies
of retention agreements, if any. Similarly, for a
disposition, list the target employees, legal entity
they are currently employed by, location (country,
state, province, cities) and annual payroll by
10.9 List reflecting which corporations own
technology and location of development.
10.10 Federal (including Federal Forms 5471, 5472,
8858, 8865), state and foreign (and/or statutory
reports) including VAT, PST or GST returns for
the past 3 years.
10.11 Reconciliation of financial statement income to
taxable income for the preceding 3 years, with
detail of all book/tax differences.
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10 Tax
10.12 Provide a complete list of the physical location
of all assets (e.g. by country, state and city). The
list should include the types of all assets acquired
Real Property (land), buildings, leasehold
Furniture, fixtures (i.e. assets part of the
building), and equipment
Software and intangibles
Intellectual Property
10.13 For all assets which will be transferred please
identify the book basis and tax basis.
10.14 Provide supporting documentation for the last
three years that explains differences between
depreciation and capitalization policy for both tax
and book purposes, with detail of any available
elections made (i.e., straight line, 150% AMT
method, alternative depreciation method).
10.15 List of major accounting methods, including:
Any recent (5 years) 481 adjustments.
Compliance with uniform capitalization rules
Overall accounting method (cash, accrual)
Installment reporting
Bond premium amortization
Long-term contracts
Deferred revenue for services or sale of goods
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10 Tax
10.16 Tax sharing agreement (if any).
10.17 Detail of any recent (5 years) securities
10.18 Detail on Inter-company Royalty Structure
and/or Cost Reimbursement Agreements,
including: formal agreements, current rates,
recent modification cost sharing arrangements,
advance pricing agreements, R&D Consortium
agreements and Section 482 compliance.
10.19 Support for nexus and filing requirements,
including detail on: the filing of returns in each
state where property is owned or leased and a
listing of states where U.S. Public Law 86-272
10.20 Detail of apportionment factors for
reasonableness, and detail why the sum of the
state apportionment factors do not approximate
100% (if applicable).
10.21 Detail of the characterization of business
versus non-business income and detail nonbusiness (allocated) income positions among the
10.22 Combined ("unitary") returns where required.
10.23 Detail of the filing of any of the following
returns and any potential exposure items,
including noncompliance for past 3 years:
Sales and Use Tax Returns.
Property tax returns.
Personal property tax returns.
Data Room
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10 Tax
Intangible personal property tax returns.
Unemployment tax returns.
Capital stock (net worth, franchise) tax returns.
Payroll tax returns and detail of when taxes
collected are remitted to the state.
Escheat tax returns (unclaimed property).
Copies of all foreign returns and/or statutory
reports for the past 3 years including any VAT,
PST or GST returns.
Reconciliation of financial statement income to
taxable income for the preceding 3 years on a bycountry basis.
Federal and state excise tax returns.
Other state and local tax filing requirements and
information returns.
10.24 Reconciliation of financial statement income to
taxable income for the preceding 3 years on a bycountry basis.
10.25 Detail of prior IRS and /or state examinations
and the results thereof, and compliance with the
settlements, including RARs and treatment of
similar issues in subsequent periods.
Data Room
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10 Tax
10.26 Detail of any pending IRS and/or state
examinations. Provide copies of Forms 872 and
872A (Special Consent to Extend the Time and
Assess Tax) Forms 872T and Forms 870 (Waiver
of Restrictions on Assessment and Collection of
Deficiency in Tax and Acceptance of over
10.27 Detail of prior foreign income tax audits and
the results thereof, including compliance with any
10.28 Detail of any current tax examinations being
conducted in foreign jurisdictions and any
potential foreign tax exposure.
10.29 Detail of all prior acquisitions and dispositions,
including detail on any asset appraisals.
10.30 Company's most recent tax basis balance
10.31 Detail of any Tax Deficiencies, including:
Liens outstanding.
Tax cushion analysis.
Tax allocation agreements.
Copies of all tax return disclosures under 6661,
6662, and 6694.
Tax indemnification agreements either provided
to or received from a third party (if any).
All purchase and sale agreements involving
present or former subsidiaries.
Data Room
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10 Tax
10.32 Detail of any foreign net operating losses by
legal entity by jurisdiction (country) including
amount and expiration date of the loss.
10.33 Detail of information reporting for foreign
transactions, under Sections 6038A, 6038B and
6038C (if required).
10.34 Detail of any sale-leaseback transactions and
the accounting thereof.
10.35 Detail of any debt instrument modifications and
the related tax treatment under IRC 1001 and the
proposed regulations.
10.36 Detail on any dividends received deduction
("DRD"), including circumstances where the DRD
would be disallowed (i.e., hedging transactions).
Data Room
Index # or NA
11 Insurance
11.1 A schedule of acquisitions and divestitures
listing on a case by case basis how liabilities
(known and unknown pre-closing claims and/or
occurrences) were treated at the time of each
transaction. Specify which liabilities are intended
to be included in this transaction.
11.2 Indicate the Company's five greatest exposures
to accidental loss.
11.3 Provide the following information:
11.3.1 Detailed and currently valued insurance
company loss runs for the past 5 years on an
aggregate basis for all lines of coverage.
11.3.2 Where loss sensitive/deductible programs
apply, provide a schedule of reserves compared
to ultimate expected losses within any retentions
for all lines of coverage (including a description of
any collateral required). Also provide retro or
dividend premium adjustment information.
11.3.3 Projected domestic payroll by classification
and state for the current year.
11.3.4 Total payroll for the past 5 years. Show
foreign, Canadian and domestic totals separately.
11.3.5 Indicate (by country) number of US
expatriates assigned overseas on a long-term
basis. Show payroll and job title.
11.3.6 Provide experience modifications for the past
3 years.
11.3.7 Indicate any claims which have resulted from
occupational disease.
11.3.8 Provide projected and 5 years of historical
headcount of employees (show foreign and
domestic totals separately).
Data Room
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11 Insurance
11.3.9 Indicate any union participation.
11.3.10 Indicate states in which you currently
maintain a major program with the state
insurance fund.
11.3.11 Projected revenue for current year as well as
5 years of historical revenue (please show
domestic, Canadian and foreign revenues
11.3.12 Provide current and historical vehicle counts
(5 years) and make-up of fleet (i.e., tractors,
trailers, trucks, vans, private passenger, etc.).
11.3.13 Provide schedules or summaries of
insurance for the past 3 years. Please include a
schedule of all program costs/allocations by line
of coverage.
11.3.14 Provide full copies of all insurance
policies/binders excluding employee benefits
coverages such as health and life insurance.
11.3.15 Provide corporate counsel's current list of
closed and pending litigation, including
Employment Practices related claims or
threatened litigation.
11.3.16 Schedule of domestic and foreign values per
location (street addresses) broken out by:
Property (i.e., building, stock, furniture and
fixtures, machinery and equipment). All property
values should be reported at replacement cost.
Business Interruption including ordinary payroll
figures if coverage required.
Additional Time Element Values (i.e., Extra
Expense, Rental Values, Contingent Business
Interruption/ Contingent Extra Expense).
Data Room
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11 Insurance
Occupancy at each location.
11.3.17 For each property please provide:
Copies of latest engineering reports
Construction and protection details, if engineering
information not available. Construction should be
identified by roof and walls (frame noncombustible, masonry). Protection details should
include percentage of facility with sprinklers,
alarm service, public or private fire service,
adequacy of water supply and pressure.
11.3.18 Transit information, i.e., annual number of
shipments, method of shipment, maximum
amount per shipment, average value per
shipment, what is being shipped.
11.3.19 Contingent Business Interruption/Contingent
Extra Expense - any sole or significant suppliers
or customers? If so, please identify.
11.3.20 Boiler and Machinery - any PCB or Ammonia
11.3.21 Builders Risk - any anticipated major
construction and/or renovation at the facilities?
11.3.22 Contingency plans - any developed in the
event of a major catastrophe?
11.3.23 Any known flood, earthquake or windstorm
11.3.24 Interdependency - any between owned
Data Room
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11 Insurance
11.4 Brief summary of all environmental risk
exposures. Regarding known liabilities, how are
they expected to be addressed at closing?
11.5 Summary of the Company's product liability and
errors and omissions exposure relative to the
services provided. Describe any services and/or
products which have resulted in unusual claim
activity/litigation. Describe any procedures the
Company has in place (contractual or otherwise)
to limit this exposure.
11.6 Indicate if the Company is currently responsible
for any claims resulting from uninsured losses,
insolvent former insurers, exhaustion of prior
coverage, or cancellation of claims-made
11.7 Indicate any risks the Company has been
unable to insure. Provide summary of selfinsurance programs, captives or other risk
retention programs.
11.8 Indicate if you use consultants, actuaries or
third-party administrators on any portion of your
program. If so, indicate name of the firm and
service provided.
11.9 Indicate if you assume (voluntarily or by
contract or agreement or otherwise) significant
liability for any third parties. Provide copies of
sample contracts.
11.10 Provide a copy of your latest Directors' and
Officers' Liability application as well as a
summary of any claims.
11.11 Does the Company maintain a formal safety
and loss control program? If yes, provide a
description of its goals and the name of the
individual responsible for its operations.
11.12 Describe any surety needs the Company may
have including a schedule of current bonds.
Data Room
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12 Finance
12.1 Audited financial statements for the last 2 years,
on a consolidated and consolidating basis, if
applicable and available. Provide details and
descriptions on all consolidating entries made in
preparing the consolidated results.
12.2 Internally generated annual financial
statements, including income statements,
balance sheets, cash flows and trial balances, by
operating segments/product line (if applicable) for
YTD and the last 2 years. If available, these
statements should also include budget-to-actual
comparisons, variance analysis, supplemental
P&L schedules and all related management
12.3 Provide description and quantification for any
significant non-recurring or one-time adjustments,
revenues or costs included in operating results
that are not anticipated on a go-forward basis.
12.4 Provide work papers from independent auditors,
most recent and for past 2 years.
12.5 All management letters issued by the
independent accountants and the internal
auditors during the last 3 years. If available, any
reports issued by external consultants during the
same time period.
12.6 Forecast financial statements, to include income
statements, balance sheets and cash flow
information for the next 5 years.
12.7 Strategic and business plans developed in the
last year. Include any long-range planning for
product development, market research, pricing
and data processing.
12.8 Provide schedule comparing last year's capital
budget to actual expenditures.
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12 Finance
12.9 Details on all planned capital spending for the
next 3 years.
12.10 A summary of the order backlog (if applicable),
with details for significant individual orders.
12.11 Provide a description and schedule of all
related party or non-arms length transactions for
the last 2 years. Also include a current forecast
for these transactions.
12.12 Provide a schedule of discounts given to
12.13 Provide a schedule of returns made by
customers, by month for the past year.
12.14 For contracts, provide schedule showing
scheduled costs incurred to date plus estimated
cost to complete compared to the original bid
estimate. Provide any related project engineers'
reports, interim financial data, and any
independent architects and engineers' reports.
12.15 Provide a schedule of gross profit margins on
12.16 Provide a schedule by month of selling,
general and administrative expenses for the past
2 years and current year to date.
12.17 List of outstanding bids.
12.18 List of new business opportunities.
12.19 Provide sales and margin by backlog/followon/new business by program/product.
12.20 Identify opportunities not included in the plan.
12.21 Schedule of pension funding payments.
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12 Finance
12.22 Describe cash disbursement practices.
12.23 Describe credit and collection practices.
12.24 Describe inter-company transactions and
related settlement procedures.
12.25 Provide a schedule of services provided by
12.26 Provide a schedule of aged accounts
receivable for the past 2 years and a
reconciliation of accounts receivable aging to
reported accounts receivable balance in financial
12.27 Provide a summary of primary components of
inventory including types and locations.
12.28 Provide a schedule of changes in plant,
property and equipment and depreciation
reconciled to general ledger balance.
12.29 Provide a summary of accrued liabilities by
major categories (payroll, interest, etc.).
Data Room
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13 Information
13.1 Information Technology Budget vs. Actual
(Operating and Capital) with breakdown (by
month, business/Corporate, resource, labor,
telecom, maintenance, facilities, depreciation,
amortization, other) for past 2 years, current year,
and next year forecast.
13.2 List of IT financial commitments including
committed payment schedules.
13.3 Company IT infrastructure architecture
definition and technical standards.
13.4 List of sites supported by IT including number of
users and size of local IT staff for each and user
support or help desk approach.
13.5 Applications portfolio including a list of business
processes supported by the applications.
13.6 Complete asset listing of hardware and software
both owned & leased, including operating
systems, applications by function (HR,
manufacturing, etc) and development type
(proprietary, third party, etc) and type of licenses
and available seats information, hardware (pcs,
business systems platforms), desktop software
suite, virus scanning software, network (LAN,
wan, internet, intranet) infrastructure, capacity or
stress testing programs/results, email,
EDI/external interfaces, servers, routers,
controllers, switches, outsourcing arrangements,
Company internet access description (for
employee usage), ISO certification status and
13.7 Copies of all hardware lease or purchase
13.8 Copy of all software licenses agreements
(including personal computer software license
agreements) annotated by vendor, license count,
financial value and identifying which are company
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13 Information
13.9 Hardware and software by platform or function
(i.e. mainframes, midrange or servers, and
personal computers).
13.10 Identify any outside personnel (for example,
contractors, outsourcer, corporate-level
employees) used to support the computing
systems and/or computing infrastructure and cost
for services.
13.11 Data communication network schema with
equipment for each site: including Local Area
Network (LAN) and Wide Area Network (WAN)
13.12 Brief description of Web strategy and ECommerce direction.
13.13 Brief description of general controls, including
backup, disaster recovery plans, documentation
and control over software.
13.14 Schema of hardware components, layouts of
rooms and facilities used to house all hardware
components. Review Cooling facilities, uninterruptible power supplies (UPS), security
provisions, and any plans for expansion for each
13.15 Copy of major project plans for active systems
and software development projects showing cost,
ROI projections, budgets, schedule,
modifications, and scope of the projects.
13.16 Information on systems development tools,
methodologies and languages used to support
the current environment.
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14 Warranty
14.1 Describe guaranty/warranty/return policies and
procedures. Include any related written materials
and any documents creating any expenses or
implied warranties with respect to the products
manufactured or distributed or services provided
by the Company.
14.2 Have there been any warranty claims (including
lawsuits) concerning the Company’s products
within the last 5 years? If so, please explain.
14.3 Have there been any recalls or any other postmanufacturing remedial measures (“remedial
measures”) taken with respect to any product
defect, alleged or otherwise, or service performed
by the Company within the last 5 years, or are
any such remedial measures currently pending,
or planned or anticipated by the Company? If so,
please explain.
14.4 Is warranty expense “pay as you go” or
reserved in the P&L and balance sheet?
14.5 Are there any oral warranties issued for the
Company’s products? If so, describe such
warranties including their terms, to whom they
were issued, by whom they were issued, and
when they were issued.
14.6 Is the Company aware of any defects or other
potential problems with its products or services
which could give rise to a warranty claim
including any defects or problems with
specifications or drawings for said products?
Data Room
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15 Environmental,
Health and Safety
15.1 Any environmental audit or compliance reports
prepared by in-house staff or outside consultants.
15.2 All notifications received from any federal, state,
local or foreign governmental agency alleging
violations of any environmental laws by the
Company and which have not been resolved, or
which were received in the last 5 years.
15.3 All notifications received by the Company from
any federal, state or local governmental agency
of any potential liability of the Company under the
Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA" or
"Superfund"), the Resource Conservation and
Recovery Act ("RCRA") or similar federal or state
statutes or municipal ordinances.
15.4 Summary of all other claims or proceedings
against, or investigations of, the Company by any
governmental agency or private entity relating to
the release or discharge of any hazardous
material into the environment or relating to
employee health and safety.
15.5 All environmental permits relating to the
operations of the Company, excluding land use
15.6 Listing of any other known current violation or
liability under environmental or health and safety
laws or regulations with respect to the facilities
now owned or operated by the Company.
15.7 List of operating locations at which friable
asbestos is present, and a copy of any asbestos
survey and management plans for such locations.
15.8 For each of the last 5 years, the OSHA
recordable injury rates per 100 employees and
lost day injury rates per 100 employees of each
business and facility, as well as the overall
Company rates.
Data Room
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15 Environmental,
Health and Safety
15.9 A list of all off-site waste (whether hazardous or
non-hazardous) disposal facilities historically
used by the Company.
15.10 A list of all off-site waste (whether hazardous
or non-hazardous) disposal facilities currently
used by the Company.
15.11 A list of all known locations of releases of
hazardous or toxic substances on, in or under (a)
real property previously or currently owned,
leased or operated by the Company or (b) real
property adjacent to real property previously or
currently owned, leased or operated by the
Data Room
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16 Technology
16.1 Product specifications.
16.2 List and description of new products under
16.3 Research and Development plans, expenditures
and associated schedules for the past 5 years.
16.4 Competitive product evaluations.
16.5 Design and Development (D&D) Engineering
process description including systems, h/w and
s/w development.
16.6 Engineering D&D performance data (metrics
and trend analysis).
16.7 Engineering change data, including trends,
analysis, unincorporated changes for each
drawing (hanging paper), Configuration Control
16.8 List of all CAD/CAM s/w including all modeling
simulation software (include version and mod)
and library models.
16.9 Manufacturing process description.
16.10 Manufacturing Statistical Process Control
(SPC) data on all manufactured product.
16.11 List and identify all manufacturing equipment
showing book value.
16.12 Identify all WIP and completed goods
16.13 Resumes of key engineering personnel.
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16 Technology
16.14 Identify any single source parts or assemblies
and the manufacturer used in the products.
16.15 Brief description of type, location, condition
and adequacy of engineering space and
16.16 List and describe all special test equipment.
Data Room
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17 Security
17.1 Does the Company have a facility clearance? If
so, provide a copy of the DD441 and DD441-1 or
other US Government agency clearance
17.2 Does the Company have US Government
and/or foreign government contracts involving
classified information? If so, identify.
17.3 Provide latest copy of the SF 328 or 441s
(Certificate pertaining to Foreign Interests).
17.4 Does the Company have any Foreign National
person(s) (non-US citizen who is not a Resident
Alien) working or assigned in the Company? If
so, how many and which countries? Is a
Technology Control Plan (TCP) implemented and
has it been approved by DSS?
17.5 Does the Company have any Special Access
Program (SAP) contracts? If so, with which
Government agencies? Is there any ongoing
litigation because of a SAP access
denial/revocation by the Government? How many
SAP customers does the Company have?
17.6 Does the Company have any Sensitive
Compartmented Information (SCI) contracts? If
so, with which Government agencies? Is there
any ongoing litigation because of a SCI access
denial/revocation by the Government? How many
SCI customers does the Company have?
17.7 How many employees hold a security clearance
and/or special accesses and at what level?
Identify Top Level, Secret, Confidential, Limited
Access Authorizations (LAA), SCI, SAP, and total
number of employees in the Company.
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17 Security
17.8 Provide copies and responses for all security
audits from all cognizant agencies for the last 2
17.9 Does the Company have a full-time or part-time
Senior Security Officer (SSO)? Provide name
and telephone number and indicate to what
management position and level the SSO reports.
17.10 Are there any Representatives of Foreign
Interests (RFIs) employed by the Company? If
so, identify.
17.11 Does the Company conduct drug screenings?
Identify type of screening.
17.12 Are pre-employment background checks
conducted by the Company?
17,13 Does the Company have a security guard
force? Provide total number of guards and
identify if they are proprietary or contract and if
they are represented and if so by which union.
17.14 Identify any security issues or conflicts which
may affect or arise from the proposed
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18 Company Culture
18.1 Describe your company culture (core
values, founding principles, genesis of).
18.2 Describe the way things work at your
company (unwritten ground rules,
operating environment).
18.2.1 Official work hours (include casual
Fridays, 9/80 work week, holiday
schedule, flextime/ telecommuting
arrangements, etc.).
18.2.2 Dress code.
18.2.3 Employee activities, events, etc.
18.2.4 Learning environment.
18.2.5 High Performance Teams (e.g.,
18.3 What is your company leader’s work
18.3.1 Informal vs. formal
18.3.2 Dominant vs. easygoing
18.3.3 Controlling vs. Analyzing vs.
Promoting vs. Supporting
18.3.4 Compare to Raytheon leader's work
style, or your perception of it.
Data Room
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18 Company Culture
18.4 What are your team dynamics? How
do you energize your team? Your
18.5 Identify the change leaders in the
18.6 Identify the most respected people in
the organization.
18.7 What do the key employees envision
their role to be in the new organization?
The CEO?
18.8 What are the keys to your success?
Where do you need help? What should
be left alone?
18.9 What are your recommendations for
how the new organization should be run?
18.10 Describe the ways you communicate
with employees (e.g., frequency, format).
What is most effective?
18.11 Describe your compensation / reward
philosophy (e.g., link to performance
such as ROIC).
18.12 Provide employee surveys.
Data Room
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19 Communications
19.1 Process for Public Release of company
information (news releases, public
announcements, other). What is the
review chain (position titles)?
19.2 Process/practice of communicating with
employees (methods of information
delivery, frequency, types of information
19.3 Marketing/Advertising/Public Relations
Agency of Record.
19.4 Contracts/Agreements with any outside
vendors or service providers (graphics,
video production, graphics, printing,
advertising placement, other related).
19.5 Examples of business logo: letterhead,
website, business card, collateral
19.6 Expectations of ongoing use of
company name/brand/logo?
19.7 Assessment of public reputation
(customers, media, general market). Is
company considered reliable,
trustworthy, quality of service/product
delivered? Are there any media issues
that have been or may have to be
19.8 Community involvement –
sponsorships, employee involvement,
degree of participation in local market
Data Room
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Appendix International
Issues for consideration when evaluating international
• Country Risks
Changing socio-economic and political environment
Monetary and fiscal policies
Repatriation of investment and earnings
Tariff/import restrictions
Price controls
Government subsidies
• Financial Risks
Structure of company and what segments are critical
Financial statement conversion (migration from local GAAP to IAS
(International Accounting Standards) and conversion to US GAAP)
Time required to verify assets/liabilities by contacting key customers
and vendors
Tax, including VAT and other business taxes
• Legal Risks
Type of acquisition structure – assets or stock/ownership interest
Country restrictions on foreign ownership
Laws/rules/regulations that govern commercial activities and
intellectual property transfer
Existing litigation, claims, investigations
Required transaction approvals (e.g., EU Antitrust, Country-specific,
workers' council, USG)
When company has US operations, does the company employ practices
consistent with its US operations, and to what extent?
Privacy laws
Appendix International
• HR Risks
Country-specific labor laws impacting employment, severance (if
applicable), benefits and employer social contribution obligations
When benefits are accrued and vested
Existence of workers' councils/labor unions/collective bargaining
agreements/co-determination: what is required for purposes of
notification and required transaction approval, impact on synergies
from any required guarantees
Management culture, strength of key employees
Copies of employment contracts (privacy issues)
• IT Risks
Platform compatibility (cost to support other homegrown systems)
• Real Estate Risks
Specific in-country transfer restrictions

Overhead template - ValuePoint Solutions