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DUE DILIGENCE CHECKLIST

Previously Provided

Provided Herewith

To Be Provided

N/A

1. 1.1 1.2 1.3

Corporate Documents : Certificate or Articles of Incorporation of the Company, as amended to date. Bylaws of the Company, as amended to date. All actions of the board of directors of the Company and all committees thereof since inception, including the minutes of all board meetings and any actions by written consent. All actions of the stockholders of the Company since inception, including the minutes of all stockholder meetings and any actions by written consent. Charter documents of any subsidiaries of the Company. A list of each jurisdiction in which the Company and its subsidiaries do business, and any licenses relating thereto. Copies of Certificates of Authority, Qualification to Do Business, Good Standing and Tax Status for the Company and any of its subsidiaries for each such state. A list of any additional states in which (a) property is owned or leased, (b) products are produced or sold, (c) employees, consultants or distributors reside or operate on behalf of the Company, or (d) there are any material contractual relationships.

1.4

1.5 1.6

2. 2.1

Customers and Suppliers: List of the Companys top 20 customers (including addresses and telephone numbers, if possible), and a breakdown by revenue per customer.

2.2

List of the Companys top 20 suppliers (including addresses and telephone numbers, if possible), and a breakdown by purchases per supplier and indicating any sole-source supplier. Copies of all outstanding agreements with customers and suppliers relating to annual sales or purchases of supplies or services in excess of $10,000. A list of all unfilled orders.

2.3

2.4

3. 3.1 3.2

Material Contracts : Any sales, agency, distribution or marketing contracts to which the Company is a party. Any joint venture, participation and partnership agreements to which the Company is a party. All material documents relating to any major acquisition, disposition, reorganization or other extraordinary corporate event of material significance to the Company. Any stockholder agreement relating to any subsidiary of the Company. Agreements relating to any transaction with any insiders (e.g. directors, officers, key employees and major stockholders), including loans, leases, purchases or sales of property, etc. Any other contracts which are material to the Companys business.

3.3

3.4 3.5

3.6

4.

Real and Personal Property:

5.

Intellectual Property:

5.1

Copies of all existing licenses to use computer hardware and computer software and all existing contracts or leases conveying to the Company rights regarding any facility, equipment, hardware, software or other material asset or service used in or relating to the business of the Company. All patent, trademark, copyright and intellectual property agreements, to which the Company is a party. List of any United States and foreign patents, trademarks and copyrights held by the Company, including pending applications, with descriptive dates, titles, numbers, and jurisdiction, and a copy of the certification of registration, if any. Documents relating to any conflicts, interferences, third-party suits and patent oppositions and all internal memoranda, external reports and correspondence concerning possible infringements of intellectual property rights of others or by others. A list of all licenses, franchises, royalty agreements, marketing agreements, distributorships, sales representative agreements, or similar commitments or arrangements relating to the products of the Company or related technology granted to third parties by the Company or by any third party to the Company. Agreements, options or other commitments giving anyone any rights to acquire any right, title or interest in any products or related technology of the Company.

5.2

5.3

5.4

5.5

5.6

6. 6.1

Corporate Financings : All agreements relating to current or future debt (including reimbursement) obligations for borrowed money, including agreements to acquire any such debt obligation of others or for a leasing transaction.

7.

Securities Matters:

7.1

All agreements, private placement memoranda, prospectuses or offering circulars relating to sales or attempted sales of equity or debt securities of the Company within the past five years and copies of any written proposals and memoranda of any oral proposals for the acquisition of the Companys securities since inception. Current list of all stockholders, warrantholders and optionholders showing name, address, amount held, price paid, date of purchase, exercise price and expiration date. A schedule of all outstanding conversion privileges, including date of issuance, exercise or conversion prices and amount exercised. List of any persons holding preemptive or registration rights with respect to securities of the Company and copies of all relevant documents. Each form of subscription, stock purchase or other agreement used in connection with sales of shares. All material communications to stockholders of the Company since inception. Schedule of all dividend declarations, associated record dates and payments since inception. Any buy-sell, voting trust or other agreements in effect among stockholders of the Company. Any agreements restricting the transfer of stock of the Company or any subsidiary. Correspondence and filings with federal and state securities commissions with respect to shares and options issued to date. All permits to issue securities obtained within the past five years, including copies of the applications for all permits, whether or not a permit was issued with respect to such application.

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9 7.10

7.11

8. 8.1

Financial Information: All financial statements, whether audited or unaudited, and unaudited quarterly financial statements for the past five years. Any sales and budget or other financial projections of the Company for future periods, if available. Description of any change in accounting policies or procedures since inception. Accounts payable and accounts receivable aging reports since inception. A description of the manner in which the Company calculates its allowance for doubtful accounts. Reports to the Company for the last five years by independent public accountants, including, but not limited to, management letters and letters regarding control systems, methods of accounting, etc.

8.2

8.3 8.4 8.5

8.6

9. 9.1

Management/Employees: All effective employment agreements, consulting agreements, management agreements and non-competition agreements. Any material agreements regarding severance pay to the Company employees. Confidentiality agreements with Company employees. List of all current employees of the Company, including job descriptions, current rate of compensation for each such employee, and all accrued bonuses, vacation and sick pay for each such employee.

9.2 9.3 9.4

9.5 9.6

Schedule of all employees by category (e.g., sales, administration, etc.). Agreements in effect with any person with respect to election or appointment as an officer or director. Any indemnification agreements with any employees or directors. Distribution, sales representative, agency and dealer agreements in effect. Salesperson commission agreements. Executive compensation plans. All documentation relating to previous employment of the Companys key employees or consultants insofar as such employees or consultants may have potential trade secrets, noncompetition restrictions or other restrictions carried over from previous employers. Any labor/collective bargaining agreements. Details of material grievances, terminations, labor disputes, work stoppages, etc. since inception, indicating the disposition or status thereof.

9.7 9.8 9.9 9.10 9.11

9.12 9.13

10. Benefits Plans: 10.1 All stock option, bonus, retirement, profit sharing, incentive compensation, pension and other employee benefit plans or agreements to which the Company is a party. Any employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA)) which is subject to any provisions of ERISA, that is maintained, administered or contributed to by the Company and covers any employee or prior employee of the Company.

10.2

10.3

Any plan or arrangement providing for insurance coverage (including any selfinsured arrangement), workers compensation, disability benefits, supplemental unemployment benefits, severance pay, vacation pay, deferred compensation, bonuses, profit sharing, stock options or other forms of incentive compensation or post-retirement insurance, compensation or other benefits which has been promised, by any officer or other employee authorized to do so, or entered into, maintained or contributed to by the Company and covering any employee or prior employee of the Company.