130 EAST 59TH STREET • NEW YORK, NEW YORK 10022 • 212.759.2888 • INQUIRY@PALCAPITAL.COM  

A. Organizational Documents and Information.

1. Charter documents, by-laws or other organizational documents, as amended, of the Business or any entity related to the Business.

2. List of all jurisdictions in which the Business does business, and foreign qualification documents in each jurisdiction where qualified.

3. List of all assets to be acquired. 4. List of all existing directors, managers, partners and officers of the Business. 5. List of all persons and entities that have ownership or economic interest in any

asset or business to be acquired.

B. Securities. 1. For each component of the Business, where applicable, please provide:

a. list of the current owners (including amounts) for each type, series and class of security;

b. stockholder agreements and all other documents, if any, relating to any such securities including, without limitation, the voting, purchase, issuance or sale thereof; and

c. information on any 3rd parties who have any interest in any aspect of the Business, which will survive the acquisition.

C. Indebtedness.

1. Schedule of indebtedness (including off balance sheet items), including amounts currently outstanding, and all documentation relating thereto.

2. Loan agreements, indentures, revolving credit agreements, note purchase agreements, notes, letters of credit or other evidences of indebtedness and all related documents (including all amendments) concerning any debt financing.

3. Mortgages, security agreements, pledges, other evidences of liens, including any such documents evidencing any lien, security interest, claim or other encumbrance on the Business or any assets related to the conduct thereof.

4. Company and personal guarantees. 5. All other financing documents, such as sale and leasebacks, installments sales,

letters of credit, vendor financing programs and capital lease agreements related to the Business.

6. Any other documents, business arrangements, or oral agreements that concern any asset to be acquired.

 

 

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D. Employee Benefits and Other Employment Matters.

1. Schedule of personnel of the Business, together with a description of their compensation, the history of their past three years compensation, 2010 target compensation, future compensation (formal or informal), benefits, job description, other factors pertinent to employment, and copies of all agreements with any such person.

2. All employee benefit, pension, health, medical, deferred compensation, profit- sharing, equity appreciation, equity incentive, stock option, phantom stock, bonus, incentive or severance arrangements, plans, programs or agreements (oral, written or otherwise) pertinent to employees to be hired in connection with acquisition.

3. Each of the foregoing items: a. all plan texts and agreements (including, but not limited to, trust

agreements, insurance contracts and investment management agreements);

b. all material employee communications (including all summary plan descriptions);

c. the three most recent annual reports, and all management reports relating to employment matters compiled during that period,

d. the most recent annual and periodic accounting of plan assets, if applicable;

e. the most recent determination letter received from the Internal Revenue Service, if applicable; and

f. in the case of any unfunded or self-insured plan or arrangement, a current estimate of accrued and anticipated liabilities thereunder.

4. Employment, compensation, consulting, severance or other similar agreements or arrangements related to the Business, including copies of all such agreements related to content used in the Business.

5. Forms of confidentiality, non-competition, non-solicitation and/or invention agreements for officers, directors, employees, consultants, representatives and suppliers to, for or of the Business, together with list of persons who have signed the same. List of employees who have not signed the standard form agreements and copies of the agreements, if any, that any such person has signed.

6. Collective bargaining and other labor agreements, together with a description of any significant labor problems or union activities that the Business has experienced including human rights or similar complaints.

7. Personnel manuals and employee handbooks.

 

 

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E. Other Material Agreements.

1. Agreements, in principal or otherwise, with respect to mergers, acquisitions or sales of material assets or securities of, by or with respect to the Business, whether or not consummated.

2. License agreements (as licensor or licensee), including: a. those related to publications, websites, software, patents, copyrights or

trademarks used in or useful to the Business, and b. in any event, all such agreements with the licensing/strategic partners

3. Distribution, fulfillment, franchise, sales representative, agency, or commission agreements related to the Business.

4. Material sales and purchase contracts and supply agreements related to the Business.

5. Joint venture or partnership agreements related to the Business. 6. Material maintenance or repair agreements related to the Business. 7. Any agreements with respect to which the Business has any liability or obligation

related to the Business involving more than $10,000 contingent or otherwise, which relates to the assets to be acquired.

8. Any agreements related to the Business that may extend after the closing. 9. Any agreements related to the Business that place any material limitation on the

method of conducting or scope of the Business. 10. Agreements related to the Business under which the amount payable by the

Business is dependent on the revenue, income or similar measure of the Business entity related to the Business or any other person or entity.

11. Powers of attorney related to the Business. 12. All printing and distribution agreements related to the Business. 13. Schedule of all central services provided by the Business whether allocated or not. 14. Copy of allocation accounting policy for central services. 15. Description and supporting documentation for any affiliate or inter-company

contracts, arrangements or understandings related to the Business, including any such contracts, arrangements or understandings involving the sharing of overhead costs, expenses or resources.

16. Please provide a copy of all contracts relating to the design, maintenance, operations, monetization and publishing of the all websites relating to the Business

17. Please provide a list of all parties that have executed any of the following types of agreements and provide those agreements for review:

a. Consultant Agreement b. Contributor License

Agreement

c. Photographer/Illustrator License Agreement

d. Sales Representative Agreement.

 

 

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F. Properties.

1. All documents, including title insurance policies, surveys, appraisals, structural reports, etc. relating to real property owned or used by the Business in the conduct of the Business (including easements and rights of way).

2. Environmental reviews, audits, studies or similar evaluations of compliance with environmental laws or exposure to environmental liabilities, including details of any environmental investigations or complaints relating to real property owned or used by the Business in the conduct the Business.

3. List of all locations where any employees, consultants, managers, or assets relating to the Business are located or from which the Business (or any portion of the Business) is conducted, along with copies of all leases and non-disturbance agreements (if any) related thereto.

4. Agreements for the construction or alteration of property, plant or material equipment for real property used or to be used in the conduct of the Business.

5. Schedule and diagram of space currently occupied by the Business.

 

 

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G. Intellectual Property.

1. List of all trade names used in the Business. 2. List of all URLs, Internet domains, and proprietary software used by the

company. Please provide a detailed accounting of the ownership of such URLs, Internet Domains, and software.

3. Please list all: a. patents, trademarks, service marks, copyrights and other intellectual

property related to the Business; b. applications and registrations for any of the foregoing; and c. correspondence to or from examining authorities or other parties

regarding such registered intellectual property, applications and registrations.

4. All documents, correspondence, memoranda, legal opinions, notes and other papers analyzing or assessing the validity or scope of any intellectual property related to the Business.

5. Correspondence or other documentation dealing with actual or alleged infringement of patents, trademarks, copyrights, trade secrets or other intellectual property rights related to the Business.

6. All documents, correspondence, memoranda, notes, legal opinions, and other papers analyzing or assessing the Business’s or any entity related to the Business freedom to make, use, sell, offer to sell, export or import any of the Business’ products or services.

7. All agreements relating to intellectual property rights, options to intellectual property rights, licenses, or other interests in intellectual property related to the Business.

8. Copies of all contracts with independent contractors who have worked on the development of any of the Business’ products or services.

 

 

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H. Tax and Financial Information.

1. Five years of management accounts, annual balance sheets, and 2010 year to date budget and projections, as well as any projections for the next five years.

2. Description of subscriber base, as detailed as possible. 3. Schedule detailing revenues from online and print subscriptions for the past five

years, and month-by-month projections for the next five years. 4. Schedule of historical estimated 2010 and projected revenue from advertisement,

differentiated by source (print, online, etc.). 5. Breakdown of subscription (print only, web only, web and print) and analysis of

renewal periods for each subscription type. 6. List of all jurisdictions in which the Business, any entity related to the Business,

or parent company, files tax returns with respect to the Business or any assets used in the conduct thereof, and a description of all taxes paid.

7. List of all jurisdictions in which the Business or any entity related to the Business has received notice from any authority in any jurisdiction where it does not file tax returns that the Business (or any asset, product or service of the Business) is subject to taxation in such jurisdiction.

8. Schedule of all pending or threatened audits of any kind. 9. For each of the last three years, copies of all tax returns (federal, state or local)

filed by the Business or any entity related to the Business with respect to the Business or any assets used in the conduct thereof.

I. Insurance.

1. Current insurance policies (such as property, general liability, product liability, excess liability (umbrella), life, accident, indemnity, casualty and business interruption) covering the Business and its assets, products and services, and a schedule of any existing claims under any of the foregoing.

2. Any notices or other correspondence indicating termination of any coverages, proposed increases in premiums, or the refusal to cover (or reservation of rights with respect to) any claim against the Business related to any insurance policy covering the Business or any of its assets, products or services.

3. Any claims under such policies relating to the assets to be acquired.

 

 

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J. Legal Matters.

1. Schedule of all threatened or pending litigation (including investigations, prosecutions and other legal or governmental proceedings of any kind) involving or related to the Business.

2. Litigation files, including pleadings, status, etc. for all matters related to the Business during the past three years.

3. All letters or other correspondence related to the Business and threatening litigation or similar proceedings.

4. Outstanding judgments, decrees, injunctions, consents, orders, etc. requiring payment or limiting the Business, and all settlement agreements related to the Business.

5. Description and listing of current reserves for litigation and other contingencies related to the Business.

K. Regulatory and Related Matters.

1. All filings, reports, correspondence, orders, etc., relating to federal, state or local governmental regulatory agencies related to the Business and made or received during the last three years.

2. List of all required or advisable government and non-governmental certifications, licenses, permits, authorizations, approvals and similar items, and copies of all such items, held by the Business or any entity related to the Business with respect to the Business or any asset, product or service.

3. Copies of any complaints, suspensions or similar notices or correspondence received during the last three years with respect to any of the foregoing certifications, licenses, permits.