Letter

of Intent or Memorandum of
Understanding Checklist


1) Long or Short Form?
2) Binding or Non Binding?
3) Parties to the Transaction
4) Transaction Structure
5) Purchase Price and Terms/Consideration
a) Downpayment
b) Promissory or Loan Notes
c) Performance Payments and Earnouts
d) Royalty Fees
e) Purchase Price Adjustment Assumptions
f) Liabilities to be assumed
6) Assumptions Underlying the Valuation
7) Board Representation
8) Employee Agreements
9) Future Roles for Management Team
10)Treatment of Target Company Employee Stock Options
11)Employee Issues
12)Acquisition Agreement/Definitive Agreement
13)Other Deal Specific Issues
14)Due Diligence Review
a) Financial
b) Commercial
c) Legal
d) Environmental
15)Time Table and Closing
16)Representations and Warranties
17)Closing Conditions
18)Shareholder Voting Agreement/Proxy
19)Exclusivity
20)Confidentiality
21)Publicity
22)Rights of Cancellation or Termination
23)Fees/Costs and Expenses
24)Break Up Fees
25)Binding / Non Binding Provisions
26)No Intent to Create Legal Relations
27)Designation of Negotiators
28)Applicable Law