A more recent version of these Due Diligience Chart notes – written by Cambridge And Oxilp And College Of Law students – is available here.
The following is a more accessble plain text extract of the PDF sample above, taken from our Private Acquisitions Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Due Diligence Issue Key Contracts
Articles of Association
Competitors could use *
Price adjustment the same software or
Enter into exclusivity products agreement
Contract/products not *
worth as much
Restricts scope of use
Applicable for an asset purchase The contract can be terminated
Change of Control
Can terminate on written notice resulting in the loss of an important contract
Breached already so could be sued or contract terminated
Other shareholders can prevent the Buyer from acquiring the entire share capital of the Target if they decide to exercise their preemption rights
Need consent - condition precedent Warranty that there have been no breaches and that any debts are fully paid up
Seek a waiver of change of control clause
Make SPA conditional on waiver
Enter into a new contract
Sellers obtain permission to disclose details of contract, if the answer is no then reevaluate purchase price
Or indemnity for breach
Remover pre-emption rights on transfer from articles
Ask sellers to obtain a written waiver of preemption rights from the
How do they intend to use the contract & IP rights?
How key to the deal is this contract?
Is an exclusivity deal a viable option?
Is there an alternative supplier that could be used?
Have there been any breaches or are there any potential breaches?
Is there any other product that could be used?
Is termination likely?
Confidentiality Has there been any waiver of confidentiality?
Have pre-emption rights been followed in the past - have there been valid transfers in the past?
Buy the full version of these notes or essay plans and more in our Private Acquisitions Notes.