Business Due Diligence Report

BUSINESS DUE DILIGENCE REPORT

RECITALS

WHEREAS, Client Name: engages Consultant Name: to perform a diligence review of the business operations, financial condition, legal exposures and material agreements of the Target Company identified below; and

WHEREAS, the parties intend that the findings documented in this Business Due Diligence Report will be used by Client for the purpose of evaluating a potential transaction or investment involving the Target Company; and

WHEREAS, Consultant will rely on information provided by Target Company, Client, and third-party providers as described in the Limitations section, and will prepare observations, risk assessments and recommendations as set forth in this report.

ENGAGEMENT DETAILS

Report Date:    Engagement ID:

Jurisdiction of Incorporation:    Incorporation Date:

SCOPE OF WORK

The Consultant will perform a targeted diligence review including document review, interviews with management, and analysis of financial, legal, operational and commercial matters. Specific areas reviewed and methodologies are detailed below.

EXECUTIVE SUMMARY

FINANCIAL REVIEW

Fiscal Year End:    Last Audited Financials:

LEGAL & REGULATORY REVIEW

Active litigation    Potential claims    Regulatory inquiry or notice

OPERATIONAL REVIEW

COMMERCIAL / MARKET ASSESSMENT

INTELLECTUAL PROPERTY & CONTRACTS

ENVIRONMENTAL & COMPLIANCE

RISK ASSESSMENT

Significant Risk Indicators (mark all applicable):
Financial irregularities or restatements    Material legal exposure    Regulatory or compliance risk
Customer concentration    Intellectual property risk    Operational continuity risk

Overall Risk Rating:

PAYMENT TERMS

Fee Amount: $    Payment Schedule:

Late Payment Fee:

Reimbursable Expenses: Consultant will invoice reasonable, documented out-of-pocket expenses. Details:

TERM AND TERMINATION

Engagement Start Date:    Expected Completion Date:

Either party may terminate this engagement for material breach if the breach is not cured within days' written notice. Termination will not relieve Client of obligation to pay for work performed and documented expenses up to the effective date of termination.

CONFIDENTIALITY

Consultant and Client acknowledge that during the engagement they will have access to Confidential Information (non-public information concerning business, financial, technical or other affairs). The Consultant shall: (a) use Confidential Information solely for the purposes of performing the Scope of Work; (b) restrict disclosure to employees, agents or professional advisors with a need to know and who are bound by confidentiality obligations no less protective than those herein; and (c) exercise at least the same degree of care to protect Confidential Information as it uses to protect its own confidential information, but in no event less than reasonable care.

Confidential Information does not include information that is or becomes publicly available without breach of this agreement, is lawfully received from a third party without obligation of confidentiality, or is independently developed by the receiving party without use of the disclosing party's Confidential Information.

LIMITATIONS AND RELIANCE

The findings in this report are based on documents, interviews and representations made available to Consultant as of the Report Date. Consultant has not conducted an independent audit or forensic investigation unless expressly stated. Client may rely on the report for internal evaluation and transaction decision-making, but reliance by third parties requires the prior written consent of Consultant. Consultant disclaims liability for matters outside the scope of the engagement and for any unknown or undisclosed facts.

GOVERNING LAW

This Engagement and this Report shall be governed by and construed in accordance with the laws of: , without regard to conflict of laws principles. Any dispute arising out of this Engagement shall be resolved in the courts of that jurisdiction unless the parties otherwise agree in writing.

ENTIRE AGREEMENT

This Business Due Diligence Report, together with any engagement letter or written additions signed by both parties, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, understandings, or arrangements. No amendment of this Report will be effective unless in writing and signed by both parties.

CERTIFICATION

The undersigned Consultant certifies that, to the best of Consultant's knowledge after reasonable inquiry, the facts and observations set forth in this Report are accurate and fairly presented as of the Report Date, subject to the Limitations and Reliance section above.

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