Request For Qualification Power Purchase Agreement Development: Fill & Download for Free

Because these are mostly standard terms that appear in all similar contracts, whereas the things that differentiate one term sheet from another are major points such as the amount to be invested, the valuation of the company, the date of the closing, the allocation of board seats, etc.Those unique parameters are therefore listed up front and are typically the points that are subject to negotiation. In most cases (unless someone is trying to be very cute) the miscellaneous terms and conditions (sometimes referred to as “boilerplate”) will be similar—if not identical—among term sheets from different investors and are therefore included at the end.Representations and Warranties of the Company. By executing this Agreement, the Company makes the following representations, declarations, warranties and covenants to the Subscriber as of the date hereof, with the intent and understanding that the Subscriber will rely thereon:Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own and lease its properties, to carry on its business as presently conducted and as presently proposed to be conducted and to carry out the transactions contemplated hereby. The Company is qualified as a foreign corporation in all such other jurisdictions, if any, in which the conduct of its business as presently conducted or as presently proposed to be conducted or its present ownership, leasing or operation of property requires such qualification and where the failure so to have qualified would have a material adverse effect on the Company.Authorization; Issuance. The execution, delivery and performance by the Company of this Agreement have been duly authorized (or will be duly authorized prior to the issuance of the Securities, as applicable) by all requisite corporate action by the Company; and the Transaction Documents have been (or upon delivery will have been) duly executed by the Company and will constitute the valid and binding obligation of the Company, enforceable in accordance with its terms except: (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights; and (ii) general principles of equity that restrict the availability of equitable remedies. The issuance, sale and delivery of the Securities have been duly authorized (or will be duly authorized prior to the issuance of the Securities, as applicable) by all requisite corporate action of the Company.No Conflict; Governmental and Other Consents.The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not (i) result in the violation of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound (including federal and state securities laws and regulations), (ii) result in the violation of any provision of the certificate of incorporation or bylaws of the Company, and (iii) conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under or give to others any rights of termination, amendment, acceleration or cancellation of, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company except in the case of clauses (i) and (iii) to the extent that any such violation, conflict or breach would not be reasonably likely to have a material adverse effect on the business of the Company.No consent, approval, authorization or other order of any governmental authority or other third-party is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Securities, except such post-Closing filings as may be required to be made with the SEC and with any state or foreign blue sky or securities regulatory authority.Representations and Warranties of the Subscriber. By executing this Agreement, the Subscriber makes the following representations, declarations, warranties and covenants to the Company as of the date hereof, with the intent and understanding that the Company will rely thereon:The Subscriber acknowledges that it has based its decision to invest on the information contained in this Agreement and the confidential term sheet distributed to Subscriber by the Company, and has not been furnished with any other offering literature or prospectus.The Subscriber acknowledges that Subscriber has read, understood and is familiar with the Risk Factors contained herein, is familiar with the nature of risks attending investments of this type, has determined that a purchase of the Securities is consistent with Subscriber’s investment objectives and reasonable in relation to the Subscriber’s net worth and financial needs.The Subscriber specifically acknowledges that it obtained the advice of its tax advisor to the extent the Subscriber deems necessary and to its satisfaction regarding the tax implications of an investment in the Securities.The Subscriber represents and warrants that it is acquiring the Securities for its own account as principal for investment and not with a view to resale or distribution and that the Subscriber will not sell or otherwise transfer the Securities except in accordance with applicable securities laws and the terms of the Note.The Subscriber has such knowledge and experience (together with its advisors, if any) in financial and business matters, and in particular the evaluation of early stage companies such as the Company, such that it is capable of evaluating the merits and risks of its purchase of the Securities as contemplated by this Agreement; and understands that the Company has no or a limited financial or operating history, the Securities are a speculative investment which involves a high degree of financial risk, and there is no assurance of any economic, income or tax benefit from such investment.The Subscriber represents and warrants that it is able to bear the economic risk of losing its entire investment in the Securities.The Subscriber represents and warrants that (i) ) is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the 1933 Act, (ii) it has adequate means of providing for its current needs and contingencies, (iii) it has no need for liquidity in its investment in the Securities, (iv) it maintains its principal place of business at the address shown on the signature page hereto, (v) all of its investments in and commitments to non-liquid investments are, and after its purchase of the Securities will be, reasonable in relation to its net worth and current needs, and (vi) the financial information provided by it accurately reflects its financial condition, with respect to which it does not anticipate any material adverse changes.The Subscriber understands that the Securities have not been registered under the Securities Act, or the securities laws of any state and, as the result thereof, are subject to substantial restrictions on transfer.The Subscriber has been advised and is aware that there is no public market for the Securities, nor is one expected to develop as a result of this Offering. The Subscriber agrees and understands that it will not sell or otherwise transfer any Securities or any interest therein unless the Company approves the transfer or sale, and the Subscriber provides the Company with an opinion of counsel which is satisfactory to the Company (both as to the issuer of the opinion and the form and substance thereof) that the Securities may be transferred in reliance on an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws.The Subscriber understands that no federal or state agency has approved or disapproved the Securities, passed upon or endorsed the merits of the offering thereof, or made any finding or determination as to the fairness of the Securities for investment.The Subscriber acknowledges that all material documents, records and books pertaining to this investment have, on its oral or written request, been made available to the Subscriber and to its advisors.The Subscriber acknowledges that the Company has made available to the Subscriber the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the Offering and to obtain any additional information, to the extent that the Company possesses such information, or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information given to the Subscriber or otherwise to make an informed investment decision.The Subscriber understands that the Securities are being offered and sold in reliance on specific exemptions from the registration requirements of federal and certain state securities laws and that the Company and controlling persons thereof are relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings set forth herein in order to determine the applicability of such exemptions and the suitability of the Subscriber to acquire the Securities.The Subscriber represents that neither it nor any of its directors, executive officers, or other officers participating in the offering of Securities is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act.The Subscriber understands the meaning and legal consequences of the foregoing representations and warranties which are made for the purpose of qualifying such Subscriber as a suitable Subscriber. The Subscriber certifies that each of the representations and warranties set forth in this Section 8 is true and correct as of the date hereof and shall survive such date. The Subscriber understands that a false representation may constitute a violation of law and any person who suffers damage as a result of a false representation may have a claim against the Subscriber for damages. The Subscriber understands that the Company has the right to request additional information or corroboration.Indemnification. The Subscriber acknowledges and understands the meaning of the representations made by it in this Agreement and hereby agrees to indemnify and hold harmless the Company and all persons deemed to be in control of any of the foregoing from and against any and all loss, costs, expenses, damages and liabilities (including, without limitation, court costs and attorneys, fees) arising out of or due to a material breach by the Subscriber of any such representations. All representations shall survive the delivery of this Agreement and the purchase by the Subscriber of the Securities.The Company hereby agrees to indemnify and hold harmless the Subscriber from and against any and all loss, costs, expenses, damages and liabilities (including, without limitation, court costs and attorneys, fees) arising out of or due to a material breach by the Company of any representations and warranties set forth in this Agreement. All representations and warranties shall survive the acceptance of this Agreement by the Company and the purchase by the Subscriber of the Securities.Information Rights. So long as the Securities remain outstanding, the Company shall deliver to the Holders copies of all quarterly financial statements and narrative update reports that are prepared by management.Confidentiality. The Subscriber agrees that all information contained in the Note and all other proprietary information that the Subscriber has received or will receive from or as a security holder of the Company will be held by the Subscriber in the strictest confidence. Such information will not be used by the Subscriber for any purpose other than as a security holder in the Company and will not be disclosed to any other person by the Subscriber. Notwithstanding the foregoing, Subscriber may disclose financial information related to the Company to (i) the stockholders of Subscriber to the extent Subscriber is a corporation, (ii) the partners or members of Subscriber to the extent Subscriber is a partnership or limited liability company, as applicable, (iii) investors in Subscriber, (iv) employees of the Subscriber, and (v) advisors of the Subscriber, in each case, so long as such persons are under an obligation of confidentiality no less stringent than as set forth herein and Subscriber remains liable to ensure such stockholders, partners, members, investors, employees or advisors, as applicable, do not make unauthorized use or disclosure of such information.Notices. Notice, requests, demands and other communications relating to this Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, on the seventh day after the posting thereof; (c) sent by a nationally recognized overnight courier, on the next business day after deposit thereof, or (d) faxed, telecopied or e-mailed, on the date of such delivery to the address of the respective parties as follows:If to the Company, to: XXX with a required copy to: YYYIf to a Subscriber, to Subscriber’s address as shown on the signature page hereto, or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by telecopy or cable shall be confirmed by letter given in accordance with (a) or (b) above.Governing Law; Jurisdiction. This Securities Purchase Agreement shall be governed and construed in accordance with the laws of the State of New York without regard to its conflicts of law principles.EACH OF SUBSCRIBERS AND THE COMPANY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF NEW YORK AND NO OTHER PLACE AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS SECURITIES PURCHASE AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH OF SUBSCRIBERS AND THE COMPANY ACCEPTS FOR ITSELF AND HIMSELF AND IN CONNECTION WITH ITS AND HIS RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS SECURITIES PURCHASE AGREEMENT. EACH OF SUBSCRIBERS AND THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN THE MANNER AND IN THE ADDRESS SPECIFIED IN SECTION 12 OF THIS SECURITIES PURCHASE AGREEMENT.EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SECURITIES PURCHASE AGREEMENT OR THE ACTIONS OF EITHER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SECURITIES PURCHASE AGREEMENT. IN THE EVENT OF LITIGATION, THIS SECURITIES PURCHASE AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.Miscellaneous.All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require.This Securities Purchase Agreement is not transferable or assignable by Subscriber.The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Subscriber and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns.None of the provisions of this Securities Purchase Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Subscriber.In the event any part of this Securities Purchase Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement.The invalidity, illegality or unenforceability of one or more of the provisions of this Securities Purchase Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Securities Purchase Agreement in such jurisdiction or the validity, legality or enforceability of this Securities Purchase Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.This Securities Purchase Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.The terms and provisions of this Securities Purchase Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.The headings used in this Securities Purchase Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.This Securities Purchase Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.If any recapitalization or other transaction affecting the capital stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Securities Purchase Agreement, to the same extent that the Securities, immediately prior thereto, shall have been covered by this Securities Purchase Agreement.No failure or delay by any party in exercising any right, power or privilege under this Securities Purchase Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Of course. That’s exactly what “due diligence” is all about. How thorough an investor will be depends to some extent on the professionalism of the investor, the size of the investment, and the stage of the company, but the checking will almost certainly entail requesting and reviewing all of the startup’s financial accounts and projections, customer contracts, cap table, IP filings, etc. (That’s one reason that a platform like Gust Launch can be so useful, because it ensures that everything is appropriately tracked and recorded.)Here is a typical business diligence checklist for an angel or venture investment:Company OverviewArticulate the “equity story” here (i.e. why the company is on to something and why its stock will appreciate greatly). Is it compelling?Does the company engage in thorough business planning?Does management have a clear understanding of the challenges it faces and a realistic plan to address them?Are there any skeletons in the company’s closet from previous activities (e.g. outstanding liabilities, unassigned IP)?Management TeamAre all resumes and personal references available?What key strengths does the management team have collectively and individually?What holes are there in the team and how/when might they be filled?Have there been any disgruntled employees and, if so, why? Do these employees cause any tangible risk going forward?What strengths does the Board bring to the company? How might it be augmented?Is there a Board of Advisors, and, if so, how active is it?MarketingDoes the company have a well-defined sense of what its true market is?·Is this market sufficiently large and fast-growing to be attractive?Is the company’s market generalized or niche?If generalized, does the company stand out from competitors?If niche, will the company dominate sufficiently to either build attractive cash flow or be bought by a larger firm?Is the company the leading firm in its market? Market share?What barriers to entry does the company enjoy? How long lasting are they?Does management understand the key metrics to measure its business and does it track its progress effectively? How do the metrics compare to similar firms?Does the company have a sensible business model?SalesDo customer reference calls bear out claims management make about demand for their products/services?Is the company pipeline attractive? What is the probability that it will hit its targets?Does the sales strategy make sense? What could be done to improve it?Can the company acquire customers profitably?Is the company’s sales cycle better or worse than its competitors and is it attractive?CompetitionDoes the company know who its competitors are, including indirect competitors?Where does the company stack up vs. competitors? Can it win business from them?Has the company focused its business plan narrowly enough to limit its competition?How well-funded is the competition?Product DevelopmentIs the product a need-to-have, a nice-to-have, or a luxury? Does it solve a critical problem or enable growth (if B2B)/provide entertainment (if B2C)?Describe the customer demand in detail?Has the company proven adept at product development? Does it have an adequate technical team?Did product development flow from perceived (or better yet researched) customer demand or from some other impetus? Explain.Intellectual PropertyDoes the company have an appropriate IP strategy? Explain.Are there any issues relating to patents or intellectual property?Production / Operations (HR, Customer Support, Fulfillment, Returns, Distribution Logistics)Do the management team and other employees enjoy appropriate incentives to run the company for the long term?Are the interests of management aligned with ours?Are total labor costs appropriate?Does the company have a realistic plan for managing its back office and customer support? Will it be able to handle customer growth while maintaining customer satisfaction?Financing StrategyIs the valuation attractive? What is the projected times money returned and IRR (if calculable)? Is the risk-adjusted return attractive?Does the company have a thorough plan as to what it will do with our money? Is it sensible?Is the company raising the right amount of money?What financing risk exists in the business plan? How much additional money must they raise and how flexible (in amount and timing) can they be in raising it?FinancialsDoes the company have a realistic set of projections based on reasonable assumptions?Are the projections bottom-up (good) or top-down (not so good)?Does the company have good operating leverage?Are the margins attractive (absolutely and relative to competitors)?Has the company met, exceeded or fallen short of its previous budgets? Analyze variances.Assets and PropertyAre there any issues here?Customer ReferencesWrite up summary of reference calls.Do customer reference calls bear out claims management make about demand for their products/services?Are there any issues flagged by customers? Does management recognize and admit to (without prompting) these issues?Contracts and AgreementsReview all contracts with legal counsel and flag any issues, risks or omissions.Corporate DocumentsReview all corporate documents with legal counsel and flag any issues, risks or omissions.TaxesReview company tax situation and analyze effects on cash flow over next several years.InsuranceAssess adequacy of insurance coverage and analyze risk to investment thesis of any insurance gaps.And here’s the legal/financial due diligence checklist that would accompany it in the case of a full venture or strategic round:“Please furnish for our review copies of the following documents or indicate in writing on a copy of this list that none exist. In addition, please provide a written summary of each oral agreement or arrangement which is responsive to the requests set forth below. Any documents identified as originals will be returned to you promptly.Unless otherwise indicated, (i) all requests are for any matters which are currently existing and in effect or which occurred at any time since the Company’s incorporation but which are not now existing or in effect, and (ii) each request applies to all past and present direct or indirect subsidiaries (if any), and all predecessors, whether corporations, partnerships or joint ventures. For purposes of this request, all such entities are included in the term “Company.” Where there is no information responsive to the request, please so indicate by writing “N/A” or the equivalent in the margin.I. Corporate Records.Chart showing, or a narrative description of, the corporate, partnership, limited liability company structures (parents, all subsidiaries and other financially or legally related entities) and ownership (including the number of shares and/or percentage of ownership) of the Company.Copies of the certificates of incorporation, by-laws, partnership agreements, operating agreements and other similar organizational documents of the Company.Stock record books and copies of all stock certificates, including reverse sides, of the Company and affiliates.List of all subsidiaries and affiliates of the Company, if any.List of jurisdictions in which the Company is qualified or has applied for qualification to do business and evidence of such qualification or application.List of jurisdictions where the Company has substantial contacts (e.g., real or personal property owned or leased, employees, sales representatives, etc.).List of the Company’s current shareholders, the numbers of shares owned and the consideration paid for such shares.Warrants, stock options, agreements relating to any warrants or options to purchase securities, any convertible security and other rights to subscribe for or purchase securities.Schedule of all outstanding stock options and warrants, including name of individual, grant date, expiration date and exercise price, of the Company.Voting agreements, voting trusts, shareholder agreements or other similar arrangements with or among shareholders or equity owners of the Company.Stock purchase and repurchase agreements.Stock restriction agreements.Registration rights agreements.Minutes or other records of meetings of the Board of Directors, committees of the Board of Directors or shareholders of the Company.All materials distributed to members of the Board of Directors, committees of the Board of Directors or shareholders of the Company since incorporation or organization (or written consents in lieu of meetings).II. Employee Benefit Plans and Other Employment Matters.Employment, consulting, compensation or other agreements or arrangements to which any director, officer or employee of the Company is a party.Copies of any provisions of any contract or arrangement, pursuant to which any director or officer (or other applicable principals, partners or members) of the Company is insured or indemnified in any manner against liability.All documents relating to pension, deferred compensation, stock option (including SARs), profit sharing and any other similar plans of the Company, all IRS determination letters relating to the foregoing and the most recent actuarial report for any defined benefit pension plan for the Company.All other employee compensation, bonus, incentive, benefit (e.g., life or health insurance) or similar plans of the Company, including plan evaluation and actuarial evaluation reports.Any standard form employment agreements used by the Company as well as any agreements that deviate in any material respect from such standard forms, and all severance or special termination agreements with senior management of the Company.Information with respect to any pension benefit plan subject to Title IV of ERISA maintained by an entity other than the Company which is, or was within the past five years, in a single controlled group with the Company.All collective bargaining agreements to which the Company is a party or by which it is bound, including any side letters.Any policy manuals or materials with respect to trade or employment practices of the Company.Confidentiality, proprietary rights, and non-competition agreements (i) between the Company and any officer, director, employee, consultant, representative, supplier or customer or (ii) which the Company’s employees or consultants have entered into with a prior employer.Information as to employment arrangements and/or compensation plans where any benefits or rights are triggered by a change in control of the Company, including any so called “golden parachute” or similar arrangements.Information as to employment arrangements and/or severance plans where any benefits or rights are granted upon severance or termination of an employee, whether or not in connection with a change in control of the Company.Any contracts for consulting or management services.III. Regulatory MattersAll applications, filings, findings, reports, registration statements, correspondence, complaints, consent decrees, determinations, orders, etc., relating to federal regulatory agencies and all foreign, state and local agencies performing similar functions. Include all exhibits for all filings, unless duplicative of material requested elsewhere.IV. Properties, Assets, and Leases.List of all real property owned, leased (as lessee or lessor) or used by the Company including all documentation of ownership, leasehold interest, any encumbrances or restrictions against transfer on such property, and any title insurance policies or title searches.List of all intangible or intellectual property e.g., patents, trademarks, copyrights, trade names, trade secrets and customer lists owned, leased, licensed or used by the Company and any patent or trademark registrations or similar documents in any domestic or foreign jurisdiction. Please include any required permits, licenses, approvals, related regulatory reports, or agreements and any actual or threatened claims of infringement or misappropriation.List of all fixed assets, personal property and equipment owned, leased or used by the Company including all documentation of ownership, leasehold interest or any encumbrances or restrictions against transfer of such property.With respect to all of the properties and leases described in this Item IV, please identify any officers, Directors, shareholders or employees of the Company holding an interest in such properties or leases.V. Material Agreements and Financing Documents.Loan agreements, lines of credit, indentures, revolving credit agreements, note purchase agreements, notes, other evidence of indebtedness and all related documents concerning any debt financing.Venture capital financing documentsAny agreements in principle or otherwise with respect to mergers, acquisitions, divestitures or sales of material assets of the Company, whether or not consummated.Mortgages, security agreements, pledges and other evidence of liens or letters of credit securing any obligations of the Company.Corporate and personal guarantees of any obligations and powers of attorney executed in the Company’s name.Schedule and copies of all contracts, agreements, arrangements or understandings under which the Company (i) has any surviving representations or warranties or any ongoing obligation to indemnify, defend or hold harmless any party, (ii) is subject to any other material commitment, contingency or liability or (iii) which restrict in any manner the right of the Company to conduct its business or to compete with any partyList of bank accounts belonging to the Company and its affiliates.Correspondence and internal memoranda relating to any documents requested in this Item V.VI. Marketing, Sales and Operations.Licensing agreements (including inter-company).Patents, patent applications, trademarks, trademark applications and copyrights (domestic and foreign), service marks (domestic and foreign) and documents relating to know-how, trade secrets, and other proprietary information used by the Company.Promotional material, sales literature and other advertising documents distributed to potential customers.Agreements with any educational institutions or relating to the Company’s provision of private student loans.Joint venture, partnership and limited partnership agreements.Agency, commission, distribution, franchise or sales representative agreements.Governmental contracts, agreements or purchase orders.Agreements under the which the company is obligated to provide or purchase a material amount of goods or servicesAll other contracts (including executory contracts) material to the Company.VII. Accounting, Financial and Insurance Matters.2004 annual and 2005 year to date monthly financial statements (including balance sheet and income statement).All documentation relating to any transaction between the Company and any director and officer including any loans or similar arrangement.Budgets, fiscal projections and strategic plans, together with a review of or comparison with actual results, if available.Summary of federal, state, local and foreign income tax status, including consents and agreements with any tax authority or any pending or threatened disputes concerning tax matters and all audit papers and communications between the Company and the Internal Revenue Service.Any documents relating to liabilities and obligations, including material contingent liabilities, write-downs or write-offs of notes or accounts receivable, incurred otherwise than in the ordinary course of business since formation.Copies of all insurance policies and a history of insurance claims, with details of any pending claims or incidents which may arise in claims.VIII. Legal Proceedings.List and description of all material litigation, administrative proceedings, arbitration proceedings, investigations, claims or disputes (including pending or threatened litigation or claims) involving the Company or any principal shareholder, officer, director, principal, partner or member of the Company as a plaintiff or defendant.All consent decrees, judgments, other decrees or orders, settlement agreements, injunctions or similar matters (continuing or contingent) to which the Company is a party or involving any person in his capacity as a shareholder, officer, director principal, partner, member or employee of the Company.Documentation with respect to any pending or threatened disputes with any governmental agency to which the Company is or may become a party.All correspondence dealing with actual or alleged infringement of patents, trademarks and copyrights.Any waivers or agreements canceling claims or rights of substantial value other than in ordinary course of business.IX. All other materials and documents involving the Company, not otherwise covered by the foregoing items, which, in your judgment, may be material to the business of the Company or which should be reviewed in making disclosures regarding the business and financial condition of the Company.”

Below please find a complete Basic Procurement Plan I prepared for any Project I worked on. I developed specific Procurement Plans based on this template according to each project’s scope. I worked for an Engineering Company that developed projects for different Clients. It is a fairly comprehensive Plan and can serve as the basis for a any Procurement Plan you may need (I hope it helps you):“Procurement PlanCompany will be responsible for all procurement activities and will oversee and direct these activities to ensure the work is performed in accordance with project procedures, budget, and schedule. Additionally, the project procurement team will oversee and coordinate all procurement activities performed from other Company offices worldwide.In coordination with Client’s procurement team assigned to the project, Company will develop a project specific procurement plan, based on Client’s requirements and Company’s established Procurement Procedures and Work Instructions. The plan will detail the procurement organization and procurement philosophies that will guide the project. This plan will identify critical items and define specific procurement requirements such as, but not limited to, RFQ and Purchase Order formats, Terms and Conditions for purchase, authority for project costs, bidders lists, domestic and international sources, purchasing strategies, negotiation requirements, methods and levels of expediting and shop inspection, transport and shipping terms, export crating requirements, and any other issues, pertinent instructions and policies such as import requirements, vendor assistance, spares, manuals, etc.Company will issue Procurement Procedures that will become part of the Project Procedures.Concurrently with the development of the project schedule, Company will coordinate the overall procurement schedule based on engineering schedules and the overall project schedule.Company will do its utmost to pursue any market edge, particularly in the case of bulk materials such as structural steel, piping, and mechanical and electrical supplies. The object is to find any additional benefit, both in price and delivery, among worldwide suppliers to help the project.Company will access its worldwide organization for information such as surveys of market conditions, special discounts, low pricing of particular materials, excess production, or any situation that could benefit the project.Additional sources of supply can be analyzed and considered, such as used equipment, economy on bulks given purchasing on other projects or by Client, savings given commercial agreements between countries (e.g., Mercosur, European Common Market Agreement, North American Free Trade Agreement, etc.), freight savings with charters shipping, excess materials on other projects being managed by Company, etc.1. PurchasingCompany’s worldwide procurement network for support in purchasing, inspection, and expediting is available to the Client Project. Our extensive vendor database coupled with Company’s buying power will guarantee the project the most commercially competitive and reliable equipment and materials in the world.Company uses its project controls system for all procurement processes. We will execute the procurement phase of the project in our offices in “City”. The “Name Specific” procurement system covers all procurement activities and allows an overall control of these activities, taking into account all related activities from requests for quotations up to materials management at site. The system can be tailor programmed to the scope of each project, in this case beginning with basic and detailed engineering and later to construction. The system has been applied with success in a series of projects both locally and worldwide. The system is an “Summarily explain System”.Company has extensive in-house procurement experience in various local projects related to every aspect of engineering, procurement and construction activities. This experience has been obtained from feasibility to construction projects, either under an EPC or EPCM administration. During these projects almost any conceivable mine and plant equipment has been quoted, negotiated, purchased, inspected, expedited, shipped, imported, warehoused and delivered to site for final erection. This world-class purchasing experience related to mining installations particularly in “Indicate Country” demonstrates our capability and expertise in worldwide sourcing of diverse “Indicate Type” equipment and materials.Company already has an extensive database of worldwide equipment and material suppliers fed into the system. The database is continuously updated and evaluated as ongoing projects are implemented and executed. With the large number of “Indicate Country”’ installations that are continuously being constructed, upgraded, expanded or modified, most of the international equipment suppliers have relatively large local representations that are easy to contact and are permanently available. Company also has extensive worldwide offices available for global procurement and contacts as required.During the purchasing phase of the project, activities such as the following are considered:Preparation of Bidders List for Main Equipment and MaterialWorldwide sourcing will be utilized to locate the appropriate suppliers and equipment. Company will issue a Bidders List from its system (with sufficient number of bidders to ensure competition) and, once commented and agreed upon with Client, will be used as the basis for the various quotations. If Client wishes to consider a sole source for any given supply, this will be taken into consideration in the RFQ phase.Bid PackagesCompany will prepare, whenever technically possible and commercially attractive, bid packages that will generate a final reduction in supply costs.Preparation of Commercial DocumentsCompany will agree, in conjunction with Client the standard commercial documents to be used in the project.Preparation of RFQ’sRequests for Quotation will be prepared in our system in accordance to the documents and bidders already approved by Client. Bids will be requested care of Company as Agents for Client.Issue of RFQ´sCompany will issue Quotations in accordance to the agreed schedule defined in the system. Offers will be requested as per agreed project requirements.Selection of Supplier and Recommendation of PurchaseOnce Company presents Client with the respective commercial and technical evaluations, a pre-selection will be made of those suppliers to be invited to negotiate the equipment. Once negotiated, Company will present a Letter of Recommendation to purchase the equipment from a specific Bidder.Spare Parts Recommended in Start-Up and Related CostRFQ’s will clearly require from each bidder the recommended overall spare parts list for the quoted equipment and their respective cost. Company will indicate said scope and value in the final purchase order only to maintain said values firm for one year as of the purchase order issue. The final scope and value are excluded from the purchase orders as Client will specify, negotiate and purchase all the spares required for the project.Supervision Scope and CostsEach bidder will be requested to quote supply scope and pricing for supervision (erection, start-up and training). In the case of major equipment, a Lump Sum Pricing will be requested for these services.Vendor Assistance and RepresentationCompany gives special emphasis to local vendor representation (accountability) and assistance and can negotiate inside the price of equipment assistance without cost for a given period.Guarantees and Warranties on Deliveries, Cost and PerformanceSpecial care is given to vendor guarantees (periods and scope) and formality of specific bonds that back the vendor offer.OEM ManualsAll manuals will be collated and delivered to Client by Company. Ten copies will be requested of each plus a complete CD with the same information, as per contractual requirement.Export PackingCompany will request each Bidder to indicate the cost of export packing for quoted equipment if not included in the final price. This will avoid future non-considered back-charges.FOB Cost for Equipment and MaterialsAll offers must indicate their final FOB value (all local taxes included) that will allow a better negotiation with freight forwarders and a better grasp on project costs.Dimensions and Weights for Freight and TransportEach supplier must clearly indicate the weights and dimensions of supplied equipment and materials, packing included, especially those pieces considered over-dimensioned or overweight.Vendor Procurement, Fabrication and Delivery of Equipment and DrawingsEvery bidder must deliver a clear and comprehensive schedule of procurement, fabrication and deliveries both for drawings and supplies. Company’s commercial documents clearly specify remedies and/or liquidated damages given late deliveries of both drawings and goods.Vendor Equipment SpecificationsEach vendor must deliver their equipment and supply specification’s as per the requirements specified in the respective RFQ’s, allowing a comprehensive technical evaluation of their offers.Bid Opening and EvaluationBids will be opened with the formality and personnel specified in Procurement Procedures. Once opened, Procurement and Engineering will independently evaluate the bids commercially and technically. Once finished a Technical-Economical evaluation summary will be presented to Client so as to define final bidder or bidders with whom to continue negotiations.NegotiationsFinal negotiations will be held with defined bidder or bidders. The Procurement Manager will develop a negotiation strategy between Client and Company’s project management to define objectives, cost, terms and schedule details. The Procurement Manager will direct, control and document all negotiations.Letter of Recommendation to PurchaseAfter all commercial and technical issues are resolved to satisfaction of both procurement and engineering, a Letter of Recommendation to purchase will be issued to Client by Company, based on the best-evaluated price, technical acceptability, and scheduled delivery. This award recommendation will be submitted by the Company project manager for approval.Issue Purchase OrdersUpon approval of the award recommendation, Procurement will prepare and issue the purchase order based on the final specifications, negotiations and conditions. All purchase orders will be issued by Company acting as agent for Client.ReportsCompany will issue comprehensive and tailor-made reports as per Client’s requirements. The system has the capability of issuing all procurement reports to meet specific requirements and needs. Specific reports and report formats will be defined early in the project to supply comprehensive information to all those involved.2. ExpeditingCompany’s expediting function during the initial project stages will insure that all documentation for the bid process is received within schedule. In the first stages of the purchase orders it will guarantee that all drawings and vendor data are submitted on time and according to the negotiated terms of the purchase order.Expediting during the second stage of the project will allow a comprehensive control and reporting down to each line item on each purchase order. This will allow the project to continuously monitor every piece of equipment and/or material, no matter how small, to permit the procurement team to address any problem issue, promptly and efficiently.Company will expedite both local and offshore procurement, and the status of the expediting will be reflected on regular and comprehensive reports to be issued periodically per project requirements.Local expediting will be done directly with the suppliers and vendors. Offshore expediting will be done with the local representatives, if the purchase order was processed through their facilities and/or through Company’s worldwide installations whenever required.Expediting will be begun together with the purchase order follow-up and its application will be based upon the Expediting Program prepared for every purchase order and taken from the system. Expediting is linked directly to equipment and material inspections. In the case of offshore purchasing, either Company’s offices abroad or an independent inspecting contractor will supply the necessary personnel to pursue expediting and inspection on vendors’ premises. Every report issued from this source will be incorporated into the procurement program and respective inspection and expediting status reports.Expediting will identify the potential problems and hold points on every purchase order so that any necessary adjustment or action can be taken to maintain the agreed delivery dates with each vendor. This could imply an intensification of shop expediting, overtime work, extension of the ongoing shifts, expediting suppliers, helping the vendor detect critical items on their fabrication and/or supply program, shortening the cycle of drawing revisions, or requesting the project manager’s intervention through project personnel visits to the shop or wherever necessary.Additionally, during the expediting and inspection phases of projects, Company can use their worldwide network of companies located from the U.S: (East and West Coast), to Canada, Europe, South Africa and the Far East. This will give the project the capability of efficiently and economically inspecting and expediting offshore equipment and materials.3. InspectionCompany will ensure that the Supplier Quality Program for each Purchase Order is in place, that the specified quality surveillance level is appropriate to the material or equipment being purchased, that an Inspection Plan has been prepared, and that inspection assignments are made to, and carried out by, the appropriate Company office or contracted agency. Company will make use of its extensive worldwide network of engineers and inspectors to optimize both the cost and opportunity of inspection activities no matter where the vendor facilities are located. The overall Inspection Plan considers the following:Supplier Quality ProgramEngineering will furnish a Supplier Quality Program whenever applicable to a purchase order. This program includes the Vendor Quality Plan (VQP), Quality Program Requirements, and Quality Surveillance Instructions.Inspection of Work in Progress at Vendor FacilitiesQuality Surveillance LevelEngineering will determine the quality surveillance level and indicate the level (0 through 4) on the Vendor Quality Plan (VQP).Inspection PlanA Supplier Quality Surveillance and Shop Expediting Visit Plan will be prepared for every purchase order considered for inspection.Inspection AssignmentInspection assignments for individual purchase orders will be assigned to Company inspectors most economically and expeditiously available. Where no Company coverage exists, assignments will be made to contracted agencies. When and wherever appropriate, specific key engineers from the Client task force will participate in shop inspections.Notification of InspectionIt is the vendor’s responsibility to notify the project of readiness for a particular hold point, witness point, or final inspection as indicated on the VQP.InspectionDuring the initial visit to a vendor’s facility, the inspector will verify the inspection program with emphasis on the following:- Scope of inspection in accordance with Vendor Quality Plan (VQP).- Supplier progress evaluated against applicable schedules.- Verify approval of all drawings.- Verify welding procedures are approved and welders are qualified.- Random witness welding to verify procedures, qualifications and techniques.- Ensure welding consumables are being properly controlled and stored.- Review mill test reports to verify materials meet specifications.- Monitor material inspection program and transfer of material marking.- Random inspect edge preparation, root gap and fit-up on fabrication.- Ensure full penetration welds are provided where specified.- Perform random check of back gouging on pressure retaining welds.- Inspect critical/major materials of sub-vendors, or audit sub-vendors’ work.- Verify measurement and test equipment calibration.- Check nozzles and man-ways for size, thickness, rating, projection, etc.- Perform dimensional inspections on attachments, internal and external.- Make complete dimensional inspection prior to hydrostatic testing.- Verify that temporary attachments have been removed and inspected.- Verify or witness mechanical/electrical testing as per engineering.- Verify NDE procedures and NDE qualifications.- Maintain records to ensure vendor has performed non-destructive examination.- Final visual inspection for quality of work, packing, tagging and marking.- Verify hardness values are as required.Release for ShipmentA final inspection will be made when all outstanding items of equipment have been completed and all outstanding matters from previous inspections or communications have been resolved. Equipment or materials may be released for shipment when all required items have been inspected and accepted, all deficiencies and non-conformances have been resolved, and final documentation is complete.Inspection WaiverAn Inspection Waiver must be completed whenever a required inspection is to be waived.Deficient and Nonconforming ItemsDeficiencies or non-conformances identified during inspection will be processed and documented.Records/DocumentationIn accordance with the VQP, the vendor will be required to submit certain records as evidence of inspections, tests, certifications, qualifications, etc. These records will be submitted to the project during shop inspections, upon request, or with the final documentation package as identified by the purchase order.Final Inspection/Release of Equipment at Vendor FacilitiesInspectors will carry out all final inspection and testing in accordance with the VQP and equipment specifications to complete the evidence of conformance of the finished item to the specified requirements. No items will be released until all the activities specified in the VQP and equipment specifications have been satisfactorily completed and the associated data and documentation is available. If a third-party inspector or client representative is to participate in a final inspection, advance notice must be given to the Manager of Inspection/Expediting so this procedure can be allowed for in the Inspection Plan.Inspection Status at Vendor FacilitiesInspection and test status will be controlled through the use of completed and signed off VQP and supporting inspection records.Control of Non-conformance Items at Vendor FacilitiesAll non-conformances will be reported to the project as soon as possible. The defective item should be segregated when possible. The Inspection/Expediting Manager will ensure that non-conformances are held from further processing until they are corrected.Packing and MarkingInspections will be performed at vendors’ plants, as necessary, to verify that the packaging, preservation and marking of materials ready for shipment are in accordance with the Packing, Marking and Shipping Instructions of the purchase order.4. TrafficTraffic activities will be delegated to a freight forwarder with known international experience and local capability. These services will be assigned after a formal commercial and technical bidding process. Company will administer and control the freight forwarder and define its responsibilities, reporting, control and activities. Their functions will be on a door-to-door basis and Company will participate in all negotiations related to freight (ocean, air and truck) and especially on over-dimensioned cargo. Company has an in-house Traffic Coordinator in the project organization whom will coordinate all traffic-related activities to and from the freight forwarder and the project.Special emphasis will be given to the freight, delivery and schedule of all cargo to avoid additional costs and delays on their delivery. Issues to be monitored include: ·Timely space reservationsExact dimensioning of cargoProper packing and shipping instructionsResponsibility for export packingOn and off-loading supervision on over-dimensioned cargoOffshore and local permits for over-dimensioned cargoDefinition of best ports for shipping and offloadingAccess restrictionsRequirement of ship cranes for off-loading over-dimensioned cargoDefinition of container rental or purchaseAvoidance of container “demourrage”4. Customs ClearanceCompany offers ample experience on recent construction projects, that include a “hands on” and comprehensive knowledge and management of activities related to customs clearance. Imports, duty payments, obtainment of tax exemption benefits, reduction of expenses due to delays or unnecessary cargo handling, process and acquisition of “Indicate Country” Customs, and coordination of all of these items will be controlled.Company can work either with Client or Company’s customs broker. In either case, Company will prepare a plan to coordinate all the necessary activities with the object of avoiding delays, optimizing cash flow, and having all the necessary import documentation, on time, and available at the moment of offloading the cargo in whatever mode of transport was chosen for each specific cargo.The steps to be taken into consideration are the following:Description, origin, weight, volume, measurements, mode of transport, RAS (Required On Site) Dates, etc., for very item on each purchase order.Engineering Company, freight forwarder, customs broker and transport companies.Obtainment of Special Import Benefits and respective import license, from “Indicate Country” Customs.Presentation of import documents to “Indicate Country” Customs and payment of duties before cargo is offloaded, but not before necessary, so as to optimize cash flow.Coordination of transport with freight forwarder to avoid any additional cargo handling due to unavailability of loading platforms for incoming cargo.Tax exemption benefits conceded by “Indicate Country” law will be duly processed. There are several international Free Trade Agreements and Regional Treaties, some recent, some still in process and others longstanding, that will be considered and used whenever applicable, to the full extent of the law.In general, a very close relationship must be maintained among all the parties involved in pursuit of an efficient and cost effective importation of cargo.Inventory ControlCompany’s controls system includes a Materials Management Module that is designed to track the receipt of material and equipment in and out of the project warehouse or storage location. It also allows full inventory control including overages, shortages and damages. This module is linked to the Procurement module for referencing purchase orders and expediting data, and to the Schedule Interface module for RAS (required on site) and installation dates. This module, fully proven and used in all of the latest projects Company has constructed in “Indicate Country”, is easily implemented and fed from the data incorporated into the system during the procurement and expediting stages. The module controls the following control points and documents:ReceptionIssue Pick TicketsInventory AdjustmentsBOM’sMaterials and EquipmentLocationAdditionally, the following reports can be issued, customized to each project and/or requirement:Material Receiving ReportShipments ReceivedPurchase Orders ReceivedPick TicketsWarehouse Material and Equipment InventoryMaterial and Equipment Inventory LocationsMaterial and Equipment Inventory ScheduleMaterial and Equipment TransactionsMaterial and Equipment SummaryUsing the system, Company will control all materials and equipment on site as of the moment the project begins. The information input can be easily exported to Client’s database if desired. The Material Controls Group will have the responsibility for receiving project equipment and materials on site based on the purchase order information, engineering specifications, drawings and the information supplied electronically by the expediting and inspection areas. Necessary steps will be taken to ensure that all cargo is received in the necessary conditions of quality and quantity, and delivered to the project contractors in the same conditions. In order to execute the work, the warehouse includes three well defined organizational areas that are detailed in the Project Procedures Manual:ReceptionIssuanceWarehouse Administration”