MEMORANDUM FOR A TYPICAL COMPANY

Set forth below is a list of the documents we would like to review for due diligence purposes in connection with the proposed purchase of shares of preferred stock of XYZ (the "Company").

All documents requested below are with respect to the Company, its subsidiaries and any joint ventures involving the Company or any of its subsidiaries and should be provided with respect to all periods since the founding of the Company, unless otherwise specified.

The list represents a standard due diligence request list and attempts to be over-inclusive rather than under-inclusive.  We understand, therefore, that certain items may not be appropriate to the Company, its subsidiaries and joint ventures, and others may need to be added as we become more familiar with the Company, its subsidiaries and joint ventures.

I.      Corporate Books and Records

II.     Financial Information

III.    Employee Materials

IV.    Contingent Liabilities

V.     Contracts, Agreements, and Other Arrangements

VI.    Proprietary Rights

VII.   Plant, Property, and Equipment

VIII.  Insurance

IX.    Sales / Marketing

X.     Miscellaneous

I.          CORPORATE BOOKS AND RECORDS

1. Charter and By-laws

2. Minutes of meetings and unanimous written consents (since date of incorporation) of the Company, any of its subsidiaries and any joint venture involving the Company or any of its subsidiaries

   Officers' and directors' questionnaires prepared in connection with the most recent proxy statement of the Company
   

   Shareholders
   

   Qualifications and Registrations
   

3. Reports to Shareholders

 II.         FINANCIAL INFORMATION

1. Financial Statements

   Tax Materials

   Indebtedness

2. Miscellaneous

III.       EMPLOYEE MATERIALS

1. Agreements

   Benefit Plans

2. Organizational Information

IV.       CONTINGENT LIABILITIES

1. Litigation

2. Regulatory Compliance

 V.        CONTRACTS, AGREEMENTS AND OTHER ARRANGEMENTS

1. Not in the Ordinary Course of Business

2. In the Ordinary Course of Business

VI.       PROPRIETARY RIGHTSVII.      PLANT, PROPERTY AND EQUIPMENT

1. Real Property

   Personal Property

2. Miscellaneous

VIII.     INSURANCE

1. List and description of all material property, casualty, liability and other insurance policies

   Any directors' and officers' liability insurance policies

   Description of present reserves for, and all potential claims with respect to, any self-insurance

   History of all insured claims including paid, reserved, and related expense amounts (first dollar loss run)

   Loss runs for workers' compensation and general liability

   Loss history for any self-insurance (first dollar loss run)

2. Loss prevention/control recommendations made by insurers, brokers or consultants

 IX.       SALES/MARKETING

1. Description of the markets in which the Company, its subsidiaries or any joint venture involving the Company or any of its subsidiaries operate, identifying the type of customers and the size of the overall market (by value)

2. Identify any customers which account for more than 1% of annual sales of the Company, its subsidiaries or any joint venture involving the Company or any of its subsidiaries or, if there are more than ten such customers, the ten largest customers

 X.         MISCELLANEOUS

1. Press releases 

   Listing and description of subsidiaries, joint ventures, partnerships, etc.

   Description of any future acquisition or disposition plans

   Description of any future restructuring plans

2. Description of Company's information management system, including any future changes planned.

Give us a call to discuss your financing needs.  

t.609.457.8500
f.800.878.8263
funding@southxcapital.com