Mount Knowledge Holdings Inc.: Exhibit 10.1 - Prepared by newsfilecorp.com






LETTER OF INTENT


April 26, 2010


Mr. Simon Arnison 
Mount Knowledge USA, Inc. 
Vice
President, Secretary and Director
39555 Orchard Hill Place 
Novi, Michigan
48375 


Dear Mr. Arnison:


This letter confirms our non-binding mutual intentions with
respect to the potential transaction described herein between MOUNT KNOWLEDGE
HOLDINGS, INC., a fully reporting public Nevada corporation (“Purchaser and/or
MKHD”) and MOUNT KNOWLEDGE USA, INC. (“MTKUSA”), a privately-held Nevada
corporations and its Shareholders (“Shareholders”), hereinafter MTKUSA and the
Shareholders shall be collectively referred to as (the “Sellers”). This
document, in and of itself, does not represent an enforceable legal contract.


1. Definitive Purchase Agreement. All of the
terms and conditions of the proposed transaction shall be set forth in a
definitive agreement (the “Stock Purchase and Share Exchange Agreement”) to be
executed on or before June 30, 2010, with a subsequent date of closing (the
“Closing Date”), to be mutually agreed to by Sellers and Purchaser. Neither
party intends to be bound by any oral or written statements nor may
correspondence concerning the proposed Stock Purchase and Share Exchange
Agreement arising during the course of negotiations, notwithstanding that the
same be expressed in terms signifying a partial, preliminary or interim
agreement between the parties. 

2. Purchase of Stock. Sellers have agreed,
subject to the final approval by its shareholders and the execution of any
subsequent and/or required documentation, to sell to the Purchaser and the
Purchaser has agreed, subject to the completion of its due diligence and the
execution of a definitive agreement, to purchase from the Sellers any and all of
the issued and outstanding shares of Common and Preferred Stock, including any
issued Warrants for the right to purchase of Common Stock and/or Preferred Stock
of MTKUSA (collectively referred to as the “Shares”) owned and held by the
Shareholders of record of MTKUSA on the date of closing consisting of one
hundred (100%) percent of the beneficial ownership of MTKUSA. The proposed
transaction would make MTKUSA as wholly-owned and operated subsidiary of the
Company. 

3. Share Exchange (Consideration). In
consideration for the purchase by the Purchaser from Shareholders of any and all
of the issued and outstanding Shares of MTKUSA owned and held by the
Shareholders of record of MTKUSA as set forth in Section 2 hereinabove, the
Purchaser shall pay to the Shareholders of MTKUSA in form of a share exchange
with MKHD the same equivalent number of MKHD shares (one-to-one (1:1) basis) in the same series and/or
class of stock as owned and held in MTKUSA or such other mutually agreed upon
amount of shares, upon the terms and conditions to be set forth in an executed
Stock Purchase and Share Exchange Agreement. 

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4. Due Diligence Review and Access. Promptly
following the execution of this Letter of Intent, Sellers shall immediately
arrange for the Purchaser to have complete access to MTKUSA’s facilities and any
and all books and records, and shall cause the directors, employees,
accountants, and other agents and representatives (collectively,
"Representatives") of MTKUSA to cooperate fully with Purchaser and/or
Purchaser’s representatives in connection with the performance of any required
due diligence, including, but not limited to a complete examination of MTKUSA’s
assets and liabilities, financials, accounting controls and procedures, business
records, contracts, legal documents, shareholder agreements, offering
documentation or memorandums and/or any other materials deem necessary by
Purchaser generally required to complete a due diligence of MTKUSA as set forth
in the Due Diligence Check List attached hereto as Exhibit A. Any information
obtained by Purchaser as a result thereof will be maintained by Purchaser in
confidence. The parties will cooperate to complete due diligence expeditiously.


5. Conduct in Ordinary Course. In addition to the
conditions discussed herein and any others to be determined after the due
diligence process shall be contained in a Stock Purchase and Share Exchange
Agreement, subject to Sellers having conducted its business(s) in the ordinary
course during the period between the date hereof and the Closing Date and there
having been no material adverse change in the business(s), financial condition
or prospects. Sellers shall promptly notify Purchaser of any conduct of the
Company or material event, circumstance, or impairment to the Company’s business
or continuing operation and of any extraordinary transactions that may have an
effect on the value of the Company or its underlying assets and/or liabilities.


6. Open Private Placement Memorandum. Purchaser
acknowledges that MTKUSA currently has an ongoing Regulation D Rule 506 Private
Placement Memorandum (PPM) to raise a maximum of $1,500,000 dollars in equity
capital in MTKUSA, of which MTKUSA presented to MKHD as of the date of this
Letter of Intent that it has already raised a total of approximately $892,000
dollars to date. Both parties agree that MTKUSA shall be allowed to continue to
raise capital from its PPM during the due diligence period and until the Closing
Date at which time the shareholders of record of MTKUSA at such date would be
acknowledged and included in the executed Stock Purchase and Share Exchange
Agreement. 

7. Expediency. All the parties would use all
reasonable efforts to complete and sign a Stock Purchase and Share Exchange
Agreement on or before June 30, 2010 and to close the transaction as promptly as
practicable thereafter. 

8. Expenses. The parties agree that each party is
responsible for the payment of their respective expenses associated with the
execution, duties and responsibilities and enforcement of this Letter of Intent,
the Stock Purchase and Share Exchange Agreement and the transactions
contemplated hereby and thereby. 

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9. Broker’s Fee. All parties have represented to
each other that no brokers or finders have been employed who would be entitled
to a fee from Sellers by reason of the transaction contemplated by this letter
of intent and that if any such fee is required in the future, it shall be the
responsibility of the Sellers to make such payment(s). 

10. Public Announcements. Neither Sellers nor
Purchaser will make any announcement of the proposed transaction contemplated by
this Letter of Intent prior to the execution of the Stock Purchase and Share
Exchange Agreement without the prior written approval of the other, which
approval will not be unreasonably withheld or delayed, unless otherwise required
by rules and regulations imposed on Purchaser as a publicly traded company as
set forth by the Securities and Exchange Commission of the United States of
America. The foregoing shall not restrict in any respective ability to
communicate hereby to any of our respective affiliates’, officers, directors,
employees and professional advisors, and, to the extent relevant, to third
parties whose consent is required in connection with the transaction
contemplated by this Letter of Intent. 

11. Exclusive Negotiating Rights. In order to
induce Purchaser to commit the resources, forego other potential opportunities,
and incur the legal, accounting and incidental expenses necessary properly to
evaluate the possibility of acquiring the assets and business described above,
and to negotiate the terms of, and consummated, the transaction contemplated
hereby, Sellers agree that for a period of ninety [90] days after the date
hereof, Sellers nor its affiliates and their respective officers, directors,
employees and agents shall not initiate, solicit, encourage, directly or
indirectly, or accept any offer or proposal, regarding the possible acquisition
of MTKUSA by any other person other than Purchaser, including, without
limitation, by way of a purchase of shares, assets or otherwise. Purchase of
assets or merger, of all or any substantial part of MTKUSA equity securities or
assess, and shall not (other than in the ordinary course of business as
heretofore conducted) provide any confidential information regarding collective
assets or business(s) to any person other than Purchaser and our
representatives. 

12. Consents. Unless and until this Letter of
Intent has been terminated, Purchaser and Sellers and/or representatives of each
respective company as directed shall cooperate with each other and proceed, as
promptly as reasonably possible, to prepare and file the notifications required
by the SEC, or any other applicable Authority, and any other regulatory
governing body and will further seek to obtain all necessary consents and
approvals wherever needed or required from all other third parties, as may be
applicable, and to endeavor to comply with all other legal or contractual
requirements for or preconditions to the execution of a Stock Purchase and Share
Exchange Agreement. 

13. Confidentiality. Except as and
to the extent required by law, Purchaser shall not disclose or use, and shall
direct its representatives not to disclose or use, any Confidential Information
(as defined below) obtained from the Sellers and/or representatives of the
Company by Purchaser or its representatives in connection herewith at any time
or in any manner other than in connection with its evaluation of the transaction
proposed in this Letter.

For purposes of this Paragraph, "Confidential Information"
means any information about the Sellers and/or the Company stamped
"confidential", or identified in writing as such to Purchaser by the Sellers
and/or Company; provided that it does not include information which; (i) is or
becomes generally available to or known by the public other than as a result of
improper disclosure by Purchaser or (ii) is obtained by Purchasers from a source
other than Sellers and/or representatives of the Company, provided that
Purchaser is unaware that such source was not bound by a duty of confidentiality
to Company or another party with respect to such information. If the Binding
Provisions of this Letter are terminated, Purchaser shall promptly return to
Company any Confidential Information in its possession and certify in writing to
Company that it has done so. Purchaser and Company acknowledge and affirm a Non
Disclosure and Non Circumvent Agreement was executed between the parties prior
to or on the date of this Letter of Intent. 

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14. Non-Circumvention. Both parties to this
Letter of Intent shall not directly or indirectly circumvent, avoid, bypass, or
in any way obviate each other’s rights under this Letter of Intent, including
but not limited to the right to enter into any type of contractual relationship
or otherwise with relationships brought to or developed by the other and/or
together in this transaction without prior written consent by the other unless
authorization is otherwise provided for under a provision in the proposed Stock
Purchase and Share Exchange Agreement. 

15. Indemnifications. Purchaser and
Sellers agree that on or before the date of execution of the Stock Purchase and
Share Exchange Agreement, Sellers will insure, hold harmless and indemnify
Purchaser against any and all claims, liens, judgments and/or any other
obligation against the Company prior to the execution of the Purchase Agreement
and that the Company will be free and clear of any liens, claims and or
encumbrances whatsoever, except those disclosed and accepted by Purchaser.

16. Disclaimer of Liabilities. No party to
this Letter of Intent shall have any liability to any other party for any
liabilities, losses, damages (whether special, incidental or consequential),
costs, or expenses incurred by the party in the event either party decides to
terminate this Letter as provided in paragraph 17. Each party shall be solely
responsible for its own expenses, legal fees and consulting fees related to
their respective obligations of this Letter of Intent, whether or not any of the
transaction contemplated in this Letter of Intent is consummated. 

17. Termination. Each party hereby reaffirms its
intention that this Letter of Intent as a whole or in part, is not intended to
constitute, and shall not constitute, a legal and binding obligation, contract
or agreement between any of the parties, and is not intended to be relied upon
by any party as constituting such. Accordingly, the parties agree that any party
to this Letter of Intent may unilaterally withdraw from negotiation or dealing
at any time for any or no reason at the withdrawing party’s sole discretion by
notifying the other party of the withdrawal in writing. If a Stock Purchase and
Share Exchange Agreement is not executed by the parties to this Letter on or
before the 30th day of June, 2010, then this Letter of Intent shall terminate
and all the terms and conditions set forth herein shall be null and void, unless
an extension of this Letter of Intent is mutually agreed to by both parties in
writing prior to the termination date. 

18. Miscellaneous. This letter shall be governed
by the substantive laws of the State of Nevada without regard to conflict of
laws principles. This letter constitutes the entire understanding and agreement
between the parties hereto and their affiliates with respect to its subject
matter and supersede all prior or contemporaneous agreements, representations,
warranties and understandings of such parties (whether oral or written). No promise, inducement, representation or
agreement, other than as expressly set forth herein, has been made to or by the
parties hereto. This letter may be amended only by written agreement, signed by
the parties to be bound by the amendment. Evidence shall be inadmissible to show
agreement by and between such parties to any term or condition contrary to or in
addition to the terms and conditions contained in this letter. This letter shall
be construed according to its fair meaning and not strictly for or against
either party. 

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19. No Binding Obligation. Except for Section 1
and Section 3 though 20, THIS LETTER OF INTENT DOES NOT CONSTITUTE OR CREATE,
AND SHALL NOT BE DEEMED TO CONSTITUTE OR CREATE, ANY LEGALLY BINDING OR
ENFORCEABLE OBLIGATION ON THE PART OF EITHER PARTY TO THIS LETTER OF INTENT. NO
SUCH OBLIGATION SHALL BE CREATED, EXCEPT BY THE EXECUTION AND DELIVERY OF THE
PURCHASE AGREEMENT CONTAINING SUCH TERMS AND CONDITIONS OF THE PROPOSED
TRANSACTION AS SHALL BE AGREED UPON BY THE PARTIES, AND THE ONLY IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF SUCH PURCHASE AGREEMENT. The Confidentiality
Agreement is hereby ratified and confirmed as a separate agreement between the
parties thereto. 

20. ACKNOWLEDGMENT AND ACCEPTANCE.
If the terms and conditions of this Letter of Intent are agreeable to Mount
Knowledge USA, Inc, please have the appropriate officer and/or director sign a
copy of this Letter of Intent and return a signed copy by facsimile to us at
(248) 671-5080 by no later than 5pm on April 27, 2010, followed by a mailed
original signed copy to Mount Knowledge Holdings, Inc., 39555 Orchard Hill
Place, Novi, Michigan 48375. This Letter of Intent may be executed in one or
more counterparts, each of which when so executed shall be deemed an original,
but all of which taken together shall constitute one and the same document. Upon
acceptance of the provisions of this Letter of Intent by each party, the parties
will in good faith prepare to execute a Stock Purchase and Share Exchange
Agreement on the contemplated transaction described herein on or before the 30th
of June, 2010, subject to the termination provisions set forth in paragraph
17. 

If the foregoing terms and conditions are acceptable to Mount
Knowledge USA, Inc, please so indicate by initialing each page and signing the
enclosed copy of this Letter of Intent and returning it to the attention of the
undersigned.

Sincerely, 

MOUNT KNOWLEDGE HOLDINGS, INC. 

By:   /s/ Daniel A.
Carr                                  

        Daniel A. Carr,

        President and CEO 

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ACCEPTED AND AGREED 

MOUNT KNOWLEDGE USA, INC. 

By:   /s/ Simon
Arnison                                             

        Simon Arnison

        Vice President, Secretary and
Director 

Date: April 26, 2010 

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Exhibit A 

Due Diligence Check List 

MOUNT KNOWLEDGE USA, INC. 

(the “Company”) 

	Document/Information 	 	 	Provided 	 	 	None 	 	 	(Set Forth Reason)
    	 
	 	 	 	 	 	 	 	 	 	 	 
	CORPORATE INFORMATION
      	 	 	  	 	 	  	 	 	  	 
	 	 	 	 	 	 	 	 	 	 	 
	1. 	 	Articles of Incorporation, and any amendments thereto, of the Company.
      	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	2. 	 	Bylaws, as amended, of the Company.
      	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	3. 	 	All shareholders, board of directors and committee minutes of
      the Company during the last three years.
      	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	4. 	 	Schedule of all jurisdictions in
      which the Company is qualified to do business and certificates of such qualification. 	 	 		 	 		 	 		 


7 



  

	 	 	 	 	 	 	 	 	 	 	 	 	 
	5. 	 	Names and addresses of the Company's
      shareholders, officers and directors, together with biographies. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	6. 	 	Description of all classes of stock and
      ownership interests of all shareholders of the Company, including total
      number of issued and outstanding shares. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	7. 	 	All voting trust agreements or other voting
      arrangements relating to any securities (with voting rights) of the
      Company. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	8. 	 	All warrants, option agreements and other
      agreements or instruments creating or granting rights to acquire or
      dispose of the Company's securities, or containing anti-dilution
      provisions or providing for registration rights for the Company's
      securities. 	 	 		 	 		 	 		 


8 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	9. 	 	All documents relating to all underwritings and
      all major acquisitions or dispositions of the Company during last three
      years other than acquisitions or dispositions of the Company of property
      or goods in the ordinary course of business. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	10. 	 	Schedule and description of the location of all
      offices and operations of the Company, including total land and operations
      areas, ownership and rights of use, condition of property, market value
      and space for expansion. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	EMPLOYMENT INFORMATION 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	11. 	 	Schedule of all employees of the Company by
      location and department, job descriptions, salaries, bonuses and other
      compensation. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	12. 	 	Biographies of all key employees of the
      Company. 	 	 		 	 		 	 		 


9 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	13. 	 	Appraisal of current labor relationships,
      description of any disputes with employees and grievance proceedings
      within the past three years. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	14. 	 	A list of all employees of the the Company who
      have received stock or options (including appreciation rights) and the
      number of such securities received. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	15. 	 	All written employment agreements, consulting
      agreements, severance, confidentiality and non-competition agreements, and
      any labor or collective bargaining agreements. Description of any verbal
      agreements, understanding or promises relating to employees. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	16. 	 	All employee benefit plans, stock option plans
      and fringe benefit plans, including group health and life insurance plans,
      pension plans, cash bonus plans, employee stock purchase plans and salary
      plans. 	 	 		 	 		 	 		 


10 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	17. 	 	Company policy manual. 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	LOAN AND FINANCIAL INFORMATION 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	18. 	 	All debt instruments, loan agreements,
      installment purchase agreements, indentures, security instruments or other
      obligations relating to indebtedness for borrowed money or money loaned to
      others, and all guaranties of obligations therefor to which the Company is
      a party, obligor or beneficiary. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	19. 	 	All correspondence with principal lenders for
      the past 18 months. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	20. 	 	Descriptions of any loans to or from officers,
      directors or employees of the Company. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	21. 	 	Files of correspondence with any reports from
      the Company's accountants during the past five years. 	 	 		 	 		 	 		 


11 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	22. 	 	All annual and subsequent interim financial
      statements of the Company and any unconsolidated subsidiaries, whether
      audited or unaudited, within the last five years, and all information
      relating to significant or material changes in accounting methods or
      standards used by the Company or its accountants to prepare such financial
      statements. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	23. 	 	Current balance sheet of the Company 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	24. 	 	All deeds to, and other documents, other than
      leases, representing interests in real property owned by the Company. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	25. 	 	All appraisals, independent or otherwise, made
      within the last three years, as to the value of the Company or any
      property thereof. 	 	 		 	 		 	 		 


12 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	26. 	 	Copies of all tax returns filed by the Company
      within the last five years with the IRS and all state and local tax
      authorities. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	27. 	 	Description of accounting policies, method of
      crediting sales, allowances and returns, bad debts, inventory valuation,
      depreciation methods and rates for different structures and equipment, and
      internal reporting and control procedures. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	28. 	 	Copies of all accounts receivable aging reports
      for the last three years and at the end of the most recent month. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	MATERIAL AGREEMENTS 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	29. 	 	All leases, subleases or options to lease or
      sublease for personal or real property to which the Company is or intends
      to become a party (whether as lessor, lessee, sublessor or sublessee). 	 	 		 	 		 	 		 


13 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	30. 	 	All material contracts, agreements
      arrangements, commitments, understandings or obligations of the Company,
      any current or former Officer, Director or Affiliate not otherwise called
      for herein, including but not limited to: 	 	 		 	 		 	 		 



	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(a) 	 	any agreements relating to the acquisition or
      disposition of assets not in the ordinary course of business; 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(b) 	 	any partnership or joint venture in which the
      Company is involved; 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(c) 	 	agreements with significant customers (a
      significant customer is any customer accounting for 5% or more of the
      Company's gross revenues); 		 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(d) 	 	agreements with significant suppliers (a
      significant supplier is any supplier accounting for 5% or more of the costs of goods
      sold to the Company); 	 	 		 	 		 	 		 


14 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(e) 	 	any management, advisory, investment banking,
      marketing, franchise or agency agreements; and 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(f) 	 	any consulting contracts with engineering firms
      or other consultants. 	 	 		 	 		 	 		 



	 	 	 	 	 	 	 	 	 	 	 	 	 
	31. 	 	A list of all transactions, or copies of all
      agreements, between the Company and its present or former officers,
      directors or other affiliated parties (or members of their immediate
      family - which should include spouses, parents, children, siblings,
      mothers and fathers and all in- laws), including indemnity arrangements.
    	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	32. 	 	Copies of all standard form sales agreements,
    form of general invoices, and warranties given to customers. 	 	 	 	 	 	 	 	 	 	 


15 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	33. 	 	A description of any actual or
      likely defaults in any agreement to which the Company is a party. 	 	 		 	 		 	 		 



	 	 	 	 	 	 	 	 	 	 	 
	GENERAL BUSINESS INFORMATION 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	34. 	 	Schedule and description of all Products which
      generate at least 5% of gross revenue, including markets, sales by product
      for current and past two years, dollar and unit volume by product, trends
      in market shares, relative costs and profit margins by product, and
      breakdown of profits by product line. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	(a) Schedule and description of all significant
      customers who purchase Products described in question #34, Including
      annual volume of products purchased, payment history 	 	 		 	 		 	 		 


16 





	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	(b) Description of distribution systems,
      inventory control systems and sales systems, including names, locations,
      type of arrangements and pricing structure regarding products described in
      question #34. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	35. 	 	Schedule and description of all significant
      customers, including annual volume of products purchased, payment history
      and contact person. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	36. 	 	Description of distribution systems, inventory
      control systems and sales systems, including names, locations, type of
      arrangements and pricing structure regarding independent representatives.
    	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	37. 	 	All budgets, plans, forecasts and other
      financial information (including backlog information) prepared during the
      past 12 months or prior thereto if relating to the Company's future. 	 	 		 	 		 	 		 


17 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	38. 	 	A schedule, with relevant coverage data, of all
      insurance policies maintained by the Company. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	39. 	 	All consultants', engineers' and management
      reports and marketing studies relating to the Company 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	40. 	 	All press clippings and releases concerning the
      Company within the last three years. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	41. 	 	All current price lists, advertising and
      promotional materials, sales literature and other brochures or similar
      information describing the Company or its products. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	42. 	 	All documentation relating to trademarks,
      service marks, trade or brand names, patents and copyrights and
      applications therefor. All license, know-how and technical assistance
      agreements. All material franchises, permits, governmental certifications,
      concessions or other authorizations granted to, owned or used by the
      Company. 	 	 		 	 		 	 		 


18 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	43. 	 	All descriptive brochures and manuals and any
      other documents used with respect to the Company and/or their products or
      the marketing of such products. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	44. 	 	All management reports prepared during the last
      three years. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	45. 	 	All governmental policies and (to the extent
      known) informal or unwritten policies applicable to the business of the
      Company. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	46. 	 	Description of principal competitors by product
      lines. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	47. 	 	Description of all manufacturing systems,
      production schedules, software and hardware utilized, including special
      skills and know-how. 	 	 		 	 		 	 		 


19 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	48. 	 	Schedule of significant suppliers, including
      annual purchases, description of products and reliability of suppliers,
      relationship, payment terms and history, and contact person. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	49. 	 	Description of typical inventories, valuation
      policy, maximum and minimum limits, return goods policy. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	EXISTING AND POTENTIAL LIABILITIES AND
      ENCUMBRANCES 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	50. 	 	A schedule identifying all existing and
      potential environmental problems and liabilities, if any. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	51. 	 	All material liens, claims, mortgages and
      encumbrances on real or personal property of the Company. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	52. 	 	All attorney audit response letters and
      auditor's management letters. 	 	 		 	 		 	 		 


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	53. 	 	All material court filings. 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	54. 	 	All Company material filed with any regulatory
      agencies, including the SEC, IRS (furnish only material filings), EPA,
      FDA, OSHA and any federal or state securities or environmental authorities
      within the last three years. 	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	55. 	 	A list of all litigation or other proceedings
      existing, contemplated or threatened by or against the Company, including
      actions and inquiries by governmental agencies (SEC, IRS, EPA, EEOC, OSHA,
      Labor, etc.), with a brief description of the claims and amounts involved.
    	 	 		 	 		 	 		 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	56. 	 	A list of all contingent or unasserted claims
      or liabilities of or against the Company not described in its most recent
      balance sheet. 	 	 		 	 		 	 		 


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	57. 	 	A list of all proceedings to which officers,
      directors or employees of the Company have been subject to during the last
      five years brought by any foreign, U.S. state or federal governmental or
      other agencies. 	 	 		 	 		 	 		 


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