Glossary

A · B · C · D · E · F · G · H · I · K · L · M · N · O · P · Q · R · S · T · V · W

A

Alienation

The clauses in a lease that control who may hold or deal with it, for example by assigning or subletting. On a share sale the company stays the tenant, so the landlord's consent is needed only if the lease says so. Neither Sunrise lease required it. Report §11.1 · Chapter 11

Assignment

Transferring a contract, or the rights under it, to someone else. Many contracts forbid it or need consent. On a share deal the same company stays the party, so a ban on assignment generally does not apply, but on an asset deal it decides everything. Chapter 7

Authorisation

A regulator's permission to carry on an activity the law otherwise forbids. Solaris's authorisation from the Central Bank of Ireland lets it hold and settle crypto-assets for customers, so the licence is what Atlas is paying for. The review checks that it covers everything the group does. Report §5.3 · Chapter 8

B

Basket

A limit on warranty claims in the SPA: the claims together must reach a set total before any can be paid. With disclosure and the cap, it weakens any claim for a known problem. So a known problem is covered by a specific indemnity, which usually sits outside the basket. Chapter 8

Boilerplate

The standard clauses readers tend to skip, usually at the back of a contract: termination, assignment, notices and governing law. The dangerous clauses often sit among them. Novapay's right to end its contract on a change of control sat eighteen clauses deep. Chapter 5

Bring-down

Repeating a warranty at completion, so that the seller stands behind it again on the day the money moves. The Sunrise report asked for the no-termination warranty to be repeated, but the signed SPA repeats only the title and capacity warranties. Chapter 12

C

Caveat emptor

Latin for “let the buyer beware”. A seller of shares in a private company generally has no duty to tell the buyer what is wrong with it. That is why the buyer investigates before signing and takes promises in the SPA. Chapter 1

Chain of title

The record of how the shares reached the seller: every transfer, new issue and buy-back since the first shareholders. Each link needs its papers, such as a signed stock transfer form and a board minute. A missing link means the seller may not own what it is selling. Report §3.1 · Chapter 6

Change of control

A clause giving the other party rights, usually to end the contract, when a new owner takes control of the company. A share sale triggers it, even though no contract moves. Novapay's right to end its contract on 60 days' notice was such a clause. Report §4.1 · Chapter 5 · Chapter 7

Change-of-control bonuses

Cash promised to staff if the company changes owner. The company pays it, so the cost falls on the buyer unless the deal provides for it. Sunrise found €350,000 of these bonuses and allowed for them in the price, as permitted leakage. Report §6.2 · Chapter 9

Chargeback

A customer's demand for money over a refused or disputed transaction. The Kestrel Markets claim of €80,000 was one. It was below the materiality line, but the report covered it because the same refusal procedure could fail at a much larger scale. Report §9.1 · Chapter 11

Clean team

A small group, often outside advisers only, allowed to see a data room's most sensitive papers, such as customer prices. It reports conclusions to the buyer, not the papers themselves. A data room uses one when buyer and target compete, because competition law limits what rivals may share before completion. Chapter 4

Completion deliverables

The items the seller must hand over at completion so that title passes and can be registered, such as signed stock transfer forms and the share certificates. Findings often land here. On Sunrise, the transfer of the nominee share in the Polish subsidiary became one. Report §3.3 · Chapter 6

Concentration

The share of revenue that depends on a few customers. Novapay alone brought in about 31% of Solaris's revenue, and the top five about 62%. Concentration breaks no rule, but it makes every termination right in those contracts weigh more, so the review reads them harder. Report §4.2 · Chapter 7

Condition (condition precedent)

Something that must happen before completion can take place, so the deal signs and then waits. On Sunrise the condition was the CBI's approval of Atlas as the new owner, in clause 5 of the SPA. CONDITION is also the report's rating for such a step. Report §5.2 · Chapter 8

Conduct covenants

The seller's promises in the SPA about running the business between signing and completion. They keep the business in the ordinary course, so the buyer receives what it priced. On Sunrise they also stopped the group provoking Novapay. Chapter 7

Conduct of claims

Terms in the SPA that decide who runs the defence of a claim the seller will pay for, such as a tax enquiry. The seller wants to steer it. The buyer must keep dealing with the same tax authority for years, so it needs safeguards. Chapter 11

Confidentiality agreement (NDA)

The agreement the buyer signs before it sees any confidential information. It limits how the information may be used and who may see it. It does not oblige the seller to disclose anything, or promise that what it discloses is true. Chapter 1 · Chapter 2

Confirmatory assignment

A short deed in which someone confirms, and where needed transfers, the copyright in work done earlier. It cures a missing assignment. Sunrise asked for one, before signing, from a 2022 contractor whose code is still in use. Report §7.2 · Chapter 10

Controller and processor

The two roles in data protection law. The controller decides why and how personal data is used, and the processor handles it on the controller's behalf, under a written contract. Solaris was the controller, and its analytics provider Parsec the processor. Report §8.1 · Chapter 10

Corporate finance adviser

The firm the seller hires to run the sale. It decides who enters the data room and when each Q&A round opens and closes. On Sunrise it was Harborne & Co. Chapter 2

Court and insolvency searches

Checks of public court and insolvency registers against each group company. They test the seller's confirmations, and they show whether an insolvency could later undo the sale. They are run late, because a search shows the registers only as they were on the day. Report §9.2 · Chapter 6 · Chapter 11

Customer due diligence

The checks a regulated firm must run on who its customers and their owners are. It is part of the anti-money-laundering system, and a different thing from a buyer's due diligence on a deal. Chapter 8

Cut-off date

The date the review stops. The report speaks as at that date, and documents uploaded later are not reviewed. On Sunrise it was 20 June 2026, and anything after it is handled through the SPA. Report §2.3 · Chapter 3 · Chapter 4

D

Data processing agreement (DPA)

The written contract Article 28 of the GDPR requires before a processor handles personal data for a controller. It must say, for example, that the processor acts only on instructions. Solaris's analytics provider worked without one for over a year, until it was signed during the review. Report §8.1 · Chapter 10

Data room (virtual data room, VDR)

A secure website where the seller puts the documents for a deal. The seller's side decides who sees what, and the site logs every upload and view with its date. Sunrise's room held 1,247 documents in twelve folders. Report Appendix A · Chapter 2 · Chapter 4

Data room index

The numbered tree of folders, subfolders and documents in a data room. The reference 7.4.1 means folder 7, subfolder 4, document 1, and that number names the document for the rest of the deal. Laid against the agreed scope, the index also shows what the seller has not provided. Chapter 4

De minimis

A floor in the SPA: a single warranty claim below it cannot be brought at all. Together with the basket and the overall cap, it limits what a buyer can recover under the warranties. That is one reason a known problem needs a specific indemnity instead. Chapter 8

Disclosure

The seller's formal statement of exceptions to its warranties. A matter fairly disclosed cannot found a warranty claim. So when the seller discloses a problem the review has found, the buyer needs another protection, such as a price change or a specific indemnity. Chapter 1 · Chapter 8

Disclosure letter

The seller's letter, given at signing, listing the facts the buyer cannot later claim for under the warranties. Sellers ask for the whole data room to count as disclosed, while buyers want each fact disclosed against the warranty it affects. The diligence team reads the draft against its issue log. Chapter 4 · Chapter 12

Due diligence (DD)

The buyer's investigation of a company before it agrees to buy it. Its lawyers read the documents, ask the seller questions and search public registers. What they find can change the price, the contract or the decision to buy. Chapter 1

Dynamic watermark

The viewer's name and the time, printed across every page a data room shows. A leaked page then shows who leaked it. Chapter 4

E

Encumbrance

Any right a third party holds over an asset, such as a charge, an option or a trust. Title diligence looks for encumbrances over the shares, and the SPA's title warranty says the shares are free from them. Chapter 6

Engagement letter

The contract between a client and its law firm for one piece of work. For a review it fixes the scope, the report's format, materiality, the firm's liability cap and who may rely on the report. Sunrise's capped the firm's liability at €10 million. Report §2.4 · Chapter 2

EU trade mark (EUTM)

A single registration protecting a brand across the whole European Union. The “Solaris” and “Helia” marks are EU trade marks in the Irish Target's name, while the Helia platform belongs to the Polish subsidiary. That split is why the review maps which company owns each asset. Report §7.3 · Chapter 10

Evergreen

A contract that renews automatically unless someone gives notice in time. The review notes the notice window so that the buyer can put it in the diary. Chapter 7

Executive summary

The first section of a diligence report, and the one most readers read closely. It gives an overall view, ranks the findings with their ratings and responses, and says what the team did not find. Write it last. Report §1 · Chapter 12

F

Finding

A fact the review turns up that matters to the deal. The buyer can price it, fix it, cover it in the SPA or accept it, and if none of those works, walk away. A finding that is reported and then goes nowhere is the one wrong answer. Chapter 1

First pass / second pass

The two readings of a data room. The first pass reads every document in scope once, at the depth the reading plan sets. The second reads the critical folders again and re-sorts the late uploads, which is how Sunrise found the CBI letter at 7.4.1. Chapter 4 · Chapter 5

Four-eyes review

A second reader reads the critical folders independently, without the first reader's notes, and then the two compare. It catches what a single reader missed. Chapter 5

Fundamental warranties

The seller's promises about title and capacity: it owns the shares, free from encumbrances, and has power to sell them. If they fail, the buyer has bought nothing. So they usually sit outside the cap, and they are repeated at completion. Chapter 6

G

Gap analysis

Laying the request list against the data room's index and sorting each line: provided, incomplete or not provided. A document that never arrives can itself be a finding, as two Sunrise findings were. Chapter 5

H

Heads of terms

A short, mostly non-binding document in which the parties record the intended price and main terms before the full contract is drafted. Sunrise's set a price of €42 million. Chapter 1

I

Indemnity

A promise to pay for a named problem, euro for euro, if it ever costs the buyer money. The buyer need not prove that any statement was untrue. The entry for specific indemnity gives the Sunrise example. Chapter 1

Intellectual property

Rights in creations, such as copyright in software, trade marks and rights in data. Copyright in an employee's work belongs to the employer, but a contractor keeps it unless he assigns it. The IP review asks whether the group owns its code, in the right company. Report §7 · Chapter 10

Issue log

The review team's one shared table of documents read and findings made. Each row gives the document reference, the fact, why it matters, a rating, the response and the status. The report is written from the log. Chapter 4 · Chapter 5

K

Key people

The people whose departure would damage the value being bought. The review reads their actual contracts for notice periods and restrictive covenants. On Sunrise the CTO and the MLRO were each on one month's notice, so the report recommended retention packages from Atlas. Report §6.1 · Chapter 9

L

Legal professional privilege

The protection that means a client cannot be forced to hand over its lawyers' advice, for example in a later court case. It lasts only while the advice stays confidential, which is why a diligence report is shared so narrowly. Chapter 2

Liability cap

The most that can be recovered if something goes wrong. Contract review checks caps both ways: in customer terms they protect the target, and in supplier terms they limit what it recovers. The engagement letter caps the law firm's liability for its report, at €10 million on Sunrise. Chapter 2 · Chapter 7

Local counsel

Law firms in other countries, instructed for matters governed by their own law, because an English firm does not advise on foreign law. On Sunrise, Kildare & Nolan covered Irish law and Wysocki Legal covered Polish law, working to the same scope, threshold and timetable as the main review. Chapter 2 · Chapter 3

Locked box

A way of fixing the price from accounts at a past date, the locked box date, which was 31 December 2025 on Sunrise. No value may leave the target after that date without the buyer's agreement. Tax from before it is the seller's. Chapter 9 · Chapter 11

Long stop date

The date by which the conditions must be met, or either party may walk away. Sunrise signed with a long stop of 31 March 2027, leaving a margin around the regulator's timetable. Chapter 8

M

Material contract

A contract whose terms, breach or loss could affect the price, the SPA or the deal itself. Value decides how much reading time it gets, but a cheap contract can still be material if the business needs it. The review answers eight standard questions for each one. Report §4 · Chapter 7

Materiality

The money line below which a review does not report, set by the partner and the client. On Sunrise it was €250,000. A smaller matter is still reported if it shows a pattern, affects the target's standing with its regulator or matters to the buyer's plans. Report §2.2 · Chapter 1 · Chapter 3

MLRO (money laundering reporting officer)

The senior person who runs a regulated firm's anti-money-laundering system. On Sunrise the MLRO, Aoife Brennan, led the remediation the CBI was watching, and she could leave on one month's notice. Chapter 8 · Chapter 9

Most-favoured-customer

A promise to a customer that nobody else will get a better price. Made by a small company, it can limit how the buyer's whole group sets prices after completion. So contract review looks for it in every material contract, along with exclusivity and non-compete promises. Chapter 7

N

Nominee

Someone registered as the owner of an asset on behalf of someone else, usually under a declaration of trust. One share in Solaris's Polish subsidiary is held by a former director as nominee for Solaris. Its transfer became a completion deliverable. Report §3.3 · Chapter 6

Notice period

How much notice an employee must give before leaving. It also limits garden leave, which cannot outlast it. On Sunrise two key people were on one month's notice, which was a finding in itself. Report §6.1 · Chapter 9

Novation

Replacing a contract with a new three-way contract, so that obligations, not just rights, pass to a new party. It needs the other party's consent, which is why it matters mostly on an asset deal. Chapter 7

O

Open-source software

Code anyone may use under a public licence. Most licences ask for little more than credit, but copyleft licences can require a product built with the code to be shared on the same terms. On Sunrise copyleft code appeared only in internal build tools, which never ship. Report §7.3 · Chapter 10

P

Passporting

Using a licence from one EU country to serve customers in others, after notifying the home regulator. The review checks that the notifications cover every country where the customers are. Report §5.3 · Chapter 8

Penetration test

A test in which hired specialists try to break into a company's systems. The review reads the latest reports and checks that serious problems were fixed. Solaris had none left unfixed. Chapter 10

Permitted leakage

On a locked box deal, value the buyer agrees in advance may leave the target after the locked box date. The SPA lists it in a schedule. Sunrise listed the €350,000 of change-of-control bonuses there. Report §6.2 · Chapter 9

Personal data

Information about an identifiable person, such as a customer or an employee. The data protection review asks whether the group uses and shares it as the law requires. Report §8 · Chapter 10

Pre-emption right

A shareholder's right to be offered shares first, before they are sold to an outsider. A company's articles set it out, often with a clause letting the board refuse to register a transfer. Waivers from everyone entitled to the right go into the SPA's completion obligations. Chapter 6

Q

Q&A

The written channel for the buyer's questions and the seller's answers, run through the data room. Sunrise had 142 questions in three rounds. Answers guide the review, but documents check them: twice on Sunrise, reading caught what an answer had missed. Report Appendix B · Chapter 2 · Chapter 4

Qualifying holding

A stake in a licensed firm of 10% or more, or one that gives significant influence. The buyer needs the regulator's approval before acquiring it. The CBI's assessment of Atlas was Sunrise's condition to completion. Report §5.2 · Chapter 8

R

Red-flag report

A diligence report that covers only findings that could affect the price, need protection or action, or delay the deal. It says nothing about what is fine, so its silence reads as “checked”. It is the usual choice in private deals, and Sunrise used one. Report §1.1 · Chapter 1 · Chapter 3

Register of members

A company's own legal record of who holds its shares. It is the starting evidence of ownership, but it shows no trusts and no unregistered claims. The SPA's title warranties cover those. Report §3.1 · Chapter 6

Regulatory perimeter

The line the law draws around activities that need a licence. A perimeter review asks what each group company actually does, and whether any of it needs a licence the company does not hold, in any country where it is done. Report §5.3 · Chapter 8

Related-party arrangements

Contracts between the target and the seller's group. They change at completion, when the seller's group becomes a stranger. On Sunrise, Meridian's shared services ended at completion, so the report recommended a transitional services agreement or a migration plan. Report §11.3 · Chapter 11

Reliance letter

A short agreement extending a law firm's duty of care on its report to named third parties. The banks lending Atlas most of the price relied on the Sunrise report under one, instead of running their own review. Report §2.4 · Chapter 2

Request list

The buyer's list of the documents it wants, workstream by workstream, written before the data room opens. It tells the seller what to collect, and it becomes the measure for spotting what never arrives. Chapter 5

Restrictive covenants

Promises that limit what a person may do after leaving, such as a non-compete or a promise not to approach customers or colleagues. Sunrise's two key people had only a six-month ban on poaching colleagues. Chapter 9

Risk rating

The label each finding carries. The Sunrise report uses HIGH, MEDIUM, LOW and CONDITION, defined in its Appendix C. Each rating stands for a response, so it changes only with the facts. Report Appendix C · Chapter 12

Run-off cover

Insurance that keeps an expiring policy answering claims about past events. A D&O policy pays only claims made while it is in force, so the Sunrise report recommended six years of run-off cover for the outgoing directors. Report §11.2 · Chapter 11

S

Sampling

Reading the biggest contracts in full and a random draw of the rest, then saying so in the report. The random part tests whether the unread contracts really are standard. If a sampled contract breaks the pattern, the team reads more. Chapter 5

Scope

The written list of what a review covers: the legal areas, the countries, the materiality line and the shape of the report. It is agreed with the client before the reading starts. Anything left out must be stated in the report. Report §2.1 · Chapter 3

Scope creep

The quiet growth of a review without more time or fees. Each request is handled in the open: do it and agree the extra fees, decline it and record the exclusion, or trade it for something else. Chapter 3

Share certificate / stock transfer form

The stock transfer form moves the shares, and the share certificate shows what the register said on the day it was issued. The register of members, not the certificate, is the starting evidence of who owns the shares. Chapter 6

Share deal

Buying a company by buying its shares. Everything inside the company comes with it, problems included, and its contracts stay where they are, although change-of-control clauses may fire. The other structure is an asset deal. Chapter 7

Specific indemnity

The seller's promise to pay, euro for euro, for losses from one defined matter, usually outside disclosure and the warranty limits. It suits a known problem nobody can measure. Sunrise's covers the Legacy AML Matter, up to €8 million for four years. Report §5.1 · Chapter 8

T

Tax covenant

The seller's promise to pay the buyer an amount equal to the target's tax for the period before the locked box date. Sunrise's Polish VAT enquiry, an exposure of €120,000 to €310,000, falls under it, so no separate indemnity was needed. Report §10.1 · Chapter 11

Termination for convenience

A right to end a contract on notice without giving a reason. It makes a long contract as short as its notice period. Solaris's hosting provider could leave on 30 days' notice, a MEDIUM finding. Report §4.3 · Chapter 7

Threatened claim

A claim someone has asserted but not yet issued at court, often in a letter before action. Such claims sit in inboxes, not public registers, so the review relies on the seller's disclosure and management's confirmations. Report §9 · Chapter 11

Transaction monitoring

The automatic screening that flags unusual transfers for a person to review. At Solaris it failed for nine months in 2024, leaving about 3,400 alerts unreviewed. That failure is the subject of the CBI letter at 7.4.1. Report §5.1 · Chapter 8

Transfer impact assessment

The exporter's written check that another country's laws do not undermine the standard contractual clauses used to send personal data there. Solaris completed one when it signed the contract with its US analytics provider. Chapter 10

Transfer pricing

The prices group companies charge each other, which tax law expects to be fair and documented. Free use of Helia across the group raises the point, and the same missing paperwork weakened the Polish company's VAT file. Report §10.2 · Chapter 10 · Chapter 11

Transitional services agreement (TSA)

A short agreement under which the seller keeps providing services after completion, while the buyer moves them elsewhere. The Sunrise report recommended one of up to six months for treasury support and back-office IT, or a migration plan instead. Report §11.3 · Chapter 11

Triage

A quick sort of every document: what is it, which workstream owns it, and how much attention does it deserve? The result is a reading plan. Every late upload goes back through triage, however finished its folder seems. Chapter 4 · Chapter 5

TUPE

The UK regulations that move employees automatically to the buyer of a business. They apply on an asset deal, not on a share deal, where the company stays the employer. Sunrise was a share deal, so TUPE did not apply. Chapter 9

V

Vendor due diligence

A diligence report the seller pays for on its own company, often to run a sale with several bidders. Bidders check only what it leaves open, and the winner usually gets a reliance letter from its authors. Chapter 1

W

Waiver

A party's binding promise not to use a right it holds. The Sunrise report recommended that Atlas and Meridian approach Novapay together for a waiver of its change-of-control right. In practice, written comfort short of a waiver is often all that is on offer. Chapter 7

Warranties

The seller's statements in the SPA that facts about the company are true. The buyer can claim if one is false, but only after the deal, within caps and time limits, and not for matters fairly disclosed. So warranties never replace looking. Chapter 1 · Chapter 12

Workstream

One lane of the review by subject, such as tax or employment, with its own reviewer, data room folder and section of the report. Sunrise had nine. What the target is decides which one leads. Chapter 2 · Chapter 3