https://arstechnica.com/tech-policy/2022/05/twitter-board-te...
https://www.bloomberg.com/opinion/articles/2022-05-17/elon-m...
Section 5.11 (note that "Parent" / "Acquisition Sub" refers to Musk and "Company" refers to Twitter):
> Each of Parent and Acquisition Sub has conducted, to its satisfaction, its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries. In making its determination to proceed with the transactions contemplated by this Agreement, including the Merger, each of Parent and Acquisition Sub has relied solely on the results of its own independent review and analysis and the covenants, representations and warranties of the Company contained in this Agreement. Parent and Acquisition Sub hereby acknowledge that, notwithstanding anything contained in this Agreement to the contrary, (i) neither the Company nor any of its Subsidiaries, nor any other Person, makes or has made or is making any express or implied representation or warranty with respect to the Company or any of its Subsidiaries or their respective business or operations, in each case, other than those expressly given solely by the Company in Article IV; and (ii) neither Parent nor Acquisition Sub is relying on any express or implied representation or warranty, or the accuracy or the completeness of the representations and warranties set forth in Article IV, with respect to the Company or any of its Subsidiaries or their respective business or operations, in each case, other than those expressly given solely by the Company in Article IV.
> They'll laugh at you and hung up.
Sure, but we're not the richest person on the planet, Elon Musk
It's very much related to the bid. If you materially mis-represent your company then it's a valid reason to scrap the deal.
> As for that bid, the time for due diligence is before, not after, one signs the merger agreement.
That's not how it works.
Try calling Twitter: "I'm doing due diligence on you guys, could you open your books to me"?
They'll laugh at you and hung up.
The agreements is a pre-requisite of doing what "due diligence" means in this context.
"Due diligence" specifically involves looking at things that you're typically not allowed to looked at.
Things like auditing financials of the company, doing an audit of the source code, proprietary technology etc.
It requires the company being acquired to share a lot of proprietary information.
The agreement, which includes $1 billion breakup clause, is necessary to filter out people who are not serious.