Docstoc

Merger & Acquisition Term Sheet

Document Sample
Merger & Acquisition Term Sheet Powered By Docstoc
					This Merger and Acquisition (M&A) Term Sheet is a non-binding document which
outlines the understanding between two or more parties regarding a proposed
transaction. This document sets forth general terms and conditions and outlines the
components of the transaction and requires the parties to use reasonable diligence to
commence good faith negotiations in order to execute a definitive purchase and sale
agreement. Although the term sheet is generally intended to be non-binding, the
confidentiality, dispute resolution, exclusivity, expenses, and governing law provisions
are intended to create legally binding obligations. This template term sheet can be
modified to best fit the needs of the drafting parties.
                     Merger and Acquisition Term Sheet

        This Term Sheet (the “Term Sheet”) is intended to describe the understanding between
the Parties to and the general terms and conditions of the proposed acquisition (“Acquisition”) of
XYZ, a __________ organized under the laws of the State of ___________ (“XYZ”), and certain
of its affiliates, by ABC, a ______________ organized under the laws of the State of
______________ (“ABC”) and is subject to the negotiation and execution of a definitive
purchase and sale agreement, a definitive escrow agreement, and any other agreement that may
be necessary to effect the Acquisition (together referred to herein as the “Acquisition
Documents”). This Term Sheet is intended solely as a basis for further discussion and is not
intended to be and does not constitute a legally binding obligation except as provided for in the
“Confidentiality,” “Dispute Resolution,” “Exclusivity,” “Expenses,” and “Governing Law”
provisions herein and below. No other legally binding obligations shall be created, implied, or
inferred until a definitive Purchase and Sale Agreement (“Purchase Agreement”) is executed and
delivered by all Parties. Without limiting the generality of the foregoing, it is the Party intent
that, until such execution and delivery occurs, no agreement shall exist between them and no
obligations shall arise whatsoever based on such things as parol evidence, extended negotiations,
“handshakes,” oral understandings, or courses of conduct (including reliance and changes of
position), except as provided for in the “Confidentiality,” “Dispute Resolution,” “Exclusivity,”
“Expenses,” and “Governing Law” provisions herein and below.

1.       Party and Parties

        The Parties to this Term Sheet (collectively “Parties” and individually “Party”) and,
therefore, to this Acquisition, are ABC and, collectively, the individual shareholders of XYZ
(“Existing       Shareholders”),      with      their      respective      shareholding     of
________________________________________. The obligations of the Existing Shareholders
herein and in the Acquisition Documents shall be joint and several.

2.       Acquisition

         (a)       Purchase of Stock

        At Closing (“Closing”), subject to the satisfaction of all conditions precedent contained in
the Purchase Agreement, ABC shall purchase from the Existing Shareholders and the Existing
Shareholders shall sell to ABC, all of the outstanding ownership interests of XYZ, free and clear
of any liens, charges, restrictions, or encumbrances thereon (the “Existing Shareholders Shares”).
ABC may assign some or all of its rights hereunder, prior to Closing, to one or more of its
subsidiaries. ABC may, at its election, modify the Acquisition so as to create a Merger
(“Merger”) by the purchase of the “Shares” by ABC or one of its subsidiaries.

         (b)       Purchase of Assets




© 2011 by Docstoc®, Inc. registered document proprietary, copy not                      2
       At Closing, and subject to the satisfaction of all conditions precedent contained in the
Purchase Agreement, ABC shall purchase from the Existing Shareholders and the Existing
Shareholders shall sell to the ABC, all other Assets owned by the Existing Shareholders that are
used in, related to, or necessary for the business that is conducted by XYZ, including associated
trademarks, trade names, brand names (such as _________________________), goodwill,
customer lists, contracts, warranties, leases, rights, arrangements, and other assets, free and clear
of any liens, charges, restrictions, or encumbrances thereon. “Assets” is more particularly
described by the list provided in Schedule “1” attached hereto and incorporated herein by
reference.

3.       Purchase Price

        The Purchase Price ( “Purchase Price”) to be paid by ABC to the Existing Shareholders
(pro rata based on each such Shareholder’s interest in XYZ as of Closing) shall be _______
dollars ($___).       This Purchase Price shall be paid in the following manner:
____________________________________________________________ (Mention how the
Purch
				
DOCUMENT INFO
Description: This Merger and Acquisition (M&A) Term Sheet is a non-binding document which outlines the understanding between two or more parties regarding a proposed transaction. This document sets forth general terms and conditions and outlines the components of the transaction and requires the parties to use reasonable diligence to commence good faith negotiations in order to execute a definitive purchase and sale agreement. Although the term sheet is generally intended to be non-binding, the confidentiality, dispute resolution, exclusivity, expenses, and governing law provisions are intended to create legally binding obligations. This template term sheet can be modified to best fit the needs of the drafting parties.
This document is also part of a package Raising Capital Toolkit 9 Documents Included