Term Sheet



In the context of Venture Capital / Angel investment process, term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made. A term sheet serves as a blueprint to develop more detailed legal agreements. Once the parties involved reach a deal on the terms and conditions laid out in the term sheet, a binding contract that conforms to the term sheet details is then drawn up.

Term Sheet Template

PREFACE: The following guidelines set forth the proposed terms and conditions for the herein contained Term Sheet for / VENTURE CAPITAL FIRM /.

The proposed Term Sheet is established for the sole purpose of discussion and negotiations, to describe the general terms and conditions only, and as such, it is not made with the intent of imposing any legal obligation to any party in connection with this instrument.

1. PARTIES TO PURCHASE OF INTEREST

/ ANGEL OR VENTURE CAPITAL FIRM /, who shall be known hereinafter as the "Purchaser," herein proposes and in consideration the acquisition from YOUR COMPANY NAME, which hereinafter shall be known as the "Company," the following properties and/or assets:

/ TRANSACTION NAME, 

PROPERTIES OR ASSETS LISTED /

Aforementioned properties and assets intended for purchase shall hereinafter be known as the "Assigned Interests."

2. PROPOSED PURCHASE PRICE

For the sale and transfer of the aforementioned Assigned Interests to the Purchaser, the purchase price is $5,000,000 and the terms of payment are as follows:

/ PAYMENT TERMS /


3. STATEMENTS AND ASSURANCES

3.1 Both the "Purchaser" and the "Company" hereby agree to comply with any and all applicable laws with regards to the performance of the aforementioned transaction;

3.2 That the herein titled "Company" certifies and attests that it maintains a clear title and ownership over the "Assigned Interests;"

3.3 Furthermore, the "Company" guarantees and warrants that the "Assigned Interests" are free and clear from obligation and defects;

3.4 That there are no pending litigation or proceedings commenced against the "Company" nor the "Purchaser" that would challenge or contest, or which may prevent, delay, interfere with or make illegal any of the herein contained Contemplated Transactions;

3.5 Non-Disclosure: Under no circumstances, shall the "Purchaser" nor the "Company" make any public disclosure regarding the pending Transaction prior to or after the closing. Both parties, the "Company" and the "Purchaser," are hereby in agreement that any such decision regarding the disclosure of the Contemplated Transaction, made at or after the time of Closing, shall be made mutually; providing that there is no provision that would prevent the "Company" from their fulfillment of any legal disclosure obligations.

3.6 Non-Compete: The "Company" herein agrees that is will neither directly nor indirectly, as of this date and until the date of Closing, either through the use of a broker, agent or otherwise, solicit or accept any offer or engage in any other negotiation, nor enter into or consider any other contract with regard to the anticipated Assigned Interests or with respect to a Replacement Transaction. Therefore, the "Company" herein declares that it shall promptly refuse any unsolicited offer with regards to the Assigned Interests.

3.7 That all Transaction Documents will contain representations and warranties that are customary for transactions of this size and nature.

4. CONDITIONS AND DATE OF CLOSING

The obligations of the "Company" to complete all Contemplated Transactions herein shall be subject, in conjunctions with other items, to the satisfactions of the following conditions:

4.1 Satisfactory completion of all legal, accounting, tax, financial, commercial and environmental due diligence, at the "Company's" sole discretion;

4.2 Negotiation execution and delivery of satisfactory and mutually acceptable Transaction Documents;

4.3 Receipt of all necessary governmental, Board of Directors, investment committee and third-party approvals;

4.4 True and correct representations and warranties as of the "Closing Date;"

4.5 Finally, that any and all essential steps to achieve a closing (the "Closing") shall be completed by / CLOSING DATE /, the actual "Closing Date." The aforementioned "Closing Date" may be subject to a mutually agreed upon extension or postponement by both parties. This herein contained Term Sheet shall expire at midnight on / TERM SHEET EXPIRE DATE /.

5. DELIVERABLES AT CLOSING

Below is a list of deliverables that are due at closing:

/ DOCUMENTS REQUIRED TO BE PRESENTED BY BOTH PARTIES /


6. GOVERNING LAW

Any and all Transaction Documents, as well as this Term Sheet, shall be governed by the current applicable laws of the State of New York.

7. BOOKKEEPING/ACCOUNTING MATTERS

It shall be the responsibility of the "Company's" Accountant to ensure the preparation of any and all financial statement made in accordance with the Generally Accepted Accounting Principles (GAAP). In addition, prior to the "Closing," an audit of any and all financial statements shall be completed.

8. CONFIDENTIALITY

It is therefore agreed, that the terms and conditions contained within this Term Sheet shall be held in the strictest confidence by both parties.

/ NAMES AND SIGNATURES /



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