A Term Sheet Share Purchase Agreement is a crucial preliminary document used in Canadian merger and acquisition transactions to establish the fundamental terms of a proposed share purchase. This document is typically prepared after initial discussions between parties but before detailed due diligence and final documentation. It serves as a roadmap for negotiating the definitive agreement, outlining key commercial terms such as purchase price, payment structure, conditions precedent, and timing. While generally non-binding (except for specific provisions like confidentiality and exclusivity), it helps parties align their expectations and forms the basis for more detailed legal documentation. The document must comply with Canadian corporate and securities laws, including provincial securities regulations and federal legislation such as the Canada Business Corporations Act.
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1. Parties: Identification of buyer, seller, and target company
2. Background: Brief context of the proposed transaction
3. Definitions: Key terms used throughout the term sheet
4. Transaction Structure: Overview of the proposed share purchase transaction
5. Purchase Price: Proposed consideration and payment terms
6. Timing: Key dates including signing, due diligence period, and closing
7. Key Conditions: Critical conditions precedent to closing
8. Due Diligence: Scope and process for due diligence review
9. Exclusivity: Terms of exclusive negotiation period
10. Confidentiality: Basic confidentiality obligations
11. Costs: Allocation of transaction costs
12. Binding Nature: Clear statement of which provisions are binding/non-binding
13. Governing Law: Applicable law and jurisdiction
1. Purchase Price Adjustments: Include when purchase price will be subject to working capital or other adjustments
2. Earnout Provisions: Include when part of purchase price is contingent on future performance
3. Management Arrangements: Include when key management will have ongoing roles/agreements
4. Regulatory Approvals: Include when transaction requires specific regulatory clearances
5. Employee Matters: Include when specific employee arrangements are material to the transaction
6. Real Estate Matters: Include when real estate assets are material to the transaction
7. Intellectual Property: Include when IP assets are material to the transaction
8. Break Fee: Include when parties agree to termination fees
9. Financing Conditions: Include when purchase is subject to financing arrangements
1. Cap Table: Current and post-closing capitalization of the target company
2. Purchase Price Calculation: Overview of purchase price components and calculations
3. Key Assets: List of material assets included in the transaction
4. Required Consents: List of third-party consents needed for closing
5. Timeline: Detailed transaction timeline with key milestones
6. Due Diligence Checklist: High-level list of due diligence requirements
Relevant legal definitions
Agreement
Business Day
Buyer
Closing
Closing Date
Confidential Information
Consideration
Data Room
Definitive Agreement
Due Diligence Period
Effective Date
Encumbrance
Exclusivity Period
Long Stop Date
Material Adverse Change
Purchase Price
Purchase Price Adjustment
Related Parties
Representatives
Seller
Shares
Target Company
Target Group
Transaction
Working Capital
Working Capital Target
Permitted Encumbrances
Completion
Conditions Precedent
Earnout Period
Escrow Amount
Governmental Authority
Material Contracts
Signing Date
Third Party Consents
Business Day
Buyer
Closing
Closing Date
Confidential Information
Consideration
Data Room
Definitive Agreement
Due Diligence Period
Effective Date
Encumbrance
Exclusivity Period
Long Stop Date
Material Adverse Change
Purchase Price
Purchase Price Adjustment
Related Parties
Representatives
Seller
Shares
Target Company
Target Group
Transaction
Working Capital
Working Capital Target
Permitted Encumbrances
Completion
Conditions Precedent
Earnout Period
Escrow Amount
Governmental Authority
Material Contracts
Signing Date
Third Party Consents
Clauses
Share Purchase
Purchase Price
Payment Terms
Conditions Precedent
Due Diligence
Representations and Warranties
Confidentiality
Exclusivity
Regulatory Compliance
Governing Law
Dispute Resolution
Transaction Timeline
Break Fee
Costs and Expenses
Non-Binding Nature
Binding Provisions
Access and Information
Employee Matters
Management Arrangements
Third Party Consents
Purchase Price Adjustments
Tax Matters
Closing Mechanics
Termination Rights
Notices
Assignment
Purchase Price
Payment Terms
Conditions Precedent
Due Diligence
Representations and Warranties
Confidentiality
Exclusivity
Regulatory Compliance
Governing Law
Dispute Resolution
Transaction Timeline
Break Fee
Costs and Expenses
Non-Binding Nature
Binding Provisions
Access and Information
Employee Matters
Management Arrangements
Third Party Consents
Purchase Price Adjustments
Tax Matters
Closing Mechanics
Termination Rights
Notices
Assignment
Relevant Industries
Manufacturing
Technology
Retail
Healthcare
Financial Services
Real Estate
Professional Services
Energy
Mining
Transportation
Telecommunications
Agriculture
Construction
Entertainment
Education
Relevant Teams
Legal
Finance
Corporate Development
Mergers & Acquisitions
Business Development
Executive Leadership
Strategy
Tax
Compliance
Due Diligence
Relevant Roles
Chief Executive Officer
Chief Financial Officer
Corporate Development Director
General Counsel
Legal Counsel
M&A Director
Business Development Manager
Investment Banker
Corporate Secretary
Finance Director
Transaction Manager
Due Diligence Manager
Chief Operating Officer
Head of Strategy
Board Member
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