Term Sheet Share Purchase Agreement for the United Kingdom

Term Sheet Share Purchase Agreement Template for England and Wales

A Term Sheet Share Purchase Agreement is a preliminary document under English and Welsh law that outlines the key terms and conditions for a proposed share acquisition. It serves as a framework for negotiation and typically includes details about purchase price, payment terms, conditions precedent, and key warranties, while not being legally binding except for specific provisions such as confidentiality and exclusivity.

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What is a Term Sheet Share Purchase Agreement?

The Term Sheet Share Purchase Agreement is a crucial preliminary document used in corporate acquisitions governed by English and Welsh law. It sets out the principal terms of a proposed share purchase transaction before parties proceed to detailed documentation and due diligence. This document typically precedes the definitive Share Purchase Agreement and helps parties align on key commercial terms early in the transaction process. While generally non-binding, it often includes certain binding provisions such as confidentiality and exclusivity obligations.

What sections should be included in a Term Sheet Share Purchase Agreement?

1. Parties: Identification of buyer, seller, and target company

2. Background: Context of the transaction and purpose of the term sheet

3. Definitions: Key terms used throughout the document

4. Transaction Structure: Overview of the proposed share purchase

5. Purchase Price: Consideration and payment terms

6. Conditions Precedent: Key conditions that must be met before completion

7. Timing: Expected timeline for completion

What sections are optional to include in a Term Sheet Share Purchase Agreement?

1. Exclusivity: Provisions for exclusive negotiations between the parties, typically used in competitive sale processes

2. Break Fee: Provisions for compensation if the deal fails to complete, commonly included in high-value transactions

3. Management Arrangements: Details of post-completion management structure and arrangements, used when management changes are contemplated

What schedules should be included in a Term Sheet Share Purchase Agreement?

1. Target Company Information: Key details about the target company including corporate information and financial overview

2. Warranties Overview: Summary of key warranties to be included in final Share Purchase Agreement

3. Timetable: Detailed transaction timeline including key milestones and deadlines

4. Due Diligence Requirements: Overview of due diligence scope, process and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Companies Act 2006: Primary legislation governing company law including share capital, transfer provisions, directors' duties, company constitution requirements and pre-emption rights

Financial Services and Markets Act 2000: Regulates financial services activities, financial promotion restrictions and market abuse provisions

UK Taxation Laws: Covers Stamp Duty, Stamp Duty Reserve Tax, Capital Gains Tax and Corporation Tax implications for share purchases

UK Takeover Code: Regulates takeovers of public companies, including mandatory offer thresholds and concert party rules

Enterprise Act 2002: Key legislation for UK merger control and competition law considerations in share purchases

Competition Act 1998: Provides framework for competition law compliance in share purchase transactions

Market Abuse Regulation (MAR): Regulates insider dealing and market manipulation, particularly relevant for listed company transactions

Money Laundering Regulations 2017: Sets out due diligence requirements and source of funds verification for share purchase transactions

UK GDPR and Data Protection Act 2018: Governs data protection requirements and privacy considerations in share purchase transactions

Articles of Association: Company's constitutional document that may contain restrictions or requirements for share transfers

Shareholders' Agreements: Existing agreements that may contain provisions affecting share transfers or change of control

Stock Exchange Rules: Additional requirements for listed companies involved in share purchase transactions

Corporate Governance Code: Best practice guidelines for corporate governance that may affect transaction structure and requirements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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