Term Sheet for Company Sales

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I. Overview

This Term Sheet outlines the proposed terms and conditions for the sale of [Seller's Company Name] to [Buyer's Company Name]. It serves as a non-binding agreement preceding the execution of the definitive sale agreement. The purpose of this document is to establish a clear understanding between both parties regarding the significant components of the deal.

II. Transaction Details

Herein are listed the primary details and key pieces of information about the proposed transaction:

• Type of Transaction: Complete Acquisition

• Proposed Closing Date: [Closing Date]

• Due Diligence Completion Date: [Due Diligence Completion Date]

III. Financial Terms

The agreed financial terms for the acquisition of [Seller's Company Name] by [Buyer's Company Name] are as follows:

1. Purchase Price: The Purchase Price is USD 10,000,000.

2. Payment Terms: Payment Terms is 50% upon closing, the remaining 50% in three equal annual installments

3. Escrow Arrangements: Escrow involves 10% of the Purchase Price held in escrow for 12 months post-closing

IV. Representations and Warranties

Both parties will make certain legal representations and warranties in the definitive agreement to ensure transparency and minimize risks associated with the transaction. Major areas to be covered will include, but not be limited to:

1. Ownership and title to all assets: Both parties guarantee clear ownership and valid title to all assets included in the transaction, ensuring no undisclosed claims or disputes.

2. Financial condition and liabilities: Assurance of accurate financial statements, disclosure of any debts or liabilities, and compliance with accounting standards.

3. Compliance with laws and regulations: Confirmation of compliance with applicable laws, regulations, permits, licenses, and industry standards in all business operations.

4. Material contracts and obligations: Disclosure and accuracy of all significant contracts, commitments, and legal obligations that may impact the company's operations or finances.

V. Pre-Closing Obligations

Until the closing of the transaction, [Seller's Company Name] agrees to operate its business prudently and in the ordinary course, striving to preserve its current business organization and employee relationships.

Similarly, [Buyer's Company Name] will perform all necessary preparations, including regulatory and financial arrangements, to ensure the completion of the acquisition per the terms agreed herein and future definitive agreements.

VI. Confidentiality and Exclusivity

The terms outlined in this document and any negotiations related to the transaction between [Seller's Company Name] and [Buyer's Company Name] are confidential. Both parties agree not to disclose any information about this agreement to third parties without mutual consent.

Furthermore, [Seller's Company Name] agrees not to engage in negotiations or discussions with other potential buyers for this Term Sheet's validity, generally lasting [Duration] days from the date of this agreement.

VII. Closing Conditions

Closing conditions are to be satisfied by both parties to complete the transaction as outlined in this Term Sheet and will be detailed further in the definitive agreement. Primary closing conditions will typically include:

1. Completion of all corporate and legal due diligence: Both parties must finish comprehensive reviews of corporate and legal aspects, meeting the satisfaction of the buyer.

2. Approval of the transaction by regulatory bodies: The transaction must gain approval from relevant regulatory bodies and fulfill any legal requirements related to the sale.

3. Resolution of due diligence issues: Any issues discovered during due diligence must be addressed and resolved satisfactorily before closing the transaction.

VIII. Governing Law and Dispute Resolution

This Term Sheet follows the laws of [Jurisdiction], and any disputes will be resolved through [Mediation/Arbitration/Litigation] in [City, Jurisdiction]. The prevailing party can recover reasonable attorney fees and costs, ensuring fairness and efficiency in resolving disputes within the agreed jurisdiction and method.

IX. Miscellaneous

1. Entire Agreement: This Term Sheet constitutes the entire agreement between the parties concerning the proposed transaction and supersedes all prior discussions and agreements.

2. Amendment: Any amendments or modifications to this Term Sheet must be made in writing and signed by authorized representatives of both parties.

3. Severability: If any provision of this Term Sheet is found to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

4. Counterparts: This Term Sheet may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement.

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