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Term Sheet Share Purchase Agreement for Singapore

Term Sheet Share Purchase Agreement Template for Singapore

A Term Sheet Share Purchase Agreement under Singapore law is a preliminary document that outlines the key terms and conditions for the purchase of shares in a company. It serves as a foundation for the subsequent detailed Share Purchase Agreement, incorporating provisions compliant with Singapore's Companies Act and relevant regulations. While typically non-binding except for certain clauses like confidentiality and exclusivity, it captures the essential commercial terms agreed between parties and provides a framework for further negotiation and due diligence.

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What is a Term Sheet Share Purchase Agreement?

The Term Sheet Share Purchase Agreement is commonly used in Singapore's business environment as an initial step in share acquisition transactions. It is particularly valuable when parties need to document their preliminary understanding before committing to detailed legal documentation and due diligence. This document typically includes key commercial terms such as purchase price, payment structure, conditions precedent, and timeline, while adhering to Singapore's regulatory framework. It serves as a roadmap for the subsequent detailed Share Purchase Agreement and helps identify potential issues early in the negotiation process.

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 brief company history

3. Definitions: Key terms used throughout the term sheet

4. Transaction Structure: Overview of proposed share purchase arrangement

5. Purchase Price: Consideration and payment terms

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

7. Timeline: Expected dates for key milestones

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

1. Exclusivity: Period during which seller cannot negotiate with other parties - used when buyer requires exclusive negotiation rights

2. Break Fee: Compensation if either party terminates negotiations - used in high-value transactions or where significant due diligence costs are expected

3. Management Retention: Terms for keeping key management post-acquisition - used when retention of key personnel is crucial

4. Earnout Provisions: Additional payments based on future performance - used when purchase price depends on future performance metrics

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

1. Schedule 1: Share Capital Structure: Details of current shareholding and share classes

2. Schedule 2: Key Assets: List of material assets included in the transaction

3. Schedule 3: Due Diligence Requirements: Outline of required due diligence items

4. Schedule 4: Proposed Timetable: Detailed timeline for transaction completion

5. Appendix A: Pro-forma Balance Sheet: Projected financial position post-transaction

Authors

Alex Denne

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

Jurisdiction

Singapore

Publisher

Ƶ

Cost

Free to use

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