Document background
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.
