⇧ Create the term sheet

Well done for persuading your board of directors to accept Investor A’s offer!

You should now create a term sheet that outlines the material terms and conditions of this offer based upon the information that you have been provided with to date.

This term sheet will also help you to establish the basis for future negotiations with your selected investor.

Note that a term sheet is similar to a letter of intent but focuses mainly on the key terms and skips most of the formalities that would be contained within a written letter.

⇧ Action required

Create a term sheet to outline the material terms and conditions of Investor A’s offer.

There is some additional information below to help you.

Additional information

The following will help you to create your term sheet in combination with the information that you have already been provided to date:

• Closure of the deal will be subject to completion of the due diligence and anti-money laundering checks, a certified copy of VSC’s constitutional documents and signed board minutes approving the deal plus approving the issuance of the new share capital.
• Upon completion, VSC will require the consent of Investor A for any future amendments to the constitution, major changes to the Bigland project, issuance of new shares, sale of shares, investments, acquisitions, obtaining or granting new loans, voluntary liquidation, change in CEO or key management and change of auditors.
• No shareholder will be able to transfer shares without offering them to the other shareholders.
• All shareholders will have a pro rata right to participate in any subsequent financings of VSC.
• The agreement will include Drag Along and Tag Along shareholder clauses if the majority shareholder wishes to sell the company.
• Vanessa will enter into a non-competition and non-solicitation agreement.
• The board of directors will comprise of three directors: two (including Vanessa) directors shall be appointed by VSC and one by the Investor.
• The Investor shall receive monthly reporting and financial information from the Company management team.
• Definitive agreements shall be drafted by the Investor’s legal representatives that include customary covenants, representations and warranties of the Company.
• VSC shall grant fundraising exclusivity to Investor A for 30 days upon signing the Term Sheet and will treat everything as confidential until completion.