Scenario 02

---
name: draft-term-sheet-scenario-02
task_id: corporate-ma/draft-term-sheet/scenario-02
description: Guides drafting of an acquisition term sheet from a multi-document deal set where purchase price mechanics, financing assumptions, exclusivity, and unresolved issues must be synthesized into a non-binding but deal-defining document.
activates_for: [planner, solver, checker]
---

# Skill: Acquisition Term Sheet Drafting

## 1. Subject-matter triage

- Treat the term sheet as the primary deliverable and draft it first; do not substitute a memo or issue list for the operative document.
- Identify which provisions are intended to be binding and which are expressly non-binding; preserve that split in the draft.
- If the source set contains multiple deal paths, financing alternatives, or purchase-price variants, enumerate them before selecting the operative path.
- If only one transaction structure is supported by the materials, state that it is the sole supported structure and proceed on that basis.

## 2. Failure modes the skill is correcting

- The draft states a headline valuation without the adjustment mechanics, reference date, or treatment of debt, cash, transaction costs, and similar closing items, so the effective economics remain undefined.
- Financing language is either omitted or overgeneralized, failing to track the actual commitment structure and certainty-of-funds posture in the deal materials.
- Exclusivity is included without a defined period, permitted exceptions, or carve-outs, leaving the no-shop concept commercially ambiguous.
- Binding and non-binding provisions are blurred together, which can unintentionally expand or dilute the parties’ intended obligations.
- Open issues are embedded in the operative deal terms instead of being isolated, making it hard to distinguish agreed economics from items still for negotiation.
- Counsel recommendations are stated as observations rather than concrete next steps tied to the negotiation posture reflected in the file.

## 3. Legal frameworks / domain conventions that apply

- Term sheet non-binding character: as a market convention, the term sheet should specify that substantive business terms are non-binding while designated provisions such as confidentiality, exclusivity, expenses, governing law, and sometimes no-solicit are binding.
- Purchase price mechanics: acquisition term sheets ordinarily state the valuation basis, the pricing formula, the reference date, and the treatment of debt-like items and closing adjustments.
- Financing contingency: the draft should align with the actual financing package described in the source set and avoid implying certainty of funds that the documents do not support.
- Exclusivity / no-shop: the draft should state duration, scope, permitted contact or fiduciary-out style exceptions if any, and the triggering event for termination or extension.
- Earnout or deferred consideration: if present in the deal materials, state the metric, measurement period, payment timing, and high-level anti-manipulation / dispute principles without overlawyering the mechanics.
- Open issues and recommendations: unresolved items should be isolated in a separate section that identifies the issue, the negotiation implication, and the recommended drafting or business follow-up.

## 4. Analytical scaffolds

- Build the term sheet from the source materials in transaction order: parties, structure, consideration, financing, diligence, conditions, covenants, exclusivity, timing, and closing mechanics.
- For every commercial term, translate the deal-team wording into standard acquisition term-sheet language while preserving the intended allocation of risk.
- For every price term, state the operative formula and the closing adjustments that affect enterprise value versus equity value.
- For every financing reference, reflect the source documents exactly at the level of commitment certainty, syndication, conditions precedent, and outside date treatment.
- For every exclusivity or process covenant, specify duration, scope, and carve-outs in commercially ordinary terms.
- For every unresolved item, state the issue, the consequence if left open, and the recommended path for counsel or the business team.
- Keep the drafting disciplined: do not convert issue-spotting notes into negotiated text unless the source materials show the point is agreed.

## 5. Vertical / structural / temporal relationships

- Use a conventional acquisition term-sheet hierarchy: overview, transaction structure, consideration, financing, conditions, covenants, exclusivity, expenses, binding effect, and closing timeline.
- Preserve the temporal sequence of the transaction: signing, diligence, financing, regulatory or third-party approvals if applicable, signing-to-closing covenants, and closing.
- Where one document condition depends on another, reflect the dependency explicitly rather than flattening the sequence.
- If the materials present multiple closing scenarios or timing paths, set them out separately instead of collapsing them into one blended timeline.
- If there is a vertical relationship between parent-level commitments and target-level obligations, state which entity is bound at each stage.

## 6. Output structure conventions

- Produce a single term-sheet document as the primary output file and ensure it is complete and non-empty before finishing.
- Use standard transactional headings rather than a rubric-shaped checklist.
- Label the binding effect section clearly and distinguish binding provisions from non-binding business terms.
- Include an open issues section that lists unresolved items in ordinary deal-language, followed by counsel or deal-team recommendations.
- Include a recommended next-steps or action-items section only if it supports the term sheet; do not let it displace the operative drafting.
- Maintain a concise, deal-document tone; avoid narrative explanation outside the term sheet format.