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Term Sheets: Five Legal Tricks To Make Them Work For You
One of my first questions when asked to draft the agreement for a client's new business deal is whether a term sheet (also known as a letter of intent or summary of terms) has been prepared. A term sheet is a short and sweet document that sets out the parties' mutual understanding of the main terms they will agree on in a later definitive agreement. The key word is mutual: while you and your counterpart may have agreed a deal over a nice wine dinner, your ...
Your Right to Terminate: Quite Possibly the Most Important Right In Your Business Contract
It's almost inevitable. At least three or four times a year, the phone will ring or an email will arrive with the client saying something like this: "John, it's not going as we had hoped. We need to know how to get out of this deal, and the consequences. How soon can you review the contract? Rewind 6-12 months prior to this message, when the sky was blue, the birds were singing, and this was going to be the best deal in history. Indeed, ...
How to Maximize Your Minority Rights in Small-Scale Private Equity Investments
Even if you consider yourself a small-scale investor in private companies relative to today's private equity giants, you should seek certain basic minority rights to protect your investment and enhance your exit opportunities. In fact, most minority protections that a small-scale investor should seek are exactly the same as those that any larger PE fund would require. Among my clients, these small-scale private equity investments generally range from $100,000-$3,000,000 for purchases of 10%-30% of a company's outstanding equity. They ...
Top 9 Warning Signs in a Business Deal
One of the benefits of being a corporate lawyer is the opportunity to participate in a variety of interesting deals. In these, you encounter a motley crew of characters. You witness a range of negotiating styles and tactics, and learn which are effective and which are not. You see some ventures succeed and many others fail. In the great theatre of the deal, there are rare moments in which something may not feel right to the lawyer or the client about a proposed business ...
Coming to America: What is the best legal structure for selling your products in the USA?
As an international lawyer, my clients based outside the U.S. often ask how they should structure sales of their products in the U.S. market. Actually, they usually say, "we have decided to form a U.S. subsidiary [or to sign this proposed agreement, or to...], how much would you charge to help us?" And then I ask some questions and the client and I work together to implement a strategy that meets the client's goals, which may be ...
Is Your Event Sponsorship Agreement Missing Any Of These Essential Terms?
Sponsorship dollars and ticket sales are the economic engines of music festivals and other special events. The organizer will customarily prepare a form of sponsorship agreement for use with sponsors, although certain sophisticated sponsors (e.g., Red Bull) may prefer their own form of agreement. If an anchor sponsor wishes to use its own form, then the organizer should use it to expedite closing the deal. Attorney time should be spent on the more critical negotiation points rather than arguing over ...