Sample output: LOI and Term Sheet Review

This is an illustrative sample of what the LOI and Term Sheet Review skill produces. Every party, date, document, and fact is fictional — invented for illustration only.

Every output is draft legal work product for review by a licensed attorney. AgentCounsel does not provide legal advice and is not a substitute for a qualified lawyer. A licensed legal professional must review and adopt every output before it is relied upon.

The fictional scenario

Sample Request — LOI and Term Sheet Review

*Fictional sample request to the LOI and Term Sheet Review skill (skills/m-and-a/loi-term-sheet-review/SKILL.md). Every party, company, figure, date, and excerpt below is invented for illustration.*

The request

We are the buyer. Please review this term sheet for our acquisition and give us a structured read before we countersign — what it commits us to, what it leaves open, and what we should push back on. We have not yet engaged deal counsel and want an organized starting point.

Inputs supplied

Side: Buyer — *Halcyon Industrial Holdings Inc.* ("Buyer"), a mid-market acquirer.
Target: *Brightwater Components LLC* ("Target") and its members ("Sellers").
Deal type: Stock purchase — Buyer to acquire 100% of the equity interests of Target.
Transaction stage: Term sheet received; Buyer has not signed and is preparing a counter. Diligence has not started.
Jurisdiction / governing law: The term sheet names a U.S. state; treat governing law as stated in the document and flag it rather than assume.
Document set: The term sheet only. A mutual NDA is referenced but was not provided.

Fictional term sheet excerpts the review should draw on

Preamble: "This Term Sheet sets out the principal terms of the proposed transaction. Except for Sections 3, 4, and 9, this Term Sheet is non-binding and creates no obligation to proceed."
§ 1 (Purchase Price): "Aggregate purchase price of $48,000,000 in cash, subject to a customary working-capital adjustment at closing."
§ 2 (Structure): "Buyer shall purchase 100% of the issued and outstanding membership interests of Target from the Sellers."
§ 3 (Exclusivity): "For a period of sixty (60) days from the date hereof, Sellers shall not solicit, negotiate, or entertain any competing offer. This Section is binding."
§ 4 (Confidentiality): "The existence and terms of this Term Sheet are confidential and governed by the parties' mutual NDA. This Section is binding."
§ 5 (Diligence): "Buyer shall have reasonable access to Target's books, records, and personnel during the exclusivity period."
§ 6 (Escrow): "10% of the purchase price shall be held in escrow for 18 months to secure indemnification obligations."
§ 7 (Closing Conditions): "Closing is conditioned on completion of diligence satisfactory to Buyer and execution of a definitive agreement."
§ 8 (Governing Law): "This Term Sheet is governed by the laws of the State of [State name not legible in the copy provided]."
§ 9 (Expenses): "Each party bears its own expenses. This Section is binding."
*The term sheet states a target signing date of "on or about August 15" and is silent on financing, earnout, and employee retention.*

What the skill produced

Illustrative example — not legal advice. This is a sample of what the LOI and Term Sheet Review skill (skills/m-and-a/loi-term-sheet-review/SKILL.md) produces, run against the fictional request in sample-request.md. Every party, company, date, and figure is fictional and was invented for illustration; there are no real entities and no real or invented legal citations. It is the kind of draft work product a supervising attorney would review — not a finished deliverable, and not legal advice. See examples/README.md.

LOI and Term Sheet Review — Draft for Attorney Review

1. Document Summary

Document type: Term sheet for a proposed M&A transaction (the "Term Sheet").
Parties: Halcyon Industrial Holdings Inc. ("Buyer"); Brightwater Components LLC ("Target") and its members ("Sellers").
Deal type: Stock purchase — Buyer to acquire 100% of the issued and outstanding membership interests of Target (§ 2).
Side of review: Buyer.
Governing law: [CONFIRM: governing law] — § 8 names a state but the state name is not legible in the copy provided. [verify jurisdiction].
Transaction stage: Term Sheet received; Buyer has not signed and is preparing a counter; diligence has not begun.
Binding / non-binding overall: The Term Sheet describes itself as non-binding except for Sections 3, 4, and 9 (Preamble). Whether that carve-out has the legal effect the document asserts is a question for counsel — see Section 2.

2. Binding / Non-Binding Provision Table

This table records only how the Term Sheet *characterizes* each provision. It does not conclude that any provision is, as a matter of law, binding or enforceable — that is a legal question flagged for attorney review.

Provision	Document's stated characterization	Source	Note
Term Sheet as a whole	Non-binding except §§ 3, 4, 9	Preamble	Legal effect of the carve-out to be assessed by counsel
Purchase price	Non-binding	§ 1	Falls outside the binding carve-out
Deal structure	Non-binding	§ 2	Falls outside the binding carve-out
Exclusivity / no-shop	Stated as binding	§ 3	Enforceability and scope to be assessed by counsel
Confidentiality	Stated as binding	§ 4	Cross-references an NDA not provided; counsel to confirm
Diligence access	Unaddressed (not characterized)	§ 5	Binding status not stated; flagged for counsel
Escrow	Unaddressed (not characterized)	§ 6	Binding status not stated; flagged for counsel
Closing conditions	Non-binding	§ 7	Falls outside the binding carve-out
Expenses	Stated as binding	§ 9	Enforceability to be assessed by counsel

3. Deal Terms Review

Topic	What the document states	Source	Issue from the Buyer perspective
Purchase price / consideration	$48,000,000, all cash	§ 1	All-cash price is clear; confirm sufficiency of Buyer funding
Price adjustment	"Customary working-capital adjustment at closing"	§ 1	"Customary" is undefined; push for a defined target, true-up mechanic, and dispute process
Deal structure	Purchase of 100% of membership interests	§ 2	Confirm equity-purchase structure fits Buyer tax and liability goals
Exclusivity / no-shop	60 days; Sellers may not solicit or negotiate competing offers	§ 3	Buyer-favorable; confirm duration is adequate for diligence and consider an extension trigger
Confidentiality / standstill	Existence and terms confidential; governed by mutual NDA	§ 4	NDA not provided; no standstill addressed — review NDA terms
Diligence access	"Reasonable access" to books, records, personnel during exclusivity	§ 5	"Reasonable" is undefined; press for defined scope and timing
Financing	Not found	—	Term Sheet is silent; confirm whether deal is conditioned on financing
Conditions to signing / closing	Satisfactory diligence and a definitive agreement	§ 7	"Satisfactory to Buyer" is favorable; confirm no further conditions are intended
Employee / management treatment	Not found	—	Term Sheet is silent; raise key-employee retention if material
Rollover equity / incentives	Not found	—	Term Sheet is silent; confirm whether any Seller rollover is contemplated
Earnout / contingent consideration	Not found	—	Term Sheet is silent on earnout; confirm none is intended
Escrow / holdback / indemnity	10% of price escrowed for 18 months to secure indemnification	§ 6	Escrow amount and term stated; indemnity caps, baskets, and survival are not — reserve for definitive agreement
Break fee / termination fee	Not found	—	Term Sheet is silent; absence is generally Buyer-neutral here
Expenses	Each party bears its own expenses	§ 9	Confirm acceptable; consider a broken-deal cost provision if Buyer prefers
Governing law / forum	A state is named; no forum-selection clause located	§ 8	State name not legible; forum unaddressed — `[verify jurisdiction]`
Process / timeline	Target signing "on or about August 15"	Term Sheet narrative	`[deadline verification required]` — date not computed or confirmed

4. Issue List and Negotiation Checklist (Buyer perspective)

High priority

Undefined working-capital adjustment. § 1 references a "customary" adjustment with no target, mechanic, or dispute process. *Concern:* an open mechanic invites a post-closing price dispute. *Suggested direction:* negotiate a defined working-capital target, a true-up procedure, and an independent-accountant dispute path in the definitive agreement.
Escrow and indemnity scope undefined. § 6 sets a 10% / 18-month escrow but is silent on indemnity caps, baskets, deductibles, and survival periods. *Concern:* the escrow alone does not define Buyer's recovery rights. *Suggested direction:* reserve full indemnity architecture for the definitive agreement; consider whether 10% is adequate given undiagnosed diligence risk.
Confidentiality references an NDA not provided. § 4 makes confidentiality binding but ties it to a mutual NDA that was not supplied. *Concern:* Buyer cannot assess its own obligations. *Suggested direction:* obtain and review the NDA before countersigning.

Medium priority

Diligence access is vague. § 5 grants "reasonable access" without defined scope or timing. *Concern:* access disputes can compress the diligence window. *Suggested direction:* specify scope, categories, and response timeframes.
Financing not addressed. The Term Sheet is silent on financing. *Concern:* Buyer's funding path and any financing condition are undocumented. *Suggested direction:* confirm internally whether the deal is fully funded and whether a financing condition should be raised.
Exclusivity duration. § 3 sets a 60-day no-shop. *Concern:* 60 days may be tight for full diligence and definitive-agreement drafting. *Suggested direction:* consider an automatic short extension if diligence is progressing in good faith. [deadline verification required].

Low priority

Forum-selection clause absent. § 8 names governing law but no forum. *Suggested direction:* add a forum-selection clause in the definitive agreement.

5. Missing, Not-Found, and Ambiguous Items

Financing — Not found; Term Sheet is silent (§§ 1–9).
Earnout / contingent consideration — Not found; Term Sheet is silent.
Employee / management retention — Not found; Term Sheet is silent.
Rollover equity — Not found; Term Sheet is silent.
Break fee / termination fee — Not found; Term Sheet is silent.
Indemnity caps, baskets, survival — Not addressed; § 6 sets only an escrow amount and term.
Forum selection — Not found; § 8 addresses governing law only.
Governing law state — Ambiguous; § 8 names a state not legible in the copy provided. [CONFIRM: governing law].
Diligence scope — Ambiguous; § 5 says "reasonable access" without defined limits.
Working-capital adjustment — Ambiguous; § 1 says "customary" without a defined mechanic.
Binding status of §§ 5 and 6 — Unclear; the Term Sheet characterizes neither as binding or non-binding (see Section 2).
Mutual NDA — Referenced in § 4 but not provided.

6. Attorney Verification Items

[ ] The document reviewed is the complete, current Term Sheet.
[ ] The deal type (stock purchase), the side (Buyer), and the transaction stage have been confirmed as correctly stated.
[ ] The binding or non-binding status of every provision has been determined by the attorney; this review only reported the Term Sheet's own characterization, including the unclear status of §§ 5 and 6.
[ ] [CONFIRM: governing law] — the state named in § 8 has been identified and confirmed; the name was not legible. [verify jurisdiction].
[ ] Exclusivity (§ 3), confidentiality (§ 4), and the expenses provision (§ 9) have been assessed for their legal effect by counsel.
[ ] The mutual NDA referenced in § 4 has been obtained and reviewed.
[ ] Every term in the deal-terms table has been spot-checked against the cited section.
[ ] Every Not found, Unknown, and Ambiguous item has been resolved or consciously accepted.
[ ] Every date — including the "on or about August 15" signing target — has been attorney-verified; no date was computed by the agent. [deadline verification required].
[ ] The review has been completed by a qualified attorney before the Term Sheet is signed, countered, or relied upon.

*This is draft work product for attorney review only. It is issue-spotting, not legal advice, and it makes no recommendation on whether to sign or counter. A qualified, licensed attorney must review it, resolve every placeholder, assess the legal effect of every provision, and confirm all jurisdiction-specific questions before this Term Sheet is relied upon.*