As I understand it you cannot have an agreement that is "an agreement to agree" - technically flawed unless there is a dispute mechanism and a method of resolving what is agreed.
My understanding is that a term sheet is the salient points upon which both parties agree and that it can either be suspensive on a formal agreement being signed or can rest as the agreement if no formal agreement is signed.
Normally as I have experienced it the bank presents it with all its fees etc and you then go and get a board resolution agreeing to it that authorises someone to sign it and upon signature there are sometimes other bank documents to be signed and these are all settled at once. I certainly would hope that the company wouldn't put out an announcement if they hadn't got a concluded agreement. If it is subject to due diligence than at the end of the Due diligence the company should inform the market that all the suspensive conditions have been fulfilled or not as its a very material issue to an investor and equally important to a prospective investor.
VIL Price at posting:
2.3¢ Sentiment: None Disclosure: Held
