M. Jacko
Managing Partner and CEO

Michelle L. Jacko, Esq.

Managing Partner and CEO

Michelle L. Jacko, Esq. is the Managing Partner and CEO of Jacko Law Group, PC (“JLG”), which offers securities, corporate, real estate, and employment law counsel to broker-dealers, investment advisers, investment companies, hedge/private funds and financial industry professionals. In addition, Ms. Jacko is the Founder and CEO of Core Compliance & Legal Services, Inc., a compliance consultation firm.

Ms. Jacko specializes in investment adviser, broker-dealer, investment company and private fund regulatory compliance matters, internal control development, regulatory examinations, transition services, and operational risk management. Her consultation practice is focused on the areas of regulatory exams and formal inquiries, investment and merger and acquisition transactions, exit and succession planning, annual reviews, policies and procedures development, testing of compliance programs (including evaluation of internal controls and supervision), mock exams, senior client issues, cybersecurity, Regulation S-P, and much more.

Over the years and through a transformative market, Ms. Jacko has also developed service solutions throughout her practice, focusing on regulatory, compliance, commercial and corporate strategic solutions for the financial industry. Her practice focuses on formations and registration of broker-dealers, investment advisers and funds and platforms associated with each of these business models.  She focuses on transition and succession planning for companies, spearheading Jacko Law Group’s mergers and acquisitions practice area. She aligns her legal team to directly apply experienced legal acumen and business-savvy foresight to assist clients navigate and traverse the breakaway, formation, and growth plan for their corporation’s continued achievement, expansion, and upward trajectory.

Throughout this process, Ms. Jacko uses her 27 years of regulatory compliance experience to provide risk mitigation strategies to businesses.  She provides her clients with risk assessments, annual reviews and gap analysis, and serves as lead attorney for SEC and FINRA enforcement matters, regulatory formal inquiries, and regulatory examinations.  She has developed a practice that successfully helps our clients to be prepared for examinations through meticulous preparations, including mock interviews, compliance program document reviews, and counsel to members of senior management and interfacing with regulators throughout the process.   She frequently provides counsel on Chief Compliance Officer liability issues, assists advisors with regulatory reporting of disciplinary events and customer complaints, provides counsel on various representative onboarding and exit considerations and drafts complex agreements and client disclosure documents.

Utilizing an unparalleled service with a visionary strategy, Ms. Jacko’s counsel contributes to client success. She fosters trust amongst her team and has forged a path for JLG’s growing and multifaceted merger and acquisition practice, general corporate counsel services and regulatory compliance practice areas.

As a frequent presenter at national financial industry conferences, Ms. Jacko delivers insightful and thought-provoking workshops regarding industry hot topics and rising compliance issues. She is a frequent contributor to various industry journals and publications, including Barron’s Advisor, Charles Schwab, Investment Adviser Association’s IAA Today, National Society of Compliance Professionals’ CurrentsLawyer Monthly MagazineThomson Reuters, and more.  She also is a featured author in Modern Compliance, Vol. 1 and 2.

Ms. Jacko served as the former Vice-Chair of Education of the Corporations Committee for the State Bar of California Business Law Section and is a two-time Board member alumn of the National Society of Compliance Professionals. She is the Co-Founder and a member of the Southern California Compliance Group and also is a FINRA Arbitrator. Ms. Jacko is a member of Vistage International and actively participates in her community.

JLG and Ms. Jacko are proud to be members of the National Women Business Owners (NABWO) Corporation.

Throughout her career, Ms. Jacko has established herself as an influential leader, both locally and industry-wide. She has received numerous accolades and recognitions for her contributions, impact, and thought leadership. Since 2019, she has been selected as a finalist for San Diego Business Journal’s (SDBJ) CEO of the Year Award (2019-2022). She has also been selected for inclusion for the SDBJ’s 2022 Women of Influence 50 over 50, 2021 -2022 Women of Influence in Law SDBJ’s 2018-2022 Business Woman of the Year, 2020-2022 San Diego 500 Influential Business Leaders Award, 2020-2022 SD500, and prestigious 2020 Most Admired CEO Awards. Alongside the many awards from the SDBJ, Ms. Jacko  also was selected as a finalist for San Diego Magazine’s 2020–2021 Influential Women: Woman of the Year Award and was honored as a finalist for the 2019 NAWBO Bravo Awards - San Diego. International magazine CEO Today also selected Ms. Jacko as one of the 2019 and 2020 Business Women of the Year Awards. She also received Acquisition International magazine's Global Excellence Awards: Most Influential Woman in Securities Law 2019–2020 - San Diego, and locally was selected by San Diego Metro as one of the 12 Women of Influence in San Diego, CA.

Before starting both companies, Ms. Jacko previously served as Of Counsel at Shustak & Partners, PC. Prior to that, she was Vice President of Compliance and Branch Manager of the Home Office Supervision team at LPL Financial Services, Corporation (Linsco/Private Ledger). She also served as Legal Counsel of Investments and Chief Compliance Officer at First American Trust, FSB and held the position of Compliance Manager at Nicholas-Applegate Capital Management. In addition, Ms. Jacko was with PIM Financial Services, Inc., and Speiser, Krause, Madole & Mendelsohn, Jackson.

Ms. Jacko received her J.D. from St. Mary’s University School of Law and B.A., International Relations, from the University of San Diego. She is admitted to the State Bar of California and United States District Court, Southern District of California. Michelle holds NSCP’s Certified Securities Compliance Professional (CSCP) designation and is a member of the National Association of Women Lawyers (NAWL).

In addition to her many accomplishments, Ms. Jacko is also dedicated to giving back to her community and charitable organizations. Throughout the years she has dedicated her time and efforts to numerous organizations, including the Autism Tree Project, Wounded Warriors Project, the ASCPA, the San Diego Food Bank, School of the Madeleine and more. She also supports whenever she can the military community.  It is her dedication to her team, her practice and her community that has laid the foundation for JLG’s impact and continued growth and success.

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Practices :
Mergers & AcquisttionsPrivate Equity & Private Fund ServicesSEC/State: Regulatory Compliance Services
The Importance of a Term Sheet to Structure Your Next Business Deal
Legal Risk Management Tips Transition & Breakaway Services
July 22, 2021

Term sheets are used in a variety of transactions, including commercial negotiations, mergers and acquisitions, joint ventures, and real estate.  A term sheet is essential to effectively execute a transaction between two parties, usually a purchaser and a seller.  The document will later serve as a guide utilized in drafting the definitive agreement(s).  In terms of structure there is no “one size fits all” approach. The way you structure your term sheet depends on your company’s needs to clarify certain conditions.

This month’s Legal Risk Management Tip dives into the importance of developing a term sheet. Specifically, we will discuss terms to be considered for asset purchase and selling agreements when a company decides to sell its book or business.

What Is A Term Sheet?

A term sheet is a nonbinding outline of terms between and seller and a buyer about the material terms and conditions agreed upon for a proposed business acquisition.  Even though a term sheet is non-binding, it outlines the basic conditions of the potential purchase agreement as to things such as valuation, purchase price, closing conditions, closing timeframe, restrictive covenants, and things to be determined in the future, post-closing.

A term sheet is similar to, but different from a letter of intent (“LOI”), which is a document that preliminarily commits one party to transact with another and is predominately used in acquisitions to stipulate specific deal terms in larger business negotiations.  The main difference between an LOI and a term sheet is stylistic; the former is written as a formal letter while the latter is composed of bullet points outlining the terms.

Although term sheets and LOIs are often referred to interchangeably, they are indeed different yet accomplish similar goals and contain similar information.

What Should A Term Sheet Include?

Some of the key focal points of a term sheet include the following:

  • Valuation: This is the formula used to determine the value of the business.
  • Purchase price: This is the price an investor will pay based on the final valuation.
  • Closing: The date the transaction must close by and any conditions, or things to be performed prior to closing.
  • Promissory Note Terms: If the purchase price is not paid in full at closing, a Promissory Note outlining the payment terms of the remaining amount, interest rate, maturity date and default provisions should be provided.
  • Lookback Provisions: Any claw back, purchase price adjustments or other similar conditions, should be included as applicable.
  • Indemnification: This will outline potential liability for beaches of representations after closing.
  • Expenses: Provide what expenses each party is responsible for and as applicable, the percentage of expenses each party is liable for.
  • Dispute Resolution: In the event of any breach or disputes, will the parties seek mediation, arbitration or civil recourse.
  • Governing Law: This is the state law that the parties will be bound to.

While this list is not exhaustive, it is important to incorporate all material terms that are most important to the buyer and seller.  If done properly, a term sheet will help to add clarity to memorializing the essential terms of the asset purchase or selling agreement and may help to curtail further discussions and delays while drafting the definitive agreements prior to closing.

A. Valuation and Purchase Price

The company’s valuation, along with the amount of money invested, determines the purchase price of assets.  The valuation should but does not need to be conducted by a neutral third party. In the event the purchaser is not buying 100% of the assets or the adviser’s business, the valuation is used to determine the purchase price based upon the percentage being purchased. For instance, if the valuation was $1,000,000 and the buyer wants to purchase 10%, the purchase price of that interest will be $100,000.  The date of the final valuation is detrimental in the agreement since it affects the purchase price, payment terms, closing date, and other terms.

When the purchase price is determined, there are different ways you can structure the payment.  Some of the most common methods include: (1) Cash up-front in full, usually with the assistance of bank financing; (2) Seller financing, meaning that the buyer pays all or a part of the purchase price with a promissory note that buyer gives to seller; (3) Stock in purchaser’s company; and/or (4) Buyer’s assumption or payoff of seller’s debt. The deal can also be structured to incorporate a mixture of the above.

B. Closing

Generally, you can expect closing to take about 4-5 weeks from signing the term sheet if the deal is on a normal pace. This assumes no significant delays, breaches, or amendments to the terms. Between signing the term sheet and before closing, any conditions to closing previously outlined or indicated in the term sheet should be performed, executed, closed, whatever the case may be.  For instance, a closing condition may be that the buyer form the entity that will hold the assets post-closing, or perhaps establish the appropriate broker/dealer-custodial relationships, as necessary.

During this same time, attorneys for each side will be busy drafting, reviewing, modifying, and finalizing the definitive documents.  Depending on the structure, the definitive documents usually include the Purchase Agreement (Asset Purchase, Share/Stock Purchase, etc.), promissory note, security agreement, bill of sale, spousal consent (as applicable) and any other exhibits, addendums, or other documents (which may include restrictive covenants, independent contractor consulting agreements and other contracts to help facilitate the transaction and deal).

When all the documents are finalized and closing conditions have been met, a date and time for closing shall be set. At this closing, all the definitive agreements will be executed, the purchase price payment will be made, and the deal is considered done.  At that point, all the right title and interest in the assets (or other property subject to the transactions) will transfer to the buyer.

C. Restrictive Covenants

The term sheet and the definitive agreements generally contain covenants that will restrict one or both of the parties’ ability to solicit clients, employees, independent contractors or other agents of the other.  In certain circumstances there may be non-complete clauses or provisions that would restrict the ability of a party to own or operate a business that competes, directly or indirectly with the business or assets that were just sold.  Further, there may be confidentiality agreements and other provisions that protect the disclosure of trade secrets, client lists, vendor lists, contracts, and other key information of the business.

Generally, these provisions last for a finite period after closing (generally ranging from 2-5 years). Consequently, it is prudent for the party bound by these restrictive provisions to adhere to and comply with the conditions set forth or face potentially harsh consequences. Commonly, a breach of any of these provisions also could cause the other party to seek equitable remedies and trigger dispute resolution in the form of mediation, arbitration, or a lawsuit, which can be extremely costly.  Ensuring these provisions are not only drafted correctly at the beginning but are also closely monitored post-closing is of the utmost importance.


A term sheet is essential for helping parties to outline the base which will form the definitive agreements.  Having a term sheet solidifies the parties’ understanding on key terms before proceeding further in a transaction, potentially saving time, significant cost and efforts in negotiating an asset purchase or selling agreement and other related documents later on. A term sheet gives both the purchaser and seller peace of mind to proceed with a transaction, while negotiating final deal terms in an effective and efficient manner.

Authors: Michelle L. Jacko, Managing Partner.  Editor: JLG works extensively with investment advisers, broker-dealers, investment companies, private equity and hedge funds, banks and corporate clients on securities and corporate counsel matters.  For more information, please visit https://www.jackolg.com/.

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The Risk Management Tip is published solely based off the interests and relationship between the clients and friends of the Jacko Law Group P.C. (“JLG”) and in no way be construed as legal advice. The opinions shared in the publication reflect those of the authors, and not necessarily the views of JLG. For more specific information or recent industry developments or particular situations, you should seek legal opinion or counsel.

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