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Stock Purchase Agreement Term Sheet for Nigeria

Stock Purchase Agreement Term Sheet Template for Nigeria

A Stock Purchase Agreement Term Sheet is a preliminary document that outlines the key terms and conditions for the purchase of shares in a Nigerian company. This document serves as a framework for negotiations and subsequent preparation of the definitive agreement, incorporating provisions compliant with Nigerian corporate law, particularly the Companies and Allied Matters Act (CAMA) 2020. It sets out essential elements such as purchase price, payment terms, conditions precedent, and timeline, while addressing specific requirements of Nigerian securities regulations and investment laws. The term sheet typically indicates which provisions are binding and which are non-binding, providing a roadmap for the transaction while maintaining flexibility for detailed negotiations.

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What is a Stock Purchase Agreement Term Sheet?

A Stock Purchase Agreement Term Sheet is utilized in the early stages of share acquisition negotiations in Nigeria, serving as a crucial document that captures the principal terms and conditions of the proposed transaction. This document is particularly important in the Nigerian business context, where it helps parties navigate the requirements of the Companies and Allied Matters Act (CAMA) 2020 and other relevant regulations while establishing a clear framework for the transaction. The term sheet typically precedes the more detailed definitive agreements and includes essential commercial terms such as purchase price, payment structure, conditions precedent, and timing. It's commonly used in both private and public company transactions, though the specific requirements and level of detail may vary depending on the transaction size, complexity, and whether any regulatory approvals are needed. The document helps parties align their expectations early in the process and provides a basis for conducting due diligence and preparing final documentation.

What sections should be included in a Stock Purchase Agreement Term Sheet?

1. Parties: Identification of the seller(s), purchaser(s), and the target company

2. Background: Brief context of the transaction and current ownership structure

3. Definitions: Key terms used throughout the term sheet

4. Transaction Structure: Overview of the proposed stock purchase, including number and class of shares

5. Purchase Price: Proposed consideration and valuation methodology

6. Payment Terms: Structure and timing of payments, including any deferred consideration

7. Conditions Precedent: Key conditions that must be satisfied before closing

8. Due Diligence: Scope and process for due diligence investigation

9. Timeline: Key dates and deadlines for the transaction

10. Exclusivity: Terms of exclusive negotiation period

11. Confidentiality: Basic confidentiality obligations

12. Costs: Allocation of transaction costs

13. Governing Law: Specification of Nigerian law as governing law

14. Binding Effect: Clarification of which provisions are binding and non-binding

What sections are optional to include in a Stock Purchase Agreement Term Sheet?

1. Management and Employment: Include when key management retention is critical to the transaction

2. Break Fee: Include for larger transactions where transaction security is important

3. Earn-out Provisions: Include when part of purchase price is contingent on future performance

4. Corporate Governance: Include when purchaser will not acquire 100% and minority rights are relevant

5. Regulatory Approvals: Include for regulated industries or transactions requiring specific approvals

6. Warranties and Indemnities: Include high-level warranty scope for larger transactions

7. Non-Compete: Include when seller restrictions post-closing are important

What schedules should be included in a Stock Purchase Agreement Term Sheet?

1. Share Capital Structure: Details of target company's current share capital and shareholding

2. Key Financial Metrics: Summary of relevant financial information used in valuation

3. Timetable: Detailed transaction timeline and key milestones

4. Material Contracts: List of key contracts requiring review or consent

5. Key Personnel: List of key management and employees if relevant to transaction

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions










Clauses



































Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Energy

Healthcare

Telecommunications

Agriculture

Mining

Retail

Construction

Transportation

Education

Media and Entertainment

Professional Services

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Strategy

Executive Leadership

Corporate Secretariat

Treasury

Compliance

Tax

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Lawyer

Investment Banker

Private Equity Manager

Mergers & Acquisitions Director

Corporate Development Manager

Business Development Director

Company Secretary

Legal Counsel

Finance Director

Transaction Manager

Investment Director

Corporate Strategy Manager

Industries








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Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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