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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.

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