The Preliminary Share Purchase Agreement is a crucial document in Nigerian corporate transactions, typically used in the initial stages of share acquisition negotiations. It serves as a bridge between informal discussions and the final share purchase agreement, providing a legally binding framework while allowing for due diligence and detailed negotiation of terms. This document is particularly important in the Nigerian business context, where complex regulatory requirements and market conditions necessitate careful structuring of corporate transactions. It typically includes provisions for exclusivity, confidentiality, and basic commercial terms, while acknowledging the need for regulatory approvals and further due diligence. The agreement must comply with Nigerian corporate law, particularly the Companies and Allied Matters Act 2020, and considers requirements under Nigerian investment and securities legislation.
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1. Parties: Identification of the seller(s) and purchaser(s), including registration details for companies
2. Background: Context of the transaction, including description of the target company and shares being sold
3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation
4. Sale and Purchase: Basic agreement to sell and purchase the shares, subject to conditions
5. Purchase Price: Preliminary agreement on purchase price or pricing mechanism
6. Due Diligence: Framework for conducting due diligence investigation
7. Conditions Precedent: Conditions that must be satisfied before proceeding to final agreement
8. Exclusivity: Commitment not to negotiate with other parties during the preliminary period
9. Confidentiality: Obligations regarding confidential information exchanged during negotiations
10. Costs and Expenses: Responsibility for transaction costs during the preliminary phase
11. Term and Termination: Duration of the preliminary agreement and circumstances for termination
12. Governing Law and Jurisdiction: Nigerian law as governing law and jurisdiction for disputes
1. Break Fee: Provisions for payment if either party withdraws from the transaction, used in larger transactions
2. Management of Target Company: Interim provisions regarding management of the target company, needed if significant time between preliminary and final agreement
3. Regulatory Approvals: Framework for obtaining necessary regulatory approvals, required for regulated industries or large transactions
4. Employee Matters: Preliminary agreements regarding key employees, needed if retention is crucial
5. Warranties: Limited preliminary warranties, used in complex transactions
6. Foreign Exchange Provisions: Required when deal involves foreign currency or international parties
1. Details of Target Company: Corporate information, share capital structure, and existing shareholders
2. Preliminary Purchase Price Calculation: Framework or formula for determining the purchase price
3. Due Diligence Requirements: List of documents and information required for due diligence
4. Timetable: Proposed timeline for due diligence, negotiations, and completion
5. Form of Confidentiality Agreement: Detailed confidentiality terms if not fully incorporated in main agreement
6. Required Consents and Approvals: List of regulatory and third-party approvals needed
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