Document background
The Term Sheet For Share Purchase Agreement is a crucial preliminary document used in South African corporate transactions to establish the fundamental terms of a proposed share acquisition. It serves as a roadmap for the transaction and subsequent detailed documentation, typically used after initial commercial terms are agreed but before detailed due diligence and final agreement drafting. The document captures key commercial points such as price, payment structure, conditions precedent, and timeline, while also addressing South African regulatory requirements including those under the Companies Act, Competition Act, and Exchange Control Regulations where applicable. While mostly non-binding, it often includes binding provisions on confidentiality, exclusivity, and costs. This document is particularly important in the South African context where transactions may require various regulatory approvals and must comply with specific local legal requirements, including B-BBEE considerations in certain cases.
