Document background
The Term Sheet Share Purchase Agreement is a crucial preliminary document used in South African corporate transactions to establish the framework for share acquisitions. It serves as a roadmap for the final agreement, capturing key commercial terms and conditions while maintaining flexibility for detailed negotiations. This document type is particularly important in the South African context, where considerations such as B-BBEE requirements, exchange control regulations, and Companies Act compliance must be addressed early in the transaction process. The term sheet typically precedes the due diligence phase and helps parties align on fundamental terms before incurring significant transaction costs. While mostly non-binding (except for specific provisions like confidentiality and exclusivity), it forms the basis for drafting the definitive Share Purchase Agreement and related transaction documents.
