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The LOI For Business Purchase is a crucial preliminary document used in Nigerian business acquisitions to establish the framework for negotiations between potential buyers and sellers. This document serves as a roadmap for the transaction, outlining key commercial terms while maintaining flexibility for detailed negotiations. Under Nigerian law, particularly considering the Companies and Allied Matters Act (CAMA) 2020 and other relevant legislation, the LOI typically contains both non-binding provisions regarding commercial terms and binding provisions concerning confidentiality, exclusivity, and costs. It's commonly used before commencing detailed due diligence and formal agreement negotiations, providing a structured approach to complex business acquisitions while protecting both parties' interests during the negotiation phase.

1. Date and Parties: Opening section identifying the date and the parties involved, including full legal names and addresses

2. Introduction: Brief statement establishing the purpose of the letter and the parties' intent to negotiate the business purchase

3. Transaction Overview: High-level description of the proposed transaction, including the business being purchased and transaction structure

4. Purchase Price and Payment Terms: Proposed purchase price, payment structure, and any price adjustment mechanisms

5. Due Diligence: Framework for the due diligence process, including timing and access to information

6. Key Terms: Essential terms of the proposed transaction including assets/shares to be purchased, key assumptions, and major conditions

7. Timeline: Proposed schedule for negotiation, due diligence, and closing of the transaction

8. Confidentiality: Binding provisions regarding the confidentiality of negotiations and shared information

9. Exclusivity: Any exclusive negotiation periods and their terms

10. Binding Provisions: Clear statement of which provisions are binding (typically confidentiality, exclusivity, governing law, and costs)