A Letter of Intent to Purchase Shares is typically used in the initial stages of a share acquisition transaction when a potential buyer wishes to formally express their interest and outline the key terms of the proposed purchase. This document is particularly important in the German legal context, where it helps establish the framework for negotiations while typically maintaining a non-binding nature except for specific provisions like confidentiality and exclusivity. It includes essential information such as the proposed purchase price or range, payment terms, due diligence requirements, timeline, and any key conditions precedent. The document serves as a crucial stepping stone toward the final share purchase agreement and helps align parties' expectations while providing a structure for the transaction process. Under German law, careful consideration must be given to its drafting to ensure clarity regarding which provisions are binding and which are not.

1. Letterhead and Date: Company letterhead of the potential purchaser and current date

2. Addressee Details: Full name and address of the target company/current shareholder

3. Subject Line: Clear indication that this is a Letter of Intent for share purchase

4. Introduction: Opening paragraph identifying the parties and expressing interest in the share purchase

5. Transaction Overview: Brief description of the proposed transaction, including the target company and approximate percentage of shares

6. Key Terms: Essential terms including proposed purchase price (or price range), payment terms, and basic structure of the transaction

7. Due Diligence: Outline of the proposed due diligence process and timeline

8. Timeline: Proposed schedule for negotiation, due diligence, and closing

9. Exclusivity: Request for exclusive negotiation rights and proposed duration

10. Confidentiality: Statement regarding the confidential nature of discussions and any reference to existing NDAs

11. Non-Binding Nature: Clear statement about which provisions are non-binding (except typically confidentiality and exclusivity)

12. Governing Law: Statement that the letter is governed by German law

13. Closing: Signature blocks and formal closing of the letter