USA Letter of Intent to Purchase Preferred Stock

Set out the terms of an offer to buy preferred stock in a US company planning an initial public offering with this Letter of Intent to Purchase Preferred Stock.

• The proposed transaction would see the investor purchasing preferred stock convertible into shares of common stock at any time. The preferred stock would be subject to mandatory conversion in the event of a Qualified IPO.
• Non-cumulative dividends will accrue on the preferred stock. Upon conversion into common stock, all dividends would be canceled. In addition, the company will create an option pool of unallocated shares to attract and provide incentives for key employees.
• The Letter of Intent is intended solely as a basis for discussion, not as a legal contract, and it is not legally binding except as it relates to the negotiations between the parties.