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1. Parties: Identifies the issuing company and the preferred equity investor(s)
2. Background/Recitals: Sets forth the context and purpose of the preferred equity investment
3. Definitions: Defines key terms used throughout the agreement
4. Terms of Preferred Stock: Details the fundamental rights and preferences of the preferred shares
5. Dividend Rights: Specifies dividend rates, payment terms, and preferences
6. Voting Rights: Outlines voting powers and any special voting provisions
7. Liquidation Preferences: Details priority and amounts in case of liquidation or sale
8. Transfer Restrictions: Specifies limitations on transfer of preferred shares
1. Conversion Rights: Terms for converting preferred to common stock - used when convertible preferred stock is being issued
2. Anti-dilution Provisions: Protections against dilution of ownership - used when investors require protection against future down rounds
3. Registration Rights: Rights to register shares for public trading - used when future IPO is contemplated
4. Board Representation: Rights to board seats or observer rights - used when investors require direct oversight
1. Certificate of Designation: Formal document detailing preferred stock rights and preferences
2. Capitalization Table: Current and pro-forma ownership structure
3. Investor Rights Agreement: Supplemental agreement detailing investor privileges
4. Disclosure Schedule: Company disclosures and exceptions to representations
5. Form of Stock Certificate: Template for preferred stock certificates
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