10+ Warrant Agreement Template Sample |

Contents hide

How to Create a Warrant Agreement

Warrant can be defined as a security which entitles the holder to purchase the issuing company’s underlying stock at a specified price until the expiry date. In this case, this is very important to make a warrant agreement. Now, we will discuss about it further in this article.

Types of Warrant

There are some types of warrant that you will have to know. The first is equity warrant where it offers investors the rights to purchase a company’s shares at a fixed price at the specified date. It can also offer investors the rights to sell back a company’s shares at a fixed price at the specific date.

The second type is covered warrant. It is a warrant which has some underlying backing. The next type is basket warrant. There is also index warrant where it uses an index as the underlying asset. Then, a wedding warrant is attached to the host debentures & can be expired only if they are surrendered.

The next type is detachable warrant where its security portion can be detached from the debenture & traded separately. Then, a naked warrant is issued without an accompanying bond. The last is cash / share warrant where the settlement can be cash or physical delivery of shares.

How to Make a Warrant Agreement

In writing a stock warrant agreement, make sure that you include the following parts. It should be started with the title. After that, the parties involved must be defined first. Then, you will need to include the purchase of shares.

This agreement also needs to include the exercise period clearly. Next, the method of exercise should also be described in the agreement clearly. For the next part, you will have to provide certificates for shares: amendments of warrants. It is also very important to include issuance of shares.

You cannot forget providing the adjustment of exercise price as well as numbers of shares. This part can be broken into 3 and you must explain them. They include a. Subdivisions, combinations & other issuances, b. Reclassification, reorganization & consolidation, and c. Notice of adjustment.

The next part of the agreement is no fractional shares or scrip. Representations of the company should also be included. Then, there is also a section for representations & warranties by the holder. To describe it clearly, you can break it off into some details with bulleting numbers.

Restrictive legend may also need to be included in the agreement. Then, you can add warrants transferable, too. You should also include rights of stockholders. There are some other parts or sections to be included in a warrant agreement template. They are notices, governing law, & rights & obligations.

At the end of the agreement, it must be for signature to make it valid. Under the signature, the name and address must be stated clearly. The date of signing a warrant agreement also cannot be skipped. If you need some samples, you can search free downloadable & editable templates on internet easily.

How to Create a Warrant Agreement

Types of Warrant

How to Make a Warrant Agreement

Similar Posts: