Warrant (General Form) | Practical Law

Warrant (General Form) | Practical Law

A general warrant to be used in connection with the financing of a private company, such as a private equity or venture capital transaction. This agreement sets out the terms and conditions for the warrant holder's right to purchase, for a set exercise period, a specific number of equity securities of an issuer for an exercise price based on the fair market value of the equity securities at the time the warrant is issued. It is drafted in favor of the investor, but is intended to be reasonable and includes common provisions included in many warrants. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

Warrant (General Form)

Practical Law Standard Document 2-501-1200 (Approx. 57 pages)

Warrant (General Form)

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A general warrant to be used in connection with the financing of a private company, such as a private equity or venture capital transaction. This agreement sets out the terms and conditions for the warrant holder's right to purchase, for a set exercise period, a specific number of equity securities of an issuer for an exercise price based on the fair market value of the equity securities at the time the warrant is issued. It is drafted in favor of the investor, but is intended to be reasonable and includes common provisions included in many warrants. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.
On August 23, 2023, the SEC adopted new rules under the Investment Advisers Act of 1940 for private fund advisers (see Legal Update, SEC Adopts New Rules for Private Fund Advisers) (the "New Rules"). The New Rules are generally effective 12 to 18 months after publication in the Federal Register and will have a material impact on limited partnership agreements for private equity funds and may require revisions to this resource. Updates are planned in the near future. For more information on the final rule, see Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews, Fed. Reg. 88 FR 63206 (Sept. 14, 2023).