Warrant (Fixed Percentage Form) | Practical Law

Warrant (Fixed Percentage Form) | Practical Law

A fixed percentage warrant to be used in connection with the financing of a private company, such as in a private equity or venture capital transaction. This agreement sets out the terms and conditions by which the holder of a warrant receives the right to purchase, for a nominal exercise price and for a set exercise period, a number of equity securities of an issuer equal to a fixed percentage of the outstanding equity securities at the time of exercise. It is drafted in favor of the investor, but aims to be reasonable and includes customary provisions commonly included in many warrants. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

Warrant (Fixed Percentage Form)

Practical Law Standard Document 4-503-0976 (Approx. 43 pages)

Warrant (Fixed Percentage Form)

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A fixed percentage warrant to be used in connection with the financing of a private company, such as in a private equity or venture capital transaction. This agreement sets out the terms and conditions by which the holder of a warrant receives the right to purchase, for a nominal exercise price and for a set exercise period, a number of equity securities of an issuer equal to a fixed percentage of the outstanding equity securities at the time of exercise. It is drafted in favor of the investor, but aims to be reasonable and includes customary provisions commonly 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).