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Warrant Subscription Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions under which an investor can acquire warrants from a company, with the right to purchase shares at a predetermined price within a specified period. The document addresses key aspects including warrant terms, exercise mechanics, regulatory compliance requirements specific to the UAE jurisdiction, and necessary approvals from relevant authorities. It incorporates provisions that align with UAE Commercial Companies Law and securities regulations, while also considering specific requirements if the issuing company operates within any of the UAE's free zones.

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What is a Warrant Subscription Agreement?

The Warrant Subscription Agreement is a crucial document in UAE corporate finance transactions, particularly used in growth-stage financing and strategic investments. This agreement type is commonly employed when companies wish to provide investors with the right to acquire shares at a later date, often as part of a larger financing package. The document must comply with UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and relevant securities regulations, while potentially also addressing free zone requirements where applicable. The agreement typically includes detailed provisions on warrant terms, exercise procedures, anti-dilution protections, and regulatory compliance requirements. When drafting a Warrant Subscription Agreement in the UAE, special attention must be paid to local ownership restrictions, regulatory approvals, and Shariah compliance considerations if relevant.

What sections should be included in a Warrant Subscription Agreement?

1. Parties: Identification of the issuing company and the warrant holder(s)

2. Background: Context of the warrant issuance, including corporate authority and purpose

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Warrant Grant: Details of the warrants being issued, including number and class

5. Exercise Price and Mechanics: Specification of the exercise price and detailed procedures for exercising the warrants

6. Term and Expiration: Duration of the warrants and expiration conditions

7. Adjustments: Provisions for adjusting warrant terms in response to corporate actions

8. Representations and Warranties: Standard representations from both parties regarding capacity and authority

9. Transfer Restrictions: Limitations on the transfer of warrants in compliance with UAE law

10. Notices: Communication procedures between parties

11. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction provisions

12. General Provisions: Standard boilerplate provisions including amendments, waivers, and severability

What sections are optional to include in a Warrant Subscription Agreement?

1. Registration Rights: Required if the underlying shares need to be registered with UAE authorities

2. Tag-Along Rights: Optional protection for warrant holders in case of company sale

3. Anti-Dilution Provisions: Protection against dilution of warrant value, if negotiated

4. Information Rights: Rights of warrant holders to receive company information, if agreed

5. Board Observer Rights: Rights to observe board meetings, if granted to warrant holders

6. Shariah Compliance: Required if the agreement needs to be Shariah-compliant

7. Free Zone Provisions: Required if the company operates in a UAE free zone

What schedules should be included in a Warrant Subscription Agreement?

1. Form of Warrant Certificate: Template for the physical warrant certificate

2. Exercise Notice: Standard form for exercising the warrants

3. Calculation of Exercise Price: Detailed methodology for calculating the exercise price

4. Corporate Authorizations: Copies of relevant corporate approvals and authorizations

5. Regulatory Approvals: Copies of required UAE regulatory approvals

6. Shareholders' Agreement: Reference to or extract of relevant shareholders' agreement provisions

7. Articles of Association: Relevant excerpts from the company's articles of association

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Publisher

Ƶ

Cost

Free to use

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