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A Warrant Agreement sets out the terms and rights for purchasing company shares at a specific price within a set timeframe. In New Zealand, these legal contracts give investors or employees the option to buy shares later, often at today's prices - making them valuable tools for fundraising and staff incentives.

The agreement spells out crucial details like the exercise price (what you'll pay per share), when you can buy the shares, and any conditions that must be met first. Under NZ securities law, warrant terms must be clearly documented and properly disclosed, especially when offered as part of employee share schemes or investment rounds.

Consider using a Warrant Agreement when raising capital without immediately diluting existing shareholders. This tool works especially well for NZ startups offering early investors future buying rights, or when creating employee incentive schemes that align staff interests with company growth.

The timing is right for a Warrant Agreement during funding rounds, merger negotiations, or when structuring executive compensation packages. It helps bridge valuation gaps between investors and founders, while meeting Financial Markets Authority requirements for securities offerings. Many Kiwi companies use warrants to attract key talent by offering potential ownership without immediate share issuance.

• Plain Share Warrants: Most common type, giving holders the right to buy company shares at a set price within a specific timeframe
• Employee Share Warrants: Tailored for staff incentive schemes, often with vesting periods and performance conditions
• Investor Warrants: Used in funding rounds, typically with anti-dilution provisions and specific exercise triggers
• Convertible Note Warrants: Attached to debt instruments, allowing conversion to equity under preset terms
• Strategic Partnership Warrants: Customised for business alliances, with exercise rights tied to commercial milestones

• Company Directors: Approve and sign Warrant Agreements on behalf of the issuing company, setting terms and conditions
• Corporate Lawyers: Draft and review agreements to ensure compliance with NZ securities laws and Companies Act requirements
• Investors: Receive warrants as part of funding rounds, with rights to purchase shares at specified prices
• Employees: May receive warrants as part of compensation packages or incentive schemes
• Company Secretary: Maintains warrant records, tracks exercises, and ensures proper documentation
• Financial Advisors: Help structure warrant terms and advise on pricing and exercise conditions

• Share Details: Gather current share price, number of shares covered, and exercise price calculations
• Exercise Terms: Define the exercise period, vesting schedule, and any performance conditions
• Company Information: Compile current shareholding structure and board approvals for warrant issuance
• Recipient Details: Document warrant holder information and any special conditions or restrictions
• Legal Requirements: Check FMA compliance needs and Companies Act obligations
• Documentation: Use our platform to generate a legally-sound Warrant Agreement template that includes all required elements
• Review Process: Set up internal approval steps and signature requirements

• Parties: Full legal names and details of the company and warrant holders
• Exercise Terms: Clear specification of exercise price, period, and mechanism
• Share Details: Number and class of shares, along with any transfer restrictions
• Vesting Schedule: Timing and conditions for warrant exercise rights
• Anti-dilution: Provisions protecting warrant holders from share value dilution
• Representations: Company's authority to issue warrants and shares
• Governing Law: Explicit reference to New Zealand law and jurisdiction
• Amendment Terms: Procedures for modifying agreement terms
• Termination: Conditions and process for ending warrant rights

Warrant Agreements are often confused with Warranty Agreements, despite serving very different purposes in New Zealand business law. While both relate to business commitments, their core functions and applications differ significantly.

• Purpose: Warrant Agreements grant future rights to purchase company shares, while Warranty Agreements provide guarantees about product or service quality
• Legal Nature: Warrants are financial instruments regulated under securities law, whereas warranties are contractual promises about specific characteristics or performance
• Duration: Warrant Agreements typically have specific exercise periods spanning months or years; Warranty Agreements usually cover shorter, defined warranty periods
• Value Proposition: Warrants offer potential equity ownership and investment returns; warranties provide protection against defects or performance issues
• Parties Involved: Warrants involve companies and potential shareholders; warranties typically involve sellers and buyers