Warrant Agreement Template for Singapore

A Warrant Agreement is a legal contract that gives investors the right to buy shares in a company at a specific price within a set timeframe. In Singapore's financial markets, these agreements commonly appear during funding rounds, mergers, and corporate restructuring deals.

The agreement spells out crucial details like the exercise price, expiration date, and any special conditions that trigger changes to the warrant terms. Companies listed on the Singapore Exchange (SGX) often use warrants as sweeteners to attract investors or as part of employee compensation packages, following guidelines set by the Securities and Futures Act.

Use a Warrant Agreement when raising capital through strategic investments or incentivizing key stakeholders. This document proves especially valuable for Singapore-based startups looking to attract early-stage funding while preserving cash flow, as it allows investors to buy shares at predetermined prices in the future.

Companies also implement Warrant Agreements during debt restructuring, merger negotiations, or when creating employee stock option plans. For example, a growing tech firm might offer warrants alongside convertible notes to sweeten the deal for potential investors, or use them to align senior management interests with long-term company growth under MAS guidelines.

• Traditional Equity Warrants: Most common in Singapore, allowing holders to purchase company shares at fixed prices, typically used in IPOs and fundraising rounds
• Covered Warrants: Issued by financial institutions and traded on SGX, these derivative instruments track underlying assets like stocks or indices
• Employee Stock Warrants: Tailored for staff incentive schemes, often with vesting periods and performance conditions aligned with MAS guidelines
• Debt-linked Warrants: Attached to bonds or loans as sweeteners, giving lenders potential equity upside while companies maintain lower interest rates

• Companies and Issuers: Create and issue warrants as part of fundraising strategies or employee compensation packages, following SGX listing rules
• Corporate Lawyers: Draft and review Warrant Agreements to ensure compliance with Singapore's Securities and Futures Act
• Investors: Purchase warrants for potential equity gains, often as part of larger investment packages in growth companies
• Financial Advisors: Structure warrant terms and pricing, ensuring fair value and market competitiveness
• Company Directors: Approve and execute warrant issuances, managing shareholder dilution and corporate governance requirements

• Company Details: Gather corporate information, shareholding structure, and board resolutions authorizing warrant issuance
• Warrant Terms: Define exercise price, expiration date, and number of shares per warrant under SGX guidelines
• Trigger Events: Specify conditions that modify warrant terms, like corporate actions or restructuring events
• Compliance Check: Review MAS regulations and Securities and Futures Act requirements for warrant issuance
• Document Generation: Use our platform to create a legally-sound Warrant Agreement that incorporates all mandatory elements and Singapore-specific requirements

• Identification Details: Full legal names of issuing company and warrant holders, company registration numbers, and registered addresses
• Warrant Terms: Exercise price, number of shares, expiration date, and transfer restrictions aligned with SGX requirements
• Exercise Mechanics: Detailed process for converting warrants to shares, including notice periods and payment methods
• Adjustment Provisions: Terms for modifying warrant conditions during corporate actions like splits or mergers
• Governing Law: Express statement of Singapore jurisdiction and applicable Securities and Futures Act provisions
• Representations: Corporate authority to issue warrants and compliance with MAS regulations

Warrant Agreements are often confused with Bond Issuance Agreement, as both are financial instruments used for corporate fundraising in Singapore. However, they serve distinctly different purposes and come with unique legal implications under MAS regulations.

• Rights Granted: Warrant Agreements give holders the option to purchase company shares at a preset price, while Bond Issuance Agreements represent a debt obligation with fixed repayment terms
• Duration and Flexibility: Warrants typically have longer exercise periods and more flexible terms, whereas bonds have strict maturity dates and payment schedules
• Risk Profile: Warrants offer potential equity upside with limited downside risk, while bonds provide fixed returns with priority in liquidation
• Regulatory Framework: Warrants fall under SGX's equity securities rules, while bonds are governed by debt market regulations and different disclosure requirements