Docstoc Legal Agreements
This Warrant to Purchase Common Stock is a document which entitles an investor to buy a
certain amount of stock in a company at a fixed price until such warrant expires. Warrants
are often attached to bonds or preferred stock as a sweetener, allowing the company to pay
lower interest or dividends. They can be used to enhance the yield of the bond, and make
them more attractive to potential buyers. This document contains many of the standard
provisions commonly included in a warrant to purchase common stock, and may be
customized to fit the specific needs of the drafting party. It should be used by a company
located in Virginia that offers warrants to employees or investors.
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE
COMMON STOCK OF
_______________________________________
[Instruction: Insert the name of company]
(Void after ____ [Month] ____ [Date], 20___)
This certifies that __________________ [Instruction: Insert name of purchaser of securities],
with registered address at _________________________________ [Instruction: Insert address
of purchaser of securities] or his/her permitted assigns (the “Holder”), for value received, is
entitled to purchase from ___________________________________ [Instruction: Insert the
name of company] a Virginia __________________________ [Instruction: Insert the type of
entity, e.g., Limited Liability Company or Corporation as applicable], with its principal
office at ______________________ [Instruction: Insert the address of company] (the
“Company”), ____________ [Instruction: Insert the number of shares the Holder is entitled
to purchase] shares of the Company’s Series A Preferred Stock (the “Stock”) for cash at a price
of $____ [Instruction: Insert the purchase price of shares] per share (the “Stock Purchase
Price”), at any time or from time to time up to and including 5:00 p.m. (Pacific time) on the
earlier of (i) the closing of the initial public offering of the Company’s Common Stock pursuant
to a registration statement under the Securities Act of 1933, as amended (the “Initial Public
Offering”), (ii) the closing of a sale of substantially all of the Company’s assets, or the transfer of
voting control of the Company, to a single entity or group of affiliated entities, or (iii) ____
[Month] ____ [Date], 20___, such earlier day being referred to herein as the “Expiration Date,”
upon surrender to the Company at its principal office (or at such other location as the Company
may advise the Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and, if applicable, upon payment in cash or
by check of the aggregate Stock Purchase Price for the number of shares for which this Warrant
is being exercised, determined in accordance with the provisions hereof. Upon request by the
Holder, the Company shall provide promptly to the Holder a notice setting forth the number of
_______________
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shares and exercise price of the Stock, determined as set forth above. This Warrant is subject to
the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
a. General.
This Warrant is exercisable at the option of the Holder of record hereof, at any time or
from time to time, up to the Expiration Date for all or any part of the shares of Stock (but
not for a fraction of a share) that may be purchased hereunder. The Company agrees that
the shares of Stock purchased under this Warrant shall be and are deemed to be issued to
the Holder hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the