Writing an Underwriting Agreement

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Underwriting agreements are a crucial part of any corporate financing transaction, with formal contracts between the issuer, underwriter, and investors outlining the terms of the deal - including issuance of securities, offering price, and legal and financial obligations. Such agreements are designed to protect all parties involved in the process; from ensuring that adequate legal and financial protections are in place for the issuer’s interests to providing guarantees for the underwriter and investors that their investments will be honoured.

At its core, an underwriting agreement serves several key purposes. Firstly it sets out the rights and responsibilities for all parties involved in the transaction; from how much information must be shared by the issuer to how commissions will be paid to those who provided services during it. Secondly it provides legal protection for all those involved too - from representations and warranties offered by issuers about accuracy of information to indemnification provisions that shield everyone from potential liabilities arising out of a botched transaction. And lastly it outlines what is expected post-issuance - such as whether shares can be repurchased at a later date or if new ones can be issued too.

The Genie AI team understands just how important understanding these details is when entering into an underwriting agreement – which is why we provide free templates of market-standard ones customised for your needs. Our dataset equipped with millions upon millions of datapoints allows us to develop high-quality legals documents without paying expensive lawyer fees; enabling users to draft legally impartial documents without ever having to open an account on our platform either! We want you to have complete peace-of-mind that your agreement is up-to-scratch – so read on below for our step-by-step guidance on drawing up one today!

Definitions

Underwriter: A person or company that purchases securities from an issuer and sells them to investors.
Underwriting Agreement: A contract between an issuer and an underwriter that outlines the terms and conditions of the sale of securities.
Representations and Warranties: Statements made by the issuer to the underwriter about the issuer’s condition, facts, and circumstances.
Conditions Precedent: Requirements that must be met before an underwriting agreement is finalized.
Indemnification: The obligations of the issuer and the underwriter in the event of a breach of the agreement.
Counterparty Risk: The risk of a default on the issuer’s obligations.
Confidentiality Agreement: Outlines the obligations of each party to keep the terms of the agreement confidential.
Due Diligence: The process of reviewing an issuer’s financial statements and assessing their risk.
Regulatory Requirements: Laws and regulations that must be followed when drafting an underwriting agreement.
Allotment of Shares: The number of shares to be issued and how they are allocated.
Underpricing: Setting the offer price of securities lower than the market value.
Fees and Commissions: Charges for services rendered when drafting an underwriting agreement.
Disclaimers: Statements about the accuracy of the financial statements and other information provided by the issuer.
Legal Counsel: Expert advice on the legal aspects of an underwriting agreement.
Form of the Agreement: The format of the agreement and the information included.
Risk Assessment: Evaluating the risk of the issuer, including their financial statements and the market conditions.
Mitigation: Strategies to reduce the risk of the issuer.
Regulatory Oversight: Ensuring that the underwriting agreement complies with all applicable laws and regulations.
Termination Clauses: Outlines the conditions under which the agreement can be terminated.
Mutual Termination: Outlines the conditions under which both parties can terminate the agreement.
Termination Due to Breach: Outlines the conditions under which the agreement can be terminated due to a breach of the agreement.
Know Your Counterparty: Understanding their business, creditworthiness, and the risks associated with them.
Understand the Underwriting Process: Understanding the different stages of the process and the roles and responsibilities of the parties involved.
Understand the Issuer’s Business: Reviewing their financial statements, understanding their operations, and assessing the risk of the issuer.
Monitor Performance of the Issuer: Understanding the market conditions, assessing the issuer’s financial statements, and understanding the issuer’s operations.
Ensure Compliance with Applicable Laws: Understanding the relevant securities laws and ensuring that the agreement is compliant.

Contents

1. Overview of an underwriting agreement
2. Key elements of an underwriting agreement
3. Definition of an underwriting agreement
4. Offer terms
5. Payment terms
6. Representations and warranties
7. Conditions precedent
8. Indemnification
9. Drafting considerations
10. Structure and language of the agreement
11. Due diligence
12. Regulatory requirements
13. Negotiation and execution of an underwriting agreement
14. Negotiations between the parties
15. Execution of the agreement
16. Counterparty risk
17. Confidentiality agreements
18. Financial considerations
19. Pricing of the offer
20. Allotment of shares
21. Underpricing
22. Fees and commissions
23. Legal considerations
24. Disclaimers
25. Legal counsel
26. Form of the agreement
27. Risk analysis
28. Risk assessment of the issuer
29. Mitigation of risk
30. Regulatory oversight
31. Termination of an underwriting agreement
32. Termination clauses
33. Mutual termination
34. Termination due to breach
35. Best practices for underwriting agreements
36. Know your counterparty
37. Understand the underwriting process
38. Understand the issuer’s business
39. Monitor performance of the issuer
40. Ensure compliance with applicable laws
41. Conclusion

Get started

Overview of an underwriting agreement

• Understand the definition of an underwriting agreement: an agreement between a company issuing securities and a group of underwriters (investment banks) who agree to buy a certain amount of securities from the issuer at a specified price
• Learn the basic purpose of an underwriting agreement: to provide a mechanism for the issuer to raise funds from the public by issuing securities and for the underwriters to purchase and resell them at a profit
• Familiarize yourself with the different types of securities that can be underwritten, such as stocks, bonds, and derivatives
• Research the legal requirements of an underwriting agreement, such as registration and disclosure requirements
• Know the key parties involved in an underwriting agreement, such as the issuer, the underwriters, and the syndicate

You’ll know you can check this off your list and move on to the next step when you understand the definition of an underwriting agreement, its purpose, different types of securities that can be underwritten, the legal requirements, and the key parties involved.

Key elements of an underwriting agreement

• Understand the purpose of an underwriting agreement and its basic components
• Define the roles of the underwriter and issuer
• Identify the type of security being issued
• Specify the number of securities being issued and the terms of the offer
• Include representations and warranties of issuer and underwriter
• Establish procedures for completion of the offering
• Detail the compensation of the underwriter
• Set forth the obligations of the parties
• Include provisions related to indemnification and liability
• Include provisions related to termination of the agreement

Once you have completed this step, you have a better understanding of the key elements that should be present in the underwriting agreement.

Definition of an underwriting agreement

• Understand the definition of an underwriting agreement
• Research the different types of underwriting agreements
• Familiarize yourself with the rights and obligations of the parties involved
• Be aware of applicable laws and regulations
• When you have a clear understanding of what an underwriting agreement is, you can check this off your list and move on to the next step.

Offer terms

• Determine the type of security offered and the number of securities offered in the underwriting agreement
• Decide on the offering price of the securities listed in the agreement
• Establish a timeline for the offering period
• Decide on the fees associated with the offering
• Decide on the conditions that must be met before the offering is closed

Once all of these terms have been established and agreed upon, the Offer Terms section of the underwriting agreement can be completed and the next step can be taken.

Payment terms

• Prepare a payment terms section that outlines the obligations of the underwriter and company.
• Include provisions for payment of the underwriting discount, commissions, and other fees.
• Specify the payment schedule and any applicable penalties or interest in the event of late payments.
• Specify any applicable taxes or other deductions that the company must make from the proceeds of the securities sale.
• Specify how the proceeds of the securities sale will be distributed to the company.
• Ensure that the payment terms are consistent with applicable laws and regulations.

You’ll know that you can check this step off your list when the payment terms section is complete and contains all of the necessary provisions.

Representations and warranties

• List out all the representations and warranties that must be included in the agreement
• Ensure that the representations and warranties clearly describe the rights and obligations of the parties
• Include any additional representations and warranties that may be applicable to the transaction
• Ask the parties to provide any necessary evidence to substantiate their representations and warranties
• Have the parties sign or otherwise authenticate the agreement
• Confirm that all parties have had the opportunity to review the representations and warranties and that they understand their implications

Once all the representations and warranties have been listed out, authenticated and signed, you can move on to the next step.

Conditions precedent

• Identify what conditions must be fulfilled before the company can issue the securities
• Determine any conditions that must be satisfied by the issuer or other parties
• Specify the date that conditions must be satisfied by
• Outline any actions the issuer and other parties must take to satisfy conditions
• Describe the consequences if conditions are not satisfied
• Review the conditions precedent to ensure they are legally valid
• Once all conditions precedent have been satisfied, you can check this off your list and move on to the Indemnification step.

Indemnification

• Review the indemnification provisions in the underwriting agreement and determine the extent of the indemnity provided
• Outline the scope of the indemnification
• Identify the indemnified parties, the indemnifying party, and the obligations of each
• Determine what type of damages are covered by the indemnification
• Establish the time period for which the indemnification will remain in effect
• Once the indemnification provisions have been determined, you can move on to the next step in drafting the underwriting agreement.

Drafting considerations

• Research the applicable laws and regulations related to the underwriting agreement
• Obtain advice from legal counsel to ensure the agreement is compliant with relevant laws and regulations
• Consider the parties involved in the agreement, their roles and responsibilities, as well as their interests
• Determine what type of underwriting agreement is needed and which provisions must be included
• Draft the agreement in plain language, avoiding technical terms and legal jargon
• Have the agreement reviewed by legal counsel to ensure that it meets the needs of all parties
• When the agreement is finalized, it should be signed by all parties and copies should be kept for future reference
• Once the agreement is drafted and signed, the underwriting process can begin.

Structure and language of the agreement

• Outline the framework of the agreement and the purpose of the agreement
• Draft the appropriate language and identify any necessary legal jargon
• Consider the timeline of the agreement, the context of the agreement, and the conditions of the agreement
• Review the terms and clauses of the agreement and make sure they are clear and concise
• Determine the amount and type of financial consideration outlined in the agreement
• Have the agreement reviewed by a professional in the legal field
• Once all the necessary steps have been completed, the agreement is ready to be signed
• Check off the step and move on to the next step of due diligence

Due diligence

• Review any existing contracts, documents, or other sources of information related to the agreement
• Gather all relevant information from the parties involved
• Ensure that all parties involved in the agreement are legally authorized to enter into the agreement
• Confirm the accuracy of the information provided in the agreement
• Consider any potential legal, financial, or other risks associated with the agreement
• Conduct a thorough review of the agreement to ensure that all terms and conditions are appropriate

Once all due diligence has been completed, the underwriting agreement can be finalized and executed.

Regulatory requirements

• Research the applicable securities laws and regulations that govern the underwriting agreement and the securities being offered
• Confirm that the agreement and the offering comply with all relevant laws and regulations
• Confirm that the underwriting agreement does not contain any prohibited terms
• Confirm that the agreement does not violate any other applicable laws or regulations
• When you have confirmed that the agreement and the offering comply with all laws and regulations, you can move on to the next step.

Negotiation and execution of an underwriting agreement

• Confirm all parties have reviewed the prospectus and are ready to proceed
• Negotiate the terms of the underwriting agreement, including the underwriting discount, the number of shares to be issued, and the due diligence process
• Draft the underwriting agreement and submit it to the underwriter for review
• Execute the underwriting agreement and submit the signed agreement back to the issuer
• You will know you have completed this step when the underwriting agreement has been executed by all parties involved.

Negotiations between the parties

• Gather all relevant documents, such as the prospectus, subscription agreement, and any other legal documents
• Discuss the terms of the underwriting agreement with the other party, such as the purchase price, the number of shares, any conditions or warranties, and the fees and commissions
• Exchange drafts of the underwriting agreement until both parties are in agreement
• Make sure to include any amendments or changes to the agreement that both parties have agreed to
• Once all negotiations have been finalized and the terms of the underwriting agreement are mutually agreed upon, the agreement is ready to be executed.

Execution of the agreement

• Finalize the agreement by signing it and obtaining any necessary third-party approvals
• Verify that all parties have signed the agreement and that it’s legally binding
• Make sure any necessary fees associated with the agreement have been paid
• Exchange any documents or information that may be required
• Get a copy of the agreement to all parties involved
• When you have confirmation that the agreement is signed and all fees paid, you can check this step off your list and move on to the next step.

Counterparty risk

• Identify each party to the agreement and assess their creditworthiness
• Ensure that each party is legally capable to enter into the transaction
• Assess the other party’s reputation in the market and the industry
• Determine if any of the parties have any pending or threatened litigation
• Investigate any financial risks associated with the parties
• Confirm that each party has the legal authority to enter into the agreement

Once you have identified and assessed each party, you can move on to the next step, which will be to execute the agreement.

Confidentiality agreements

• Negotiate and execute a confidentiality agreement with the counterparty to protect any confidential or proprietary information exchanged during the underwriting process
• Ensure the confidentiality agreement includes provisions for the duration of the agreement, what information is considered confidential, how the confidential information can be used and how either party can terminate the agreement
• When the confidentiality agreement is finalized, make sure both parties sign and date the agreement
• Once the confidentiality agreement is signed, check it off your list and move on to the next step: financial considerations.

Financial considerations

• Determine how much capital is required to complete the transaction
• Identify the sources of the required capital
• Evaluate the financial terms of the transaction
• Negotiate and agree upon the terms of the financial transaction
• Record the details of the financial transaction in the underwriting agreement
• Once all of the financial considerations have been addressed, record the agreed upon terms in the underwriting agreement and check this step off your list.

Pricing of the offer

• Determine the offering price of the securities that are being issued: the per-share price, the discount or premium to the market price, and the aggregate amount to be raised in the offering.
• Consider the applicable securities law requirements, such as the limits on discounts for certain classes of investors and the need for a prospectus if the offering exceeds certain thresholds.
• Determine the fees associated with the offering, such as the underwriting fees and administrative costs.
• Set the closing date for the offering and the date for delivery of the securities issued.
• Define the methods of payment for the offering and the terms of repayment to the underwriters in the event that the offering is not completed.

When you can check this off your list and move on to the next step:

• When all the pricing information has been determined, the fees have been set, the closing date and the delivery date of the securities have been established, and the methods of payment and terms of repayment have been defined.

Allotment of shares

• Determine the total number of shares to be offered and how they will be divided (e.g. between founders, investors, etc.)
• Decide the number of shares to be offered in the primary and secondary markets
• Establish the share price for the offering
• Agree on the minimum subscription amount
• Finalize the terms of the allotment, including the date of allotment, date of payment, and date of listing
• When the allotment is complete, you can move on to the next step: Underpricing.

Underpricing

• Estimate the maximum number of shares to be sold and the pricing range of those shares
• Calculate the underpricing amount based on the estimated number of shares and the pricing range
• Set a minimum offering price for the shares
• Determine the maximum amount of shares that can be sold at the minimum offering price
• Establish the terms of the underpricing agreement
• Finalize the underpricing agreement

When you have completed this step, you will have an underpricing agreement in place and you can move on to the next step, which is Fees and Commissions.

Fees and commissions

• Identify the fees and commissions that will be charged for the underwriting agreement
• Calculate the amount of money that will be paid to both the issuer and the underwriter
• Consider the costs for any additional services, such as legal advice
• Ensure the fees and commissions are fair and reasonable for both sides
• Include the terms for payment and the timeline for when the fees and commissions will be paid
• When all fees and commissions have been settled, move on to the next step.

Legal considerations

• Research applicable state and federal laws that may impact the underwriting agreement
• Be aware of any local ordinances, regulations, and court decisions that could impact the agreement
• Consult with a legal professional to verify that the agreement is legally binding
• Ensure the agreement is compliant with all applicable laws and regulations
• Once you have completed the research and reviewed the agreement with a legal professional, you can move on to the next step.

Disclaimers

• Read the relevant statutes and cases to understand the legal rules and regulations that apply to the agreement
• Ensure that the underwriting agreement includes all necessary disclaimers
• Research any state laws that may require additional disclaimers
• Ensure that all disclaimers are clear and precise
• Include detailed language of any disclaimers to ensure there is no ambiguity
• Check with a legal counsel to ensure that all necessary disclaimers are included in the agreement
• Once all necessary disclaimers are included and approved by legal counsel, the step is complete and you can move on to the next step.

Legal counsel

• Consult with legal counsel to ensure that the agreement is valid, enforceable and that it meets the needs of all parties involved.
• Make sure to discuss any and all relevant legal implications, such as tax implications and potential liabilities.
• When the legal counsel has reviewed and approved the agreement, you can check this off your list and move on to the next step.

Form of the agreement

• Consult with legal counsel to determine what form of underwriting agreement is needed for the specific transaction
• Draft the agreement in accordance with applicable law and financial regulations
• Include all the relevant terms and conditions of the agreement
• Have the necessary parties sign the agreement
• Once all parties have signed the agreement, you can check this off your list and move on to the next step of risk analysis.

Risk analysis

• Identify the nature of the issuer’s business, the key risks associated with the business, and the issuer’s management team
• Analyze the issuer’s financials, including its balance sheet, income statement, and cash flow statements
• Consider the issuer’s credit ratings, if applicable
• Examine the issuer’s tax and legal status, including any corporate governance issues
• Consider existing and potential litigation, regulatory, and environmental issues
• Evaluate the issuer’s competitive position
• Look at the issuer’s other liabilities, including obligations to pay dividends or interest

Once you have completed the above steps, you can check off this step and move on to the next step - Risk assessment of the issuer.

Risk assessment of the issuer

• Review credit ratings of the issuer and compare to the company’s financial statements
• Analyze the issuer’s credit history, cash flow and other financial information to assess the likelihood of the issuer’s ability to repay the loan
• Meet with the issuer’s management to discuss the proposed transaction, expected repayment timeline, and any other relevant details
• Consider any potential risks associated with the loan, such as foreign currency fluctuations or political instability
• Review the issuer’s business plan and its ability to generate cash flow
• When you have completed these steps, you can move on to the next step: Mitigation of risk.

Mitigation of risk

• Identify the risks associated with the issuer and the offering
• Analyze the issuer’s ability to manage the identified risks
• Determine the issuer’s resources for mitigating the risks
• Draft provisions in the underwriting agreement to address the risks
• Ensure the provisions are enforceable and consistent with any applicable regulations
• Check the agreement to make sure it covers all the risks identified

Once you have drafted the provisions to address the risks and have ensured the agreement covers all the risks identified, you can move on to the next step of regulatory oversight.

Regulatory oversight

• Research and analyze relevant regulatory requirements for the underwriting agreement in the jurisdiction where it will be executed
• Consult with a legal expert to ensure the agreement is compliant with all applicable laws and regulations
• Make sure the agreement includes the necessary language and disclosures required by regulators
• Identify any potential risk areas and document any additional measures or safeguards that may be necessary to address those risks
• When all regulatory requirements have been met and all necessary language and disclosures have been included, the regulatory oversight step of the underwriting agreement can be checked off the list.

Termination of an underwriting agreement

• Draft a termination clause that outlines the conditions and procedures for ending the underwriting agreement
• Consider including provisions for the release of any funds that have been held in escrow
• Review any applicable laws and regulations to ensure the termination clause complies with any relevant requirements
• Consult with legal counsel to review the termination clause
• Once the termination clause is approved, the underwriting agreement is complete and can be signed
• Check off the termination of an underwriting agreement step and move on to the next step, which is to review the termination clauses.

Termination clauses

• Provide in the agreement a clause that outlines the circumstances under which an underwriting agreement can be terminated by either the issuer or the underwriter
• Specify the type of notice that should be given by either party in the event of a termination
• Include a clause that outlines the consequences of termination, such as any payments that need to be made and the date of termination
• Outline how the termination clause will be enforced if either party does not comply
• Include a clause that states the parties’ acknowledgement that the termination clause is binding

Once all these points are included in the agreement, you can check this step off your list and move on to the next step.

Mutual termination

• Review the underwriting agreement to determine whether it includes a mutual termination provision
• If there is a mutual termination provision, evaluate whether it meets the needs of both parties
• If the mutual termination provision does not meet the needs of both parties, negotiate and draft an appropriate amendment
• Once both parties agree to the mutual termination provision, have each party sign the agreement

Once you have reviewed the underwriting agreement and negotiated and drafted an appropriate amendment, if necessary, you can check this off your list and move on to the next step.

Termination due to breach

• Understand the remedies for breach of an underwriting agreement, including the right to terminate the agreement and the right to recover damages
• Make sure to specify the circumstances in which either party can terminate the agreement due to breach
• Include provisions for the transfer of rights and obligations in the event of termination due to breach
• Specify what happens to funds paid into escrow in the event of termination
• When the breach is cured, make sure to include the right to reinstate the agreement
• Once you have included all of the above provisions, you can move on to the next step in the guide.

Best practices for underwriting agreements

• Carefully review the agreement to ensure its accuracy and that it protects the interests of both parties involved
• Make sure the agreement clearly states the amount of the offering, the underwriter’s fee, and the responsibilities of both parties
• Identify any restrictions or conditions imposed on the offering, such as a minimum subscription amount or a maximum offering size
• Include provisions regarding marketing, due diligence, and public disclosure
• Ensure that all details regarding the settlement process are included
• Specify the scope of the indemnification obligations of each party

Checklist items completed:

• Reviewed the agreement to ensure accuracy
• Stated the amount of the offering, the underwriter’s fee, and the responsibilities of both parties
• Identified any restrictions or conditions imposed on the offering
• Included provisions regarding marketing, due diligence, and public disclosure
• Included details regarding the settlement process
• Specified the scope of the indemnification obligations of each party

When you have checked off each item on the checklist, you can move on to the next step.

Know your counterparty

• Research the counterparty to ensure they have the capacity to properly fulfill the terms of the agreement
• Research any past legal disputes between the parties
• Research any financial information on the counterparty to ensure they have the financial stability to fulfill the agreement
• Make sure the counterparty is authorized to enter into the agreement
• Make sure the counterparty has the legal capacity to understand the agreement

Once the research is complete and you are satisfied with the counterparty’s ability to fulfill the agreement, you can move on to the next step of understanding the underwriting process.

Understand the underwriting process

• Read up on the underwriting process and related definitions to get an overall understanding of the process.
• Familiarize yourself with the roles of the parties involved in the underwriting agreement.
• Research any applicable laws and regulations that are related to the underwriting process.
• Understand the pricing of the securities, any underwriting fees, and the commission structure.
• Learn about the rights of the underwriter and the issuer regarding the securities.

You will know when you can check this step off your list when you have a comprehensive understanding of the underwriting process and the roles of the parties involved.

Understand the issuer’s business

• Research the issuer’s business, including their financials
• Review the issuer’s past performance
• Understand the issuer’s competitive landscape
• Get a clear idea of what the issuer is trying to achieve
• When you feel comfortable that you have a good idea of the issuer’s business and its potential, you can check this off your list and move on to the next step.

Monitor performance of the issuer

• Obtain periodic financial statements from the issuer
• Analyze the issuer’s financial performance
• Identify key performance metrics, such as operating income, cash flow, and debt service coverage
• Compare the issuer’s performance against industry standards
• Review any debt covenants or other agreements that may be triggered by poor performance
• Review debt service coverage ratio to ensure that the issuer can meet its debt obligations

When you have obtained and analyzed the issuer’s financial performance, you can move on to the next step of ensuring compliance with applicable laws.

Ensure compliance with applicable laws

• Review the relevant laws and regulations that apply to the issuer and the securities, including the Securities Act of 1933, state securities laws, and other applicable federal and state regulations
• Make sure that all the provisions in the underwriting agreement are compliant with the applicable laws
• Have the issuer’s legal counsel review the underwriting agreement and provide a written opinion on the legality of the transaction
• Confirm that the issuer is in compliance with any applicable laws that may require registration of the securities
• Once you have received written confirmation from legal counsel that the underwriting agreement is compliant with applicable laws, you can move on to the next step.

Conclusion

• Review the underwriting agreement for any errors or omissions
• Make sure the agreement accurately reflects the terms of the transaction
• Have the parties to the agreement sign and date the document
• Obtain any required third-party approvals or consents
• File the signed agreement with the relevant government agency
• Once all of the above steps are complete, the underwriting agreement is ready for execution and the parties can move forward with the transaction

FAQ

Q: What are the key considerations when writing an underwriting agreement for a technology business?

Asked by Brian on May 26th 2022.
A: There are a number of important considerations to take into account when writing an underwriting agreement for a technology business. Firstly, you need to be aware of the applicable laws and regulations in your jurisdiction, as these will impact the form and content of the agreement. For example, in the UK, the Unfair Contract Terms Act 1977 applies to such agreements. You also need to consider the specific needs of your business and its operations, such as any specific terms or conditions that may be necessary. Additionally, you should take into account any potential risks that may arise from the agreement, such as intellectual property infringement or data protection issues. Finally, you should consider any possible tax implications that may arise from the agreement, as well as any potential conflict with existing contracts your business may have in place.

Q: How do I ensure my underwriting agreement is legally binding?

Asked by Emma on September 11th 2022.
A: To ensure that your underwriting agreement is legally binding, it must meet certain criteria. Firstly, it must be in writing and signed by both parties in order to be enforceable. Additionally, both parties must have capacity to enter into a contract (i.e., be of legal age) and must have provided valid consent to the agreement. Furthermore, both parties must have intended for the agreement to be legally binding and enforceable in order for it to be valid. Lastly, the agreement must contain all necessary terms and conditions as required by applicable laws and regulations in order for it to be deemed valid in court.

Q: What happens if my underwriting agreement is breached?

Asked by Matthew on April 1st 2022.
A: If an underwriting agreement is breached by one of the parties involved, then there can be a range of consequences depending on the terms of the agreement and applicable laws and regulations. Generally speaking, if one party breaches the terms of an underwriting agreement then they can be liable for damages or losses incurred as a result of their breach. Additionally, if one party has been found to have acted negligently or recklessly then they could also face punitive damages or other sanctions depending on the severity of their breach. In some cases, one party may seek to terminate the agreement due to a breach or look for specific performance from the other party in order to remedy any losses or damages incurred as a result of the breach.

Q: How can I ensure that my underwriting agreement is compliant with EU law?

Asked by John on August 14th 2022.
A: To ensure that an underwriting agreement is compliant with European Union (EU) law, you should firstly familiarise yourself with relevant EU legislation and guidelines which relate to such agreements. This includes legislation such as EU Regulation 575/2013 on prudential requirements for credit institutions and investment firms (CRR), as well as relevant case law which is applicable in this area. Additionally, it may also be useful to seek advice from an experienced lawyer who specialises in this area in order to help ensure compliance with all relevant EU laws and regulations. Finally, you should always read through all documents carefully before signing them in order to ensure that everything complies with relevant EU legislation and guidelines before signing off on them.

Q: What are some common provisions included in an underwriting agreement?

Asked by Sarah on December 7th 2022.
A: There are a number of common provisions which are typically included in most underwriting agreements. These include provisions relating to risk allocation between parties; representations and warranties; indemnification; insurance requirements; dispute resolution mechanisms such as arbitration; termination rights; payment obligations; liability limits; time frames; confidentiality clauses; governing law provisions; anti-bribery clauses; intellectual property ownership provisions; and assignment rights (if applicable). Additionally, it is also common for parties to include provisions which deal with dispute resolution processes such as mediation or arbitration should any disputes arise between them during the course of their contractual relationship.

Example dispute

Suing a Company for Violation of Underwriting Agreement

• The plaintiff must be able to demonstrate that the defendant violated the terms of the underwriting agreement. This could include failing to provide necessary financial information or not meeting deadlines.
• The plaintiff must also be able to prove that they suffered some sort of financial loss due to the breach of the underwriting agreement.
• The plaintiff must demonstrate that the defendant had a duty to perform according to the underwriting agreement and that they failed to do so.
• The plaintiff may have to prove that the defendant had knowledge of the underwriting agreement and willfully breached it.
• The plaintiff may be able to seek damages for lost profits, breach of contract, or other losses suffered due to the breach.
• The plaintiff may also be able to seek equitable relief, such as an injunction, if the breach of the underwriting agreement has or will cause irreparable harm.
• The court may award punitive damages if the defendant demonstrated a reckless disregard for the underwriting agreement.
• The plaintiff may also be able to seek attorney’s fees and costs, if allowed by the underwriting agreement.
• The court may seek to settle the dispute out of court through mediation or arbitration.

Templates available (free to use)

Rights Issue Underwriting Agreement Summary
Underwriting Agreement

‍