Underwriting Agreement Template for United States

A Underwriting Agreement is a crucial contract between a company issuing securities and investment banks that manage the public offering process in the Philippines. These agreements spell out how investment banks will buy the securities from the issuer and resell them to investors, typically guaranteeing a minimum amount of funds to be raised.

Under Philippine securities regulations, the agreement must detail key terms like pricing, underwriting fees, and the banks' commitment level - firm commitment or best efforts basis. It protects both parties by clearly defining responsibilities around due diligence, marketing roadshows, and compliance with Securities and Exchange Commission requirements for public offerings.

Companies need a Underwriting Agreement when planning to raise capital through an Initial Public Offering (IPO) or secondary offering in the Philippines. This agreement becomes essential once you've decided to work with investment banks to distribute your securities and need to formalize the terms of their commitment.

The timing is particularly critical when coordinating with multiple underwriters, as the agreement needs to be in place before starting roadshows or marketing activities. Companies preparing for major expansion, debt restructuring, or seeking to tap public markets for growth capital typically require this agreement 3-6 months before their planned offering date.

• Firm Commitment Underwriting: Investment banks guarantee to buy all securities and assume full market risk, typically used for large, established companies with strong financials
• Best Efforts Underwriting: Banks only agree to sell as many securities as possible without purchasing guarantee, common for smaller or riskier offerings
• Standby Underwriting: Underwriters agree to purchase unsold shares after the public offering, providing a safety net for issuers
• Syndicated Underwriting: Multiple investment banks collaborate to manage large offerings, sharing both risk and distribution responsibilities

• Issuing Companies: Corporations seeking to raise capital through public offerings, responsible for providing accurate information and meeting disclosure requirements
• Investment Banks: Lead underwriters who manage the offering process, conduct due diligence, and commit to purchasing or selling securities
• Legal Counsel: Corporate lawyers who draft and review the Underwriting Agreement, ensuring compliance with SEC regulations
• Securities Regulators: Government officials who review and approve the agreement as part of the registration process
• Company Directors: Board members who must approve the final terms and execute the agreement on behalf of the issuer

• Financial Details: Gather complete information about offering size, security type, pricing mechanism, and underwriting fees
• Company Information: Compile current financial statements, corporate documents, and material business contracts
• Regulatory Compliance: Confirm SEC registration requirements and prepare necessary disclosures
• Underwriter Details: Document the syndicate structure, commitment levels, and distribution arrangements
• Risk Assessment: Identify and document potential market risks, business challenges, and material contingencies
• Timeline Planning: Create a detailed schedule for due diligence, marketing activities, and closing requirements

• Party Identification: Complete details of issuer, underwriters, and any co-managers or selling group members
• Securities Description: Precise details of securities being offered, including type, quantity, and pricing terms
• Underwriting Terms: Clear specification of commitment type, commission structure, and price determination method
• Representations & Warranties: Issuer's statements about business condition, financial status, and legal compliance
• Closing Conditions: Specific requirements for completing the transaction, including regulatory approvals
• Indemnification: Provisions protecting underwriters against losses from issuer's misrepresentations
• Termination Rights: Circumstances allowing parties to cancel the agreement before closing

The Underwriting Agreement is often confused with a Bond Purchase Agreement in Philippine securities law, but they serve distinct purposes in capital raising. While both involve the sale of securities, their scope, parties, and application differ significantly.

• Purpose and Scope: Underwriting Agreements cover a broader range of securities (stocks, bonds, or other instruments) and include comprehensive distribution arrangements, while Bond Purchase Agreements focus specifically on debt securities and their direct sale
• Party Structure: Underwriting Agreements involve multiple investment banks forming a syndicate with complex responsibilities, whereas Bond Purchase Agreement typically involves direct transactions between issuer and institutional investors
• Risk Distribution: Underwriting Agreements include detailed risk-sharing mechanisms among syndicate members, marketing commitments, and pricing mechanisms, while Bond Purchase Agreements focus more on payment terms and bond features
• Regulatory Requirements: Underwriting Agreements must comply with broader SEC regulations for public offerings, while Bond Purchase Agreements face more specific debt-market regulations