Top 10 Practice Tips: Negotiating an Underwriting Agreement

This practice note provides key practice tips for negotiating an underwriting agreement in connection with a registered securities offering. It explains the role of the underwriting agreement in documenting the commercial and legal terms under which underwriters purchase and distribute securities and highlights the importance of coordination between the issuer’s and underwriter’s counsel and their critical roles in negotiating key provisions of the agreement. The discussion covers the use of standard form underwriting agreements and how they are adapted based on factors such as the type of offering, the issuer’s profile, and market precedent. It outlines the scope and purpose of representations and warranties, including how they reflect diligence considerations and risk allocation, as well as how definitions relating to material adverse changes affect deal certainty. This document also addresses covenants governing issuer conduct prior to closing, compliance-related representations involving anti-corruption, sanctions, and anti-money laundering laws, and provisions allocating responsibility for disclosure of underwriter-provided information. Additional topics include indemnification and termination provisions, lock-up arrangements intended to support market stability, allocation of offering-related expenses, and the delivery of legal opinions, certificates, and comfort letters as closing conditions. Overall, the document surveys the principal considerations associated with underwriting agreements in public offerings.

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