What is an Underwriting Agreement?

The underwriting agreement is also known as the purchase agreement. An agreement between the company that issued the securities and the underwriter. The underwriter is an agent who signs an agreement as an agent of an underwriting group. The contents of the agreement include the selling price to the public, the difference obtained by the underwriter, the amount given to the securities issuer, and the date of liquidation. The securities issuer shall agree to pay the fees required for the public listing, and shall provide the underwriter with the securities sales letter. The issuer must guarantee the following four points: First, fill in the report in accordance with the provisions of the securities law. Second, be responsible for the content of the report. Third, open outstanding lawsuits. Fourth, the funds raised must be used for the purposes reported. Underwriters must agree to proceed with relevant matters as soon as the declaration and registration of the issuance of securities becomes effective. ^[1]

Underwriting agreement

This entry lacks an overview map . Supplementing related content makes the entry more complete and can be upgraded quickly. Come on!

The underwriting agreement is also known as the purchase agreement. An agreement between the company that issued the securities and the underwriter. The underwriter is an agent who signs an agreement as an agent of an underwriting group. The contents of the agreement include the selling price to the public, the difference obtained by the underwriter, the amount given to the securities issuer, and the date of liquidation. The securities issuer shall agree to pay the fees required for the public listing, and shall provide the underwriter with the securities sales letter. The issuer must guarantee the following four points: First, fill in the report in accordance with the provisions of the securities law. Second, be responsible for the content of the report. Third, open outstanding lawsuits. Fourth, the funds raised must be used for the purposes reported. Underwriters must agree to proceed with relevant matters as soon as the declaration and registration of the issuance of securities becomes effective. ^[1]

An underwriting agreement is an agreement that determines the rights and obligations between the exporter and the underwriter. In the underwriting agreement, the name, specifications, and model of the underwriting product must be determined. It should be clear and specific, and it should not be general, because the exporter operates many types of goods. Therefore, in the underwriting agreement, it is very important to agree on the scope of the underwriting product.

Once the underwriting agreement is signed, its related restrictive provisions will take effect immediately. For example, it is stipulated in the agreement that the supplier shall give the customer exclusive sales rights for a certain product within a certain time and region. Even if the supplier has not entered into a sales contract with the underwriter within the term of the agreement, the supplier cannot supply the same product to another Any other customer. However, when signing an underwriting agreement with overseas customers, pay attention to the anti-competitive laws, anti-monopoly laws, or antitrust laws of the relevant countries.

There are two ways to conclude an underwriting agreement: one is to only stipulate the general rights and obligations of the exporter and the underwriter, and the specific amount, amount, price, and delivery of the underwritten goods must be concluded with a sales contract; the other is an underwriting agreement. For the sales contract, that is, in the sales contract, it is stipulated that foreign merchants are given exclusive exclusive rights. This form is mostly a business with a large transaction amount and a long contract term.

I. Name, date and place of underwriting agreement

Relationship between the parties to the underwriting agreement

In the underwriting agreement, it must be made clear that the relationship between the underwriter and the exporting enterprise is the relationship between me and the principal (PrincipaltoPrincipal), which is a sales relationship.

Third, the scope of underwriting goods

Exporting companies deal with a wide variety of goods, even if they are of the same type or type, there are different brands and specifications. Therefore, in the underwriting agreement, the parties must specify the scope of the underwriting product. Under normal circumstances, the scope of underwriting products should not be too large, and the generally prescribed methods are:

1. One or more types of goods.

2. Several varieties or models of similar products.

In order to avoid disputes between the parties to the agreement on the scope of the underwritten goods, it is best to specify whether the suspension of production of the underwritten goods or the existence of new varieties in the miscellaneous agreement are applicable to the agreement.

4. Underwriting area

The underwriting area refers to the geographical scope in which the underwriter exercises the right to operate.

To determine the size of the underwriting area, the following factors need to be considered:

1. The size and capabilities of the underwriter.

2. The sales network that the underwriter can control.

3 The nature and type of underwriting goods.

4 The degree of market differentiation.

5. Topographical locations of underwriting areas, etc.

Regarding whether the underwriting area can be expanded, it should generally be specified in the agreement. According to the customary practice of many countries, if the underwriter's sales volume in his original area reaches a specified amount within a certain period of time, he has the right to request that the underwriting area be expanded.

V. Underwriting period

In China's export business, the time limit is often specified when signing an underwriting agreement, usually one year, but according to the customs and practices of some countries, the time limit is not specified in the underwriting agreement, but only the suspension clause or renewal clause.

Franchise

Franchise refers to the right of the underwriter to exercise monopoly and exclusive purchase, which is an important content of the underwriting agreement. Franchise rights include monopoly rights and monopoly rights. The former is the right of the exporter to give the underwriter exclusive sales within the specified area and period. The exporter has the obligation not to sell directly to customers in the area; The underwriter is responsible for purchasing the goods from the exporter, but not from the third party. However, in modern underwriting business, exclusive rights may often violate national laws in the underwriting area and are difficult to stipulate in the agreement. Therefore, the underwriting agreement does not need to specify both monopoly rights and monopoly rights as convection conditions, but only separately stipulates monopoly rights or monopoly rights to take effect.

Seven, the amount or amount of underwriting

In addition to the above, the underwriting agreement should also specify the quantity or amount. This amount and amount are equally binding on both parties to the agreement.

Eight, the pricing method

There are different approaches to the pricing of underwritten products, one of which is to make a one-off price within a specified period, that is, regardless of whether the price of the underwritten product rises or falls within the agreement, the agreed price shall prevail; Pricing will be made in batches within the prescribed underwriting period.

Advertising, publicity, marketing and trademark protection

The parties to the underwriting agreement are buying and selling relationships, so the exporter does not actually get involved in the sales business in the underwriting area, but is still concerned about opening up overseas markets. In order to promote products, exporters often require underwriters to be responsible for placing certain advertisements for their products.