Underwriting Contract: Initial Public Offering of Common Shares with Only Selling Sharesholders (Foreign Private Issuer)

The Underwriting Contract: Initial Public Offering of Common Shares with Only Selling Shareholders (Foreign Private Issuer) is a legal template that pertains to a specific type of financial agreement between a foreign private issuer and underwriters in the context of an initial public offering (IPO). This contract is applicable when the common shares being offered to the public are solely sold by existing shareholders, rather than the issuer itself.

The purpose of this template is to establish a legally binding agreement between the foreign private issuer and the underwriters involved in the IPO. It sets out the terms and conditions that govern the underwriting arrangement, including the responsibilities and obligations of each party, the procedures for offering and selling the shares, and the allocation of risks and liabilities.

This contract covers various essential aspects such as the underwriters' compensation, which could include a discount or commission on the sale of shares, as well as any additional fees or expenses incurred during the underwriting process. It may also outline the conditions under which the underwriters have the option to purchase additional shares from the selling shareholders (often referred to as the overallotment or greenshoe option), if deemed necessary to meet market demand.

Additionally, the contract might address issues pertaining to the due diligence process, representations and warranties made by the selling shareholders and the issuer, and any conditions precedent that need to be fulfilled before the IPO can proceed. It may also specify the use of proceeds from the share offering, and any restrictions or lock-up periods imposed on the selling shareholders with regard to their ability to dispose of their remaining shares after the IPO.

Overall, this underwriting contract template serves as a comprehensive legal document that outlines the rights and obligations of both the foreign private issuer and the underwriters involved, ensuring a transparent and regulated process for the successful completion of an IPO in compliance with applicable securities laws and regulations.