Underwriting Contract: Initial Public Offering of Common Shares with Selling Sharesholders (US Issuer)

The Underwriting Contract: Initial Public Offering of Common Shares with Selling Shareholders (US Issuer) is a legal template that outlines the agreement between a company (the issuer) and an underwriting syndicate or investment bank. This contract specifically pertains to an initial public offering (IPO) where the issuer offers its common shares to the public for the first time.

The template covers the terms and conditions under which the underwriters will purchase and sell the issuer's common shares to investors. It also involves the participation of selling shareholders, who may be existing shareholders looking to sell their stake in the company.

The contract includes sections that detail the specific terms of the offering including the number of shares to be offered, the offering price, and any additional terms and conditions. It outlines the responsibilities of both the issuer and the underwriters in terms of due diligence, registration, filing requirements, and any necessary disclosures.

Furthermore, the contract defines the underwriters' compensation in the form of underwriting fees, commissions, and any additional expenses that may be involved in the offering. It may outline the distribution of shares among the underwriters and selling shareholders, as well as any lock-up agreements that restrict the selling shareholders from disposing of their shares for a specific period.

The template also addresses the allocation and stabilization of the shares in case of oversubscription or market volatility. It may include provisions for the underwriters to have an option to purchase additional shares from the issuer in case of demand exceeding the initial offering size.

This legal template is primarily used by companies and underwriters while going through the process of conducting an IPO. By using this template, both parties can ensure they are entering into a comprehensive and legally binding agreement, protecting their interests and clarifying their obligations throughout the IPO process.