SEBI’S
Model Underwriting Agreement

To,

The
Board of Directors………………Ltd

………………………………………….

………………………………………….

Dear
sir,

Re:
Forthcoming public issue of shares/debentures of Rs….. each for cash as
part/premium aggregating to Rs…… (Public issue)

1.     We hereby record that
we (hereinafter referred to as the underwriter) have agreed to
underwrite/procure subscription to shares/debentures of Rs…… each for cash
at par/premium aggregating to Rs….. (Rupees…. only) (hereinafter referred
to as the underwriting obligation) for the captioned public issue by…. Ltd.
(hereinafter referred to as “the Company” on the following terms and
conditions.

2.     Opening of the
subscription list: The subscription list for the public issue shall open not
later than three months from the date of this agreement or such extended
period(s) as the underwriter may agree to in writing. The subscription list
shall, unless the issue is fully subscribed, be kept open by the company for a
maximum period of 10 calendar days failing which the underwriter shall not be
bound to discharge the underwriting obligations under this agreement.

3.     To make available
final copy of the prospectus: The company shall before delivering to the
Registrar of Companies (hereinafter referred to as “ROC”) make
available to the underwriter a copy of the prospectus, which shall be as
modified in the light of the observations made by SEBI while issuing the
acknowledgment card. The underwriter shall before executing this agreement
satisfy himself with the terms of the issue and other information and
disclosures contained therein.

4.     Delivery of
prospectus to the Registrar of Companies: The prospectus in respect of the
public issue shall be delivered by the company to the ROC for registration in
accordance with the provisions of the Companies Act, 1956 not later that 30
days from the date of this Agreement or such extended period(s) as the under
writer may approve in writing, the time being the essence of this Agreement.

5.     Material disclosures
after filing of prospectus: The company agrees that, if after filing of the
prospectus with the ROC any additional disclosures are required to be made in
the interest of the investors in regard to any matter relevant to the issue,
the company shall with such requirements as may be stipulated by SEBI or the
lead manager and compliance of such requirements shall be binding on the
underwriter; provided that such disclosures shall not give a right to the
underwriter to avoid underwriting obligations unless such subsequent
disclosures are certified by SEBI as being material in nature and essential for
the contract of underwriting; the question whether or not such subsequent
disclosures are material in nature, the decision of SEBI shall be final and
binding on both the parties.

6.     Making available
copies of prospectus and application form, etc. The company shall make
available to the underwriter a minimum of…… (No. of application forms
forming part of abridged prospectus) and……. (number of copies of the
prospectus) for every lakh of ruppes of underwriting accepted by the
underwriter. If the underwriter desires to have more application forms and
prospectus than specified he must state his requirements which would then be considered
as condition for acceptance of this underwriting Agreement. Thereafter, it is
responsibility of the company to deliver to the underwriter the accepted
quantity of application forms and prospectus as soon as the prospectus is filed
with the ROC but in any case not later than 21 days prior to the date of
opening of the public issue, proof of which, should be retained by the company.

7.     Warranty as to
statutory and other approvals. The company warrants that all consents,
sanctions, clearances, approvals, permissions, licences, etc., in connection
with the public issue as detailed in the prospectus or required for completing
the prospectus have been obtained or will be obtained and the same shall remain
effective and in force until the allotment of all the shares/debentures are
completed.

8.     Sub-underwriting
arrangements: The underwriter shall be entitled to arrange for sub-underwriting
of its underwriting obligation on his own account with any person or persons on
terms to be agreed upon between them. Notwithstanding such arrangement, the
underwriter shall be primarily responsible for sub-underwriting and any failure
or default on the part of the sub-underwriters to discharge their respective
sub-underwriting obligations, shall not exempt or discharge the underwriter of
his underwriting obligation under this agreement.

9.     Treatment of
applications made with underwriters/sub-underwriters stamp for the purpose of
allotment. The application bearing the stamp of the underwriter or as the case
may be the sub-underwriter whether made on their own behalf or otherwise shall
be treated in the same manner as the applications received directly from the
members of the public and, in the event of the issue being oversubscribed, such
applications shall be treated on par with those received from the public and
under no circumstances, the applications bearing the stamp of the underwriter
or the sub-underwriter shall be given any preference or priority in the matter
of allotment of shares/debentures.

10.  Computation of
underwriter’s obligation:

1.     If the issue is
undersubscribed, the underwriting obligation, shall be determined in the manner
set out hereunder; provided that under no circumstances, the underwriter’s
obligation to subscribe/procure subscription to shares/ debentures shall exceed
the amount mentioned in clause 1 above.

2.     The following
applications for shares/debentures shall be treated pro tanto in or towards
satisfaction of the underwriter’s obligations under this Agreement, namely –

a.     applications which
have been accepted excluding those withdrawn before allotment; and

b.    applications received
from the underwriter or any of his sub-underwriters including those
applications which bear the stamp of the underwriter or any of the
sub-underwriters,

1.      

2.      

3.     After making
adjustments as provided in sub-clause (2) above the underwriting obligation of
the underwriter and other underwriters shall be, subject to following further
adjustments.

a.     The application
received from the public independently i.e. those applications not covered
under sub-clause (2) above shall be apportioned amongst all the underwriters.
Where underwriting obligations have not. been fully satisfied after adjustments
under sub-clause (2) above in proportion to their respective underwriting
obligations and to that extent their respective underwriting obligation shall
stand reduced.

b.    If, after the
adjustments made under sub-clauses (2) and (3)(a) above, it is found that the
shares/debentures available for adjustment are in excess of the
shares/debentures required to be subscribed in fulfillment of the underwriting
obligations of one or more individual underwriters, then such excess amount
required to meet the underwriting obligations of any underwriter shall be
further apportioned amongst such other underwriters, whose underwriting obligations
have not been fully discharged, in proportion to their respective underwriting
obligations.

11.  Procedure for
effecting/discharge of underwriting obligations: The underwriting obligations
as determined under clause 10 shall be discharged in the manner mentioned
below:

a.     the company shall
within 30 days after the date of closure of subscription list communicate in
writing to the underwriter, the total number of shares/debentures remaining
unsubscribed, the number of shares/debentures required to be taken up by the
underwriter or subscription to be procured therefor by the underwriter.

b.    (b)the company shall
make available to the underwriter, the manner of computation of underwriting
obligation and also furnish a certificate in support of such computation from the
company’s auditors.

c.     the underwriter on
being satisfied about the extent of devolvement of the underwriting obligation,
shall immediately and in any case not later than 30 days after receipt of the
communication under sub-clause (a) above, make or procure the applications to
subscribe to the shares/debentures and submit the same together with the
application moneys to the company.

d.    in the event of
failure of the underwriter to make the application to subscribe to the shares
as required under clause (c) above, the company shall be free to make
arrangements(s) with one or more persons to subscribe to such shares without
prejudice to the rights of the company to take such measures and proceedings as
may be available to it against the underwriter including the right to claim
damages for any loss suffered by the company by reason of failure on the part
of the underwriter to subscribe to the shares as aforesaid.

Note
– The Company is free to quantify the damages being a multiple of the value of
the shares/debentures not subscribed by the underwriter.

12.  Right to receive
underwriting commission/brokerage. Subject to the underwriter fulfilling his
underrating obligations, he shall be entitled to receive commission in respect
of the underwriting obligation undertaken by him and brokerage in respect of
the shares/debentures procured by him at the rates set out in clause 13
hereunder. The underwriting commission shall be payable only if his
underwriting commitment is fully subscribed.

13.  Underwriting
commission: (1) In consideration of the underwriter agreeing to underwrite the
shares/debentures as mentioned in clause 1 above, the company shall pay to the
underwriter a commission at the following rates;

Note:

1.     The rates as mutually
negotiated between the company and the underwriter may be inserted. Needless to
say that the rates so agreed upon shall be subject to the provisions of section
76 of the Companies Act, 1956.

2.     (2) The underwriting
commission shall be payable by the company within 15 days from the date of
finalisation of allotment and proof of such payment within the specified time
should be available with the company. The obligation to pay underwriting
commission shall arise only upon the underwriter fulfilling his underwriting
obligation and duly subscribing to the shares/debentures, if any devolved on
him.

14.  Obligations of the
company

1.     The company shall
immediately after the closure of the subscription list, take expeditious steps
for processing the applications and complete the allotment within the time
limit prescribed under the Companies Act, 1956 and also comply with other
listing requirements.

2.     If the company fails
to receive 90% of the issue amount including the amount received from the
underwriters towards devolvement, within 60 days from the date of closure of
subscription list, the company shall refund the amount paid by the underwriter
in fulfilment of his underwriting obligations. The obligation to refund the
moneys shall be without prejudice to the disputes if any in regard to the
underwriting obligation to the underwriter.

15.  Time is the essence
of the agreement: All obligations of the company and the underwriter, are
subject to the condition that time wherever stipulated, shall be of the essence
of the agreement. Consequently any failure on the part of the company or the
underwriter to adhere to the time limits shall unless otherwise agreed to
between the company and the underwriter, discharge the underwriter or company
of his/their obligations under the underwriting agreement.

16.  Right of termination
under special circumstances. Notwithstanding anything contained herein, the
underwriter shall have the option to be exercised by him at any time prior to
the opening of the issue as notified in the prospectus of terminating this
agreement under any or all of the following circumstances –

                     
i.               
if
any representations/statements made by the company to the underwriter and/or in
the application forms, negotiations, correspondence, the prospectus or in this
letter are or are found to be incorrect;

                    
ii.               
a
complete breakdown or dislocation of business in the major financial markets,
affecting the cities of Calcutta, Bombay, Madras or New Delhi;

                   
iii.               
declaration
of war or occurrence of insurrection, civil commotion or any other serious or
sustained financial, political or industrial emergency or disturbance affecting
the major financial markets of Calcutta, Bombay, Madras or New Delhi.

17.  Notice of termination
to the company: Notwithstanding anything contained in clause 16 above, in the
event of the company failing to perform all or any of the covenants within time
limits specified wherever applicable under this letter of underwriting, the
underwriter shall inform the company with adequate documentary evidence of the
breach/non-performance by Registered post/Speed post and acknowledgment
obtained therefore, whereupon the underwriter shall be released from all or any
of the obligations required to be performed by him.

18.  Net worth of the
underwriter. The underwriter, hereby declares that he satisfies the net
worth/capital adequacy requirements specified under the SEBI (Underwrites)
Rules and Regulations, 1993 or the bye-laws of the stock exchange of which the
underwriter is a member and that he is competent to undertake the underwriting
obligations mentioned in clause 1 hereinabove.

19.  Registration with the
SEBI: The underwriter hereby declares that SEBI has granted to him a
certificate of registration to act as an underwriter in accordance with the
SEBI (Underwriters) Rules and Regulations, 1993 or, he has applied for
registration to SEBI within the time stipulated under sub-section (1) of
section 12 of the Securities and Exchange Board of India Act, 1992 and is
entitled to carry on the business as an underwriter under the SEBI Act.

20.  Reference to
arbitration – Any dispute arising out of this agreement between the underwriter
and the company shall be referred to the Arbitration Committee constituted by
the Regional Stock Exchange in which the shares/debentures are to be listed and
the decision of the Arbitration Committee shall be final and binding on both
the parties.

Yours
faithfully.

for……….

(Signature
of the underwriter)

We,
the company……………… Ltd. the above named do hereby accept your offer
for undewriting on the above mentioned terms and conditions.

Authorised
Signatory……………

For……………
Ltd.

Designation…………..

Authorised
by a resolution passed at the meeting of the Board of Directors held on
the……. day of………….. 19…..

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