Draft Underwriting Agreement

Skill: Draft Underwriting Agreement for IPO

1. Subject-matter triage

• Treat the underwriting agreement as the primary deliverable and the issues memorandum as secondary; complete the agreement first, then prepare the memo from the finished document set.
• Confirm whether the offering includes only primary shares, any secondary/selling securityholder component, an over-allotment option, lock-up letters, exchange listing approval, or other transaction-specific mechanics before drafting.
• If the source set contains one seller group only, say so explicitly; if multiple seller groups or periods exist, enumerate them before comparing terms.

2. Failure modes the skill is correcting

• Baseline drafting populates headline economics but omits deal-specific structural provisions required by the transaction documents, including selling securityholder arrangements, lock-up mechanics, and issuer-specific representations.
• Baseline drafting leaves closing conditions generic instead of tying each condition to the specific deliverables, certificates, approvals, and legal opinions required for the offering.
• Baseline drafting fails to align the underwriting agreement with the registration statement, term sheet, lock-up letters, comfort letter package, and listing materials, creating inconsistencies that later block execution.
• Baseline drafting does not produce the companion issues memorandum identifying cross-document discrepancies, unresolved points, and execution risks before signature.

3. Legal frameworks / domain conventions that apply

• Draft the agreement as a firm-commitment IPO underwriting contract under the ordinary capital-markets convention for public offerings, with the operative terms keyed to the final prospectus and execution version of the registration statement.
• Include the market-conduct provisions customarily used in IPO underwriting agreements, including restrictions on stabilization, purchases that could distort the market, and other distribution-related conduct governed by applicable securities law and underwriting practice.
• Use the securities-law disclosure framework consistently: underwriting representations must track the filed disclosure record, and any post-signing disclosure change should be treated as a potential amendment or bringdown issue.
• If the securities are to list on an exchange or market, include a listing representation and a closing condition that the relevant approval remains effective through closing.
• If a comfort letter is required, require an initial letter and a closing bringdown letter covering the negative-assurance period through the closing date.
• For selling securityholders, preserve the customary asymmetry: their representations and indemnities should be limited to the information they furnish about themselves and should not assume issuer-level disclosure responsibility.
• If the transaction includes lock-up agreements, make the lock-up covenant, duration, extension mechanics, and release mechanics internally consistent across the underwriting agreement and the ancillary lock-up letters.
• For overallotment mechanics, specify the option grant, exercise period, source of shares, and per-share economics precisely enough to operate without external assumptions.

4. Analytical scaffolds

• Start from the term sheet and source documents, then populate the agreement with all operative economics: primary and secondary share counts, pricing mechanics, underwriting discount, option size, option period, and any allocation between company and selling holders.
• Draft representations and warranties against the disclosure record, but only include company-specific reps that are supported by the source documents and transaction structure.
• Draft selling securityholder provisions only for the shares and statements attributable to those holders, and segregate them from company representations and company indemnity obligations.
• Build closing conditions as a document checklist: legal opinions, comfort letters, good standing, officer certificates, exchange approvals, lock-up confirmations, and any regulatory or corporate approvals identified in the source set.
• Compare the agreement against each operative source document and flag every mismatch in economics, party roles, definitions, timing, conditions, and ancillary letter terms.
• For the issues memorandum, record each issue with a severity label using a fixed ordinal scale stated at the top, then explain the discrepancy, the controlling source, the affected provision, and the recommended fix.
• When an issue depends on multiple parties, periods, or alternative terms, break it out by item rather than collapsing it into a single generalized observation.
• For each legal proposition used in the drafting or memo, anchor the proposition to the relevant authority or standard that supports the drafting choice, including the governing securities-law rule, market-practice convention, or document-specific instruction reflected in the source set.

5. Vertical / structural / temporal relationships

• Treat the registration statement, preliminary prospectus, final prospectus, term sheet, underwriting agreement, comfort letter, opinions, officer certificates, and lock-up letters as a single coordinated package; a mismatch in one can render another inaccurate or unenforceable.
• Draft representations to match the disclosure state at signing, and draft bringdown mechanics to address changes between signing and closing.
• Sequence the operative timing provisions so that pricing, allocation, signing, mailing/final prospectus delivery, option exercise, and closing each have a clear trigger and relationship to the others.
• Make sure any automatic extension or early release of lock-up restrictions is harmonized across all documents that mention transfer restrictions.

6. Output structure conventions

• Produce two DOCX-ready documents: the underwriting agreement first, then the issues memorandum.
• The underwriting agreement should read as a complete execution version with conventional article structure, defined terms, parties, recitals, operative covenants, conditions, indemnification, contribution, termination, and miscellaneous provisions; do not leave blanks or placeholder text.
• Do not rely on commentary in lieu of operative drafting; the agreement must contain the actual contractual language needed to sign.
• The issues memorandum should be a practical closing memo, not a narrative summary: define the severity scale once, then provide numbered entries that identify the discrepancy or open item, the controlling source, the impacted provision, the downstream consequence, and the recommended resolution.
• End the memo with a concise Recommended Actions section that assigns each action to the appropriate role and ties it to the signing, pricing, closing, or filing milestone.
• Before finalizing, verify by name that underwriting-agreement.docx and issues-memorandum.docx are both populated with substantive content, not merely descriptions of the deliverables.