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A Underwriting Agreement forms the backbone of securities offerings in the UAE, establishing the legal relationship between a company issuing securities and its underwriters. It spells out how investment banks will purchase and distribute shares or bonds to investors, typically during an Initial Public Offering (IPO) or debt issuance on local exchanges like ADX or DFM.

Under UAE Securities Authority regulations, these agreements must detail critical elements like pricing mechanisms, risk allocation, and underwriter commitments. They protect both parties by clearly defining responsibilities, including due diligence requirements, marketing obligations, and conditions that could trigger agreement termination. For UAE companies going public, this agreement serves as their roadmap through the complex offering process.

Companies need a Underwriting Agreement when raising capital through public securities offerings in the UAE markets. This becomes essential during IPOs, bond issuances, or when listing securities on exchanges like the Abu Dhabi Securities Exchange or Dubai Financial Market. The timing typically aligns with the final stages of preparation for the public offering, after receiving initial regulatory approvals.

The agreement becomes crucial when coordinating with multiple investment banks or underwriters, especially for large offerings requiring significant capital commitments. UAE companies must have this agreement in place before beginning investor roadshows, pricing discussions, or any formal marketing activities. It's particularly important when dealing with international underwriters or cross-border offerings.

• Firm Commitment Underwriting: Most common in UAE IPOs where investment banks guarantee to buy all securities and assume full market risk
• Best Efforts Agreement: Used for smaller or riskier offerings where underwriters commit to sell securities without guaranteeing full placement
• Standby Underwriting: Popular in rights issues where underwriters buy unsubscribed shares after existing shareholders' subscription period
• Syndicated Underwriting: Involves multiple UAE and international banks sharing risk, common for large offerings on ADX or DFM
• Mini-Maxi Agreement: Sets minimum subscription levels before the offering proceeds, protecting issuers from unsuccessful raises

• Issuing Companies: UAE businesses seeking to raise capital through public offerings, typically working with legal teams to negotiate terms
• Investment Banks: Act as lead underwriters, managing the distribution of securities and guaranteeing the offering's success
• Legal Counsel: Both issuer and underwriter attorneys draft and review agreements to ensure SCA compliance
• Securities and Commodities Authority: Reviews and approves agreements as part of the offering registration process
• Stock Exchanges: ADX or DFM officials ensure compliance with listing requirements and trading regulations
• Syndicate Members: Additional banks or financial institutions joining the underwriting consortium for larger offerings

• Company Information: Gather detailed issuer data, including financial statements, corporate structure, and regulatory filings
• Offering Details: Define security type, offering size, price range, and distribution methods
• Due Diligence: Complete comprehensive business, legal, and financial reviews before drafting begins
• Regulatory Compliance: Confirm SCA requirements and exchange listing rules for the specific offering type
• Risk Factors: Document all material business and market risks affecting the offering
• Lock-up Terms: Establish post-offering trading restrictions for major shareholders
• Marketing Plan: Detail roadshow schedules, investor presentations, and promotional materials

• Party Identification: Full legal names and addresses of issuer and all underwriters
• Securities Description: Detailed specifications of the securities being offered
• Purchase Commitment: Clear terms of underwriter obligations and pricing mechanisms
• Representations & Warranties: Issuer statements about business condition and legal compliance
• Conditions Precedent: Requirements for closing, including regulatory approvals
• Indemnification: Protection clauses for both issuer and underwriters
• Termination Rights: Specific circumstances allowing agreement cancellation
• UAE Governing Law: Explicit statement of UAE jurisdiction and applicable regulations

A Underwriting Agreement differs significantly from a Bond Issuance Agreement in several key aspects, though both play crucial roles in UAE capital markets. While underwriting agreements focus on the distribution and sale of securities through intermediaries, bond issuance agreements specifically govern the terms of debt securities.

• Primary Purpose: Underwriting agreements manage the relationship between issuers and investment banks distributing securities, while bond issuance agreements establish the terms between issuers and bondholders directly
• Risk Allocation: Underwriting agreements transfer market risk to underwriters, whereas bond issuance agreements keep the risk with the issuer
• Party Structure: Underwriting involves multiple financial intermediaries, while bond issuance typically involves just the issuer and trustee
• Timing: Underwriting agreements are temporary and transaction-specific, while bond issuance agreements remain active throughout the bond's life