i. underwriting agreements

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I. UNDERWRITING AGREEMENTS Indemnification and Contribution • Important to the underwriters because the underwriters undertake potential statutory liability for alleged or actual misstatements or omissions in the issuer’s disclosure document • Case law has put the validity of indemnification of the underwriters in doubt, citing public policy concerns • Law firms will only opine as to the due authorization, execution and delivery of the <strong>underwriting</strong> agreement and not as to its enforceability • Generally comprised of three elements • Indemnification by issuer (and any other sellers) for claims brought against underwriters by third parties (and related expenses) • Indemnification by underwriters for claims brought against issuer by third parties (and related expenses) • Contribution 8
I. UNDERWRITING AGREEMENTS Indemnification by Issuer and Other Sellers • Covered persons • Broadly defined to include underwriters and their affiliates, officers, directors, employees and controlling persons • Scope of coverage by issuer • Limited to liabilities (and expenses incurred) arising from misstatements or omissions from prospectus • Exception for misstatements or omissions in respect of information furnished by underwriters for inclusion in offering document • Scope of coverage by any other sellers (e.g., selling shareholders) • May be as broad as issuer’s indemnity (especially for parent or founder who is seller), but: • More often these days, limited to misstatements or omissions in respect of information in offering document relating specifically to seller • Obligation usually “several” vs. “joint and several” 9
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i. underwriting agreements

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