Agreement Among Underwriters

Contract between participating members of an investment banking Syndicate; sometimes called syndicate contract or purchase group agreement. It is distinguished from the underwriting agreement, which is signed by the company issuing the securities and the Syndicate Manager acting as agent for the underwriting group.

The agreement among underwriters, (1) appoints the originating investment banker as syndicate manager and agent; (2) appoints additional managers, if considered advisable; (3) defines the members' proportionate liability (usually limited to the amount of their participation) and agrees to pay each member's share on settlement date; (4) authorizes the manager to form and allocate units to a Selling Group, and agrees to abide by the rules of the selling group agreement; (5) states the life of the syndicate, usually running until 30 days after termination of the selling group, or ending earlier by mutual consent.

Contract between members of an Underwriting Group offering a new issue of securities by which rights and responsibilities are assigned. Also called a syndicate agreement. A Syndicate is a group of bankers who underwrite and distribute an offering of securities. The agreement designates the Managing Underwriter and additional participating underwriters; the Allotment or portion of the offering to be assigned each member; the life of the syndicate; and the method for offering the securities, that is, whether the underwriters agree to purchase the securities from the issuer or try to place them on a Best Effort basis. Ordinarily, the offering syndicate dissolves after the securities have been placed, usually within 60 days, or sometimes earlier if by mutual consent.