AGREEMENT TO UNDERWRITE DEBENTURE STOCK
THIS AGREEMENT made on the ……………..day of……………….BETWEEN XYZ
Ltd. (hereinafter called the company) of the one part and AB, etc (hereinafter called the underwriter)
of the other part.
WHEREAS the company is about to
offer for public subscription …………….4
p.c. mortgage debenture stock which to be constituted and secured by a trust
deed framed in accordance with the terms
of the draft which has already been prepared, and for the purpose of
identification subscribed by D., a
solicitor of the Supreme Court.
AND WHEREAS the company is desirous of insuring the said
debenture stock.
NOW THEREFORE IT IS HEREBY
AGREED as follows :
1. The company is to offer for public
subscription the said……….debenture
stock.
2. Such offer is to be made by a
prospectus framed in accordance with the terms of the draft prospectus annexed
hereto, but with full power for the company, prior to the publication of such
prospectus, to modify the same in such manner as the company shall think fit,
provided that such modification shall be approved by the said D.
3. The underwriter shall take up and pay
for at par the whole of the debenture stock aforesaid which shall not have been
taken up and allotted to other persons within ….. days after the first
publication of the said prospectus and in consideration of the obligation so
imposed on him he shall be entitled to ….. or to ….. p.c. of the premises on the said ….. stock
which shall be received by the company upon the issue of that portion which
shall be subscribed for and allotted to persons other than the said
underwriter.
4. The underwriter shall pay up the full
nominal value of the debenture stock taken up by him as aforesaid by the
instalments and at the times specified in the prospectus aforesaid, less,
however, the amount of the premium according to the terms of prospectus as
issued payable in respect thereof.
5. It shall rest with the underwriter to
fix the premium on which the said debenture stock shall be offered for
subscription by the said prospectus, and if he shall not within ….. (time)
after notice in writing from the company requiring him to specify the same
comply with such request, then it shall rest
with the company to fix the premium.
6. Any notice the underwriter may be given
by sending the same through the post addressed to him at his above mentioned
address, and a notice so sent shall be deemed to be served at the expiration of
twelve hours after it is posted.
IN
WITNESS WHEREOF, etc.,
(ii)
General.-In
business transactions brokers are appointed for various purposes and the
expenditure on payment of borkerge is deductible as revenue expenditure under the income-tax Act. [CIT v. Hoechst
Pharmaceuticals Ltd., (1978 113 ITR 877 (Bom)]
LETTER OF CONSENT FOR ACTING AS BROKERS
DATE…………….
Ref. No.
To
The
Board of Dddirctors,
ABC
Co. Ltd.,
…………………………..
Dear
Sirs,
Re:
Your public issue of 10% Secured Non-convertible Redeemable Bonds for the
aggregate value of Rs. 200 crores.
We,
the undersigned, hereby testify and consent to act as Brokers to the aforesaid
issue and to our name being inserted as
Brokers to the Issue in the Prospectus which the Company intends so issue in respect thereof and we authorise : the said Company to deliver this letter of consent
to the Registrar of Companies Act, 1956.
We are agreeable to accept brokerage at 1.5% on the nominal
value on allotment of Bonds made in
respect of application bearing our stamps as Brokers and we confirm that a copy
of this letter may be delivered to the
Registrar of Companies pursuant to the
provisions of section 76 (1) (v) of the
Companies Act, 1956.
Yours
faithfully,
Signature
DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT
PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE PREPARATION.
IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS
ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.
THE AUTHOR – CS
DEEPAK SETH (ASSOCIATE PARTNER HELPINGHANDS PROFESSIONALS LLP) AND CAN
BE REACHED AT CONTACTHHPRO@GMAIL.COM OR 9910248911.
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