Write notes on the following: Underwriting and Brokerage Agreement.

Underwriting Agreements Underwriting is an insurance against risk. When shares or debentures of a company are issued to the public, they are, by and large, underwritten to ensure that all the shares or debentures issued are taken up and thus the required capital is raised. Before entering into an underwriting arrangement with a member of any recognised stock exchange, it is the duty of the directors of the concerned company to ensure that the underwriter has sufficient financial resources to meet any obligation which may devolve upon him in the event of the issue not being fully subscribed by public. Brokerage Agreements Brokerage Agreements are those agreements in which a party agree to accept certain percentage as brokerage from other party on happening or non-happening of an event. In these agreement, one party acts as the broker for the other party.