Underwriting agreements for offerings by EGCs include a representation by the company affirming its status as an EGC. A typical representation states: "From April 5, 2012 through the date of the underwriting agreement, the company has been and is an 'emerging growth company' as defined in Section 2(a) of the Securities Act." The date used as the starting point, April 5, 2012, is the date the JOBS Act was enacted. This representation affirms that the company and the other offering participants may rely on the JOBS Act accommodations that apply to offerings by an EGC. For an alternative formulation of this representation, see Practice Note, Underwriting Agreement Commentary: Implications of the JOBS Act.

The JOBS Act amended Section 5 of the Securities Act of 1933 (Securities Act) to add new subsection (d), which permits an EGC (and any person authorized to act on its behalf) to engage in oral or written communications with qualified institutional buyers (QIBs) and institutional accredited investors (IAIs) to gauge their interest in a proposed offering. These "test-the-waters" communications are permitted both before and after the date the EGC publicly files its registration statement with the SEC. Because new Section 5(d) excludes test-the-waters communications from the definition of "offer" under Section 5 (other than the requirement to deliver a final prospectus to investors under Section 5(b)(2)), the communications do not constitute gun-jumping as long as they are made in compliance with Section 5(d).

EGC underwriting agreements typically include representations and warranties setting out the parties' understanding of whether and how the parties have engaged in test-the-waters communications. These generally include one or more of the following statements that the company:

The question of which of these representations should be included depends on the test-the-waters activities actually undertaken by the company and the underwriters in the period leading up to the offering.

For a more detailed discussion of test-the-waters representations, including alternative formulations of those listed above, see Practice Note, Underwriting Agreement Commentary: Implications of the JOBS Act.

Though test-the-waters communications in connection with an offering by an EGC do not constitute gun-jumping, those communications (whether oral or written) are subject to potential anti-fraud liability under Section 12(a)(2) of the Securities Act (see Practice Note, Liability Provisions: Securities Offerings: Section 12(a)(2)).

In light of this risk, EGC underwriting agreements typically include a representation that, at the time of sale, no individual written test-the-waters communication, when considered together with the disclosure package, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein not misleading. Alternatively, or in addition, there may be a representation that the test-the-waters materials do not include any information that conflicts with the information in the registration statement or the disclosure package. If included, this representation may be worded similarly to the corresponding company representation regarding road show materials (see Practice Note, Underwriting Agreement Commentary: Company Representations and Warranties).

An EGC is permitted to confidentially submit its draft IPO registration statement, and any amendments, to the SEC for non-public review as long as the initial confidential submission and all related amendments are publicly filed at least 21 days before any road show. For a discussion of these requirements and the related filing mechanics, see Practice Note, Filing Documents with the SEC: How to Submit a Confidential Registration Statement (EGCs and FPIs).

To affirm compliance with this filing deadline, some EGC underwriting agreements include a representation that at least 21 days have elapsed between the date of the company's initial public filing of the registration statement with the SEC and the date of the commencement of the road show.

Under changes implemented by Section 105(a) of the JOBS Act, brokers and dealers are permitted to distribute research reports on an EGC at any time before, during or after any offering of the EGC's securities, including its IPO, without fear that their reports would constitute gun-jumping or any other violation of Section 5 of the Securities Act. In addition, related rulemaking has eliminated all NASD Rule 2711 research quiet periods:

Conforming changes were also made to NYSE Rule 472. For more information on these changes, see Practice Note, Research Analysts and Research Reports: Blackout on Research and Public Appearances in Connection with Offerings.

For underwriters to rely on these accommodations for EGC research reports, they must confirm that the issuer maintains its EGC status throughout the relevant period. Accordingly, EGC underwriting agreements typically include an undertaking by the company to promptly notify the underwriters if it ceases to be an EGC at any time prior to the later of the completion of:

An EGC underwriting agreement also typically includes covenants requiring the company to notify the underwriters promptly of: