In a firm commitment agreement,the underwriter agrees to purchase all of the shares in the offering and then resells them to investors.

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In a firm commitment agreement, the underwriter takes on the risk of purchasing all of the shares in the offering and then reselling them to investors. This is different from a best efforts agreement, where the underwriter does not guarantee the purchase of all the shares and only agrees to use their best efforts to sell as many shares as possible.

In a Firm Commitment Agreement,the Underwriter Agrees to Purchase All