AGREEMENT ON MARKET MAKING
for shares/primary capital certificates issued by
[Company]
Whereas
………… (company registration number …, with registered office at …, hereinafter the (”Company”)
and
………… (company registration number …, with registered office at …, hereinafter the (”Broker”)
have on ………… (date) entered into this Agreement on Market Making for shares/primary capital certificates issued by the Company, it is hereby agreed as follows:
- Background
The background for this Agreement is that with effect from 4 October 2004, Oslo Børs introduced a new structure for classification of stock exchange listed companies based on the companies’ liquidity. This Agreement builds on a standard agreement produced by the Norwegian Securities Dealers Association using a template developed by Oslo Børs. The standard agreement has been submitted to Oslo Børs and is consistent with the requirements imposed by Oslo Børs for a firm to be approved as a liquidity provider, cf. Agreement to approve a stock exchange member firm as a liquidity provider.
- Purpose of this Agreement
It is the Parties’ intention that this Agreement shall promote liquidity in the shares or primary capital certificates that are the subject of this Agreement and reduce the spread between bid and offer prices in trading of the Company’s shares or equity certificates.
- Definitions
In this Agreement, ”Market Making”shall mean the activity of quoting binding bid and offer prices for a specified minimum number of round lots per transaction.
In this Agreement,”Binding bid and offer prices”shall mean the prices the Broker undertakes to quote for its own account or the account of third parties for the purchase or sale respectively of shares/equity certificates.
In this Agreement,”Spread” shall mean the percentage difference between the bid price and the offer price calculated on the basis of the offer price.
- Duties of the Broker
The Broker shall, on a daily basis, carry out Market Making in the shares/primary capital certificates that are the subject of this Agreement for at least 85% of the opening hours of Oslo Børs and Oslo Axess.
The Binding bid and offer prices quoted shall apply to a minimum value of NOK 40.000 on both the offer and the bid side
The Binding bid and offer prices quoted in accordance with this Agreement shall be quoted in the electronic trading system for Oslo Børs and Oslo Axess. The Owner Category for such orders shall be”Principal”, cf. Oslo Børs Member and Trading Rules G 2102.
The prices quoted by the Broker shall be valid for no longer than to the close of trading on Oslo Børs and Oslo Axess .
The largest spread shall not represent more than 4% unless the Broker is temporarily released from its duties, cf. Section 5 of this Agreement. If the price of the stock falls below NOK 1.00, the bid- and offer prices quoted by the member may have a maximum spread of NOK 0.10
- Temporary release from the Broker’s duties
The Broker can, under special circumstances and for a limited period, seek the agreement of Oslo Børs to be released from its duties. If the Broker is released temporarily from its duties, Oslo Børs shall be entitled to publicly disclose this through the Oslo Børs Company Information System.
The Broker may decide that it is temporarily released from its duties without receiving agreement from Oslo Børs if awaiting such agreement would cause material disadvantage or loss for the Broker. This would apply, for example, in the event of changes in legislation/legal regulations/regulatory provisions that directly or indirectly make it impossible, difficult or more expensive to fulfil the duties imposed by this Agreement. This also applies in the case of particularly volatile market conditions, matching halts or trading halts, or in the case of technical problems affecting the Broker or Oslo Børs. Furthermore, this shall also apply in a situation where there may be reasons to believe that there is information that is not commonly known in the market and which is likely to have a significant effect on the price of the shares or primary capital certificates.
The Broker shall, on its own initiative, immediately notify Oslo Børs if the Broker elects to be temporarily released from its duties pursuant to the second paragraph.
- Duties of the Company
The Company shall publicly disclose that it has entered into this Agreement by issuing a stock exchange announcement immediately after the Agreement is entered into. This shall also apply if this Agreement is terminated.
The Company shall, on its own initiative, immediately inform the Broker if it enters into a similar agreement on Market Making with another investment firm.
The Company shall ensure that the Broker receives all relevant company-related information material to its Market Making at the same time as such information is disclosed to the market. Information shall be distributed in the most appropriate manner possible in order that the market is attractive for all investors.
The company shall by separate agreement remunerate the Broker for carrying out Market Making in accordance with this Agreement. (Alternatively, text setting out the provisions for remuneration may be included).
- Publication
If the Company fails to publish a stock exchange announcement as required by Section 6 of this Agreement, Oslo Børs shall be entitled to publish the information on its own initiative.
If the Broker fails to carry out its duties pursuant to Section 4 of this Agreement, Oslo Børs shall be entitled to provide information in this respect to the Company.
The Broker shall be entitled at its own discretion to quote prices for distribution to the market through information systems other than those operated by Oslo Børs.
- Default and termination
The Company shall at all times be entitled to terminate this Agreement with immediate effect if the Broker is in material or repeated breach of any of its duties pursuant to this Agreement. This shall also apply if the Broker acts in breach of good business practice.
The Broker shall at all times be entitled to terminate this Agreement with immediate effect if the Company is in material or repeated breach of any of its duties pursuant to this Agreement. This shall also apply if the Company acts in breach of good business practice.
- Liability and limitation of liability
The Broker is liable to the Company for the performance of its duties pursuant to Section 4 of this Agreement.
The Broker shall not be liable for any errors or default committed by Oslo Børs.
Moreover, the Broker shall not be liable for any damage or loss caused by hindrances or other matters outside the Broker’s control, including without limitation failure of the electricity supply, faults or breakdowns in electronic data processing systems or telecommunications networks etc., fire, water damage, strikes, changes in legislation, instructions by the authorities or similar events.
- Changes to this Agreement
If either of the Parties believes that this Agreement is not being carried out in accordance with its intentions, or if changes in legislation, legal regulations or other regulatory provisions so require, the Parties shall seek to agree by negotiation the changes needed to the Agreement in order that the contractual relationship may continue.
Any changes or additions to this Agreement between the Company and the Broker must be made in writing and signed by both Parties. Any changes or additions shall be notified to Oslo Børs.
- Duration of this Agreement and termination provisions
This Agreement shall continue in force until it is terminated. The Agreement may not be terminated earlier than 6 months after it comes into force. The notice period for termination by either Party is 2 months.
- Dispute resolution
In the event of any dispute between the Parties on the interpretation or legal effects of this Agreement, the Parties shall strive to resolve the dispute through negotiation. If a dispute is not resolved by negotiation within one month after a Party requests such negotiations, the dispute shall be referred to arbitration.
- Governing law and venue for proceedings
This Agreement is governed by Norwegian law, and the Parties agree that ……….. shall be the (non-exclusive) venue for jurisdiction.
For the Company For the Broker
1/4