Market Making Agreement

1. Market Making AgreementMARKET MAKING AGREEMENT FOR INITIAL PUBLIC ISSUE OFDATED [————————]
   

   AMONGST #

   (Issuer Company) AND ABC Private Limited (Market Maker)

   This Market Maker agreement, dated [———————-], is made and entered into between:

   ——————–, a company incorporated under the Companies Act, 1956, and having its registered office at [—————————————–] (hereinafter referred to as “——” or “Issue Company”) which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successor; and permitted assigns, of the FIRST PART;

   ABC PRIVATE LIMITED, a company incorporated under the Companies Act, 1956, and having its registered office at [—————————————————————————————————————————] and its corporate and administrative office at [———————————————————————————–] (hereinafter referred to as “APL” or “Lead Manager” and “Underwriter” and “Market Maker”) which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successor; and permitted assigns, of the SECOND PART; AND

   In this market making agreement, Issuer Company, Lead Manager & Market Maker are hereinafter collectively referred to as the “Parties” and individually as a “Party”.

   WHEREAS: The Issuer Company is proposing an Initial Public Issue of ————- Equity Shares of the Company (“Equity Shares”) having a face value of Rs. –/- each (the “Issue Shares”) in accordance with the Chapter IX of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time (hereinafter referred to as the “SEBI ICDR Regulations”) and applicable Indian securities laws at an Issue price (“Issue Price”) of Rs. —/- per share aggregating to Rs. —— Lakh (“Issue” or “Public Issue”).

   The shares to be issued for allotment in this issue comprise a net issue to the public of Equity Shares of face value of Rs.10/- each (the “Net Issue”) and a reserved portion for the Designated Market Maker of —- Equity shares of face value of Rs.–/- each (the “Market Maker Reservation Portion”), (collectively the “Offer”). The Net Issue to Public shall comprise Issue to Non-Retail Applicants and Retail Applicants.

   The Public issue shall be conducted through Fixed Price method/process, pursuant to which the shares are to be offered at the Issue price of Rs. —/- per share.

   The Issuer Company has obtained approval for the Issue pursuant to the Board resolution dated ——–. The Issuer Company passed a special resolution under section 62 (1) (C) at the EGM held on —————– which collectively authorized the Issuer Company’s Directors, or any other authorized representative, for the purpose of the Public Issue, to issue and sign the Draft Prospectus, the Prospectus, this Agreement, the Memorandums of understanding, any amendments or supplements thereto, and any and all other writings as may be legally and customarily required in pursuance of the Issue and to do all acts, deeds or things as may be required.

   The Issuer Company and the underwriters have entered into an underwriting agreement dated ————- pursuant to which APL (Lead Manager, Market Maker, and Underwriter) has agreed to ensure full subscription to the Market Maker portion of —– Equity Shares. APL (Lead Manager, Market Maker, and Underwriter) has agreed to ensure that in case of under-subscription, the entire unsubscribed portion of the Net Issue of ——– Equity shares shall be arranged for subscription from its resources as per the specified timelines in that agreement and in line with the requirements of the SEBI ICDR Regulations. 2018 and other applicable laws, regulations, and guidelines.

   Name of underwriter No of shares Underwritten

   One of the requirements of issuing shares to the Public in accordance with the Chapter IX of the SEBI ICDR Regulations, 2018, as specified in Regulation 261 of the said Regulations is to designate a Market Maker for the specified securities.

   This Market Maker Agreement outlines the terms and conditions under which the Market Maker, ABC Private Limited (APL), agrees to fulfill its role and responsibilities as the Market Maker for the proposed SME IPO of the Issuer Company.

   The Agreement details the obligations, rights, and liabilities of both the Issuer Company and the Market Maker, ensuring transparency and compliance with the SEBI regulations. It aims to facilitate the efficient and effective functioning of the IPO process, thereby enhancing liquidity and price discovery for the offered securities.

   Throughout this Market Making Agreement, both Parties are bound by the terms and conditions specified herein and shall act in good faith and with due diligence to ensure the success of the IPO and the overall benefit of all stakeholders involved.

   Signed and executed on this date [———————-], the Parties mutually acknowledge and accept the terms set forth in this Agreement.

   [Signatures of Authorized Representatives of Issuer Company and ABC Private Limited (Market Maker)]

2. Definitions: 1.1. Issuer Company: Refers to the company initiating the Initial Public Issue (IPO) seeking to raise capital from the public by issuing securities. 1.2. ABC Private Limited (APL): The designated market maker and lead manager for the SME IPO process.
3. Market Making Responsibilities: 2.1. Provision of Buy/Sell Quotes: APL agrees to provide two-way quotes for the securities of the issuer company during the IPO process. 2.2. Order Execution: APL is responsible for executing orders from buyers and ensuring smooth transactions during the IPO. 2.3. Enhancing Liquidity: APL will contribute to improving liquidity and price discovery for the securities of the issuer company.
4. Representations and Warranties: 3.1. APL represents that it is a registered stock exchange member and meets all eligibility criteria as a market maker for SME IPOs. 3.2. The issuer company represents that all information provided in the prospectus and related documents is accurate and complete.
5. Termination Conditions: 4.1. Termination by Mutual Consent: Either party may terminate this agreement with mutual consent in writing. 4.2. Breach of Agreement: If either party breaches any material provision of this agreement, the other party may terminate it.
6. Indemnity and Fees: 5.1. Indemnification: The issuer company agrees to indemnify and hold harmless APL from any losses or liabilities arising from misrepresentation or non-disclosure of material facts. 5.2. Market Maker Fee: APL will receive a market maker fee as agreed upon between the parties.
7. Governing Law and Dispute Resolution: 6.1. Governing Law: This agreement shall be governed by and construed in accordance with the laws of India. 6.2. Dispute Resolution: Any disputes arising out of this agreement shall be resolved through arbitration as per Indian arbitration laws.
8. Miscellaneous: 7.1. Time of the Essence: Time is of the essence in the performance of obligations under this agreement. 7.2. Amendment: Provisions of this agreement may be amended only with the mutual written consent of both parties. 7.3. Severability: If any provision of this agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

Frequently Asked Questions #