Instruction COSOB No. 24-04 of May 29, 2024 Fixing the Model of the Sponsorship Agreement by the Stock Exchange Promoter for Companies Seeking Admission to the Growth or Emergent Market

Instruction COSOB No. 24-04 of May 29, 2024 Fixing the Model of the Sponsorship Agreement by the Stock Exchange Promoter for Companies Whose Securities Are Subject to a Request for Admission to Trading on the Growth or Emergent Compartment

Article 1
In application of the provisions of Articles 49 and 53 of COSOB Regulation No. 23-04 of 10 Rabie Ethani 1445 corresponding to October 25, 2023, relating to the General Regulations of the Securities Stock Exchange, the purpose of this instruction is to fix the model of the sponsorship agreement by the stock exchange promoter for companies whose securities are subject to a request for admission to trading on the Growth or Emergent compartment.

Art. 2. – The model of the agreement sets out the minimum stipulations that must be contained in the agreement concluded between the company and the stock exchange promoter. In the event of a particular situation, certain clauses of the agreement may be modified, after the opinion of COSOB.

Art. 3. – The model of the agreement is annexed to this instruction.

Art. 4. – This instruction enters into force on the date of its signature, and repeals COSOB Instruction No. 13-02 of June 9, 2013, relating to the model of the agreement concluded between candidate companies for admission to the SME compartment and stock exchange promoters.

Made in Algiers, on June 3, 2024
Youcef BOUZENADA

MODEL OF SPONSORSHIP AGREEMENT – STOCK EXCHANGE PROMOTER (COSOB Regulation No. 23-04 of 10 Rabie Ethani 1445 corresponding to October 25, 2023, relating to the General Regulations of the Securities Stock Exchange)

The following agreement is concluded, in application of the provisions of Articles 49 and 53 of COSOB Regulation No. 23-04 of 10 Rabie Ethani 1445 corresponding to October 25, 2023, relating to the General Regulations of the Securities Stock Exchange.

Between the undersigned:
On the one hand, the Stock Exchange Promoter:
The company: …………………………………………………..........................................
Address …………………………………………...................................................................
Represented by Mr. .............................. Acting in the capacity of:......................................
Reference and date of registration in the capacity of stock exchange promoter......................................................

On the other hand, as the Company whose securities are subject to a request for admission to trading on the Growth or Emergent compartment (to be specified):
The company: …………………………………………………..........................................
Address …………………………………………...................................................................
Represented by Mr. ...........................…. Acting in the capacity of:......................................

Article 1. – Object of the Agreement:

1. This sponsorship agreement aims to define the rights and obligations of (specify the name of the stock exchange promoter) in its capacity as stock exchange promoter and of the company (…specify the name…), in the context of the process of introducing the company's securities (specify the nature of these securities) on the compartment (…specify the name of the compartment…) and after the introduction of the securities on the stock exchange.
2. The stock exchange promoter and the company undertake to respect the clauses of this agreement, COSOB Regulation No. 23-04 of 10 Rabie Ethani 1445 corresponding to October 25, 2023, relating to the General Regulations of the Securities Stock Exchange, as well as the operating rules of the market as defined by the instructions and decisions taken in application of the General Stock Exchange Regulations.

Art. 2. – Obligations of the Stock Exchange Promoter:
The stock exchange promoter undertakes to:

1. Advise the company on the stock exchange introduction process, including regulatory requirements towards COSOB, SGBV, and investors, as well as best practices in corporate governance and investor communication strategies.

2. Conduct the necessary due diligence to verify the financial, operational, legal, and regulatory information of the company. These due diligences must allow to:
   i. Identify and assess potential risks associated with the company, including financial, operational, legal, regulatory, and reputational risks.
   ii. Verify the accuracy of the information provided by the company in the context of the introduction process, such as financial statements, operational data, and legal documents;
   iii. Identify growth opportunities as well as potential weaknesses to be addressed before the introduction;
   iv. Verify that the Company meets the conditions for admission of securities to trading on the targeted compartment of the stock exchange;
   v. Ensure that the company is in compliance with all current legislation and regulations, notably stock exchange, social, tax, and environmental.
   vi. Protect investors by providing them with a solid basis for making investment decisions and contributing to maintaining the integrity and confidence of the stock market.

3. Assist the Company in preparing the necessary documentation for the introduction, notably the admission file and the information notice submitted to the visa of COSOB before its publication.

4. Coordinate activities between, on the one hand, the company and, on the other hand, lawyers, financial advisors, banks, and stock market intermediaries, professional investors, COSOB, SGBV, and the Central Securities Depository throughout the stock exchange introduction process. Specifically, the stock exchange promoter is responsible for:
   i. Collaborating with stock market intermediaries and financial advisors to develop an effective strategy for the success of the operation. This includes determining the calendar, the structure of the offer, the valuation of the company, and other key aspects of the process.
   ii. Coordinating with the stock market intermediary in charge of the introduction and financial advisors to produce the information notice, the prospectus, and the valuation report.
   iii. Coordinating between the company and COSOB for the deposit of the visa request, the follow-up of the request, and the obtaining of the visa, and with the central securities depository for the registration of securities.
   iv. Facilitating communication between the different stakeholders in the operation to reach a consensus on the valuation of the company and the offer price.
   v. Collaborating with stock market intermediaries, members of the placement syndicate, to develop an effective marketing strategy and to ensure an equitable distribution of shares on the market.

5. Assist the company in its relations with shareholders, notably in the preparation and conduct of shareholder meetings.

6. Assist the company in respecting its regulated, periodic, and permanent information obligations by ensuring smooth communication between, on the one hand, the company and, on the other hand, COSOB, SGBV, stock market intermediaries, and shareholders.

7. Respect confidentiality obligations, during and after the end of its relationship with the company, and protect sensitive and confidential information shared by the company, which is not necessary for the exercise of the stock exchange promoter's missions.

Art. 3. – Obligations of the Company:
The company undertakes to:

1. Provide the stock exchange promoter with all information, details, and documents needed to carry out its missions as described in this agreement.
2. Cooperate fully with the stock exchange promoter, respond promptly to requests for information, and actively participate in meetings and discussions.
3. Collaborate with the stock exchange promoter to prepare, revise, and approve all documents required for the stock exchange introduction, including the information notice, financial reports, and legal documents, before their submission to COSOB, SGBV, and the Central Securities Depository.
4. Implement appropriate corporate governance processes, including the appointment of a competent board of directors and the establishment of an audit committee.
5. Respect all applicable laws and regulations, including those relating to corporate governance, periodic and permanent information obligations, and tax obligations. The company undertakes to work with the stock exchange promoter to remedy any identified gaps.
6. Respect confidentiality obligations and protect sensitive and confidential information shared with the stock exchange promoter.
7. Not communicate and not designate a third party to communicate on behalf of the company for the performance of missions entrusted to the stock exchange promoter, without the latter's agreement.
8. Respect the recommendations provided by the stock exchange promoter regarding the publication of legal and regulatory information, the execution of decisions by COSOB and SGBV.
9. Respect financial commitments made towards the stock exchange promoter.

Art. 4. – Fees of the Stock Exchange Promoter
The fees are fixed as follows:

• Sponsorship fees for stock exchange introduction in the amount of………………DZD VAT included to be paid (define the terms);

• Annual sponsorship fees after stock exchange introduction in the amount of ……….DZD VAT included to be paid (define the terms).
  Fees are paid by (specify) check/transfer to the following bank account number: (indicate RIB references)

Art. 5. – Validity and Termination of the Agreement:

1. This Agreement is concluded for a duration of one (1) year, renewable, and may be terminated at any time by either party, after written notice of at least two months addressed to the other party, to COSOB, and to SGBV.
2. During this period, the responsibilities of both parties remain fully engaged.

Art. 6. – Dispute Resolution:
The stock exchange promoter and the company undertake to settle amicably any dispute that may arise during the execution of their respective missions under the clauses set by this agreement. In the event of impossibility of amicable settlement, both parties undertake to resort to the arbitration of COSOB before engaging legal proceedings.

Art. 7. – Final Provisions:
This agreement is drawn up in four original copies. Each of the two parties keeps one copy. One copy is transmitted to COSOB and SGBV.

Made at ............., on ......................
The Stock Exchange Promoter, represented by
Name and surname: ................................................ Function: .....................................................
Signature:
The Company, represented by Name and surname: ..................................... Function: ......................................
Signature: