Approved by the State Property Committee of the Republic of Uzbekistan of June 18, 1997

Regulations on procedure for placement and circulation of convertible securities

I. General provisions

1.1. This Provision according to the laws of the Republic of Uzbekistan "About joint-stock companies and protection of shareholder rights", "About the security market" and other regulatory legal acts regulates procedure for placement and the circulation of convertible securities.

1.2. In this Provision the following concepts are used:

convertible securities (further - KTsB) - preferred shares, corporate bonds which can be turned into common shares of the same issuer;

the owner of KTsB - legal entity or physical person which acquired KTsB also is her manager (not obligatory the owner);

repayment of convertible bonds - the redemption the issuer of own bonds at their owners, on all-in nominal value of bonds;

The agency - Agency on market development of the capital of the Republic of Uzbekistan and its territorial authorities;

the issuer - the legal entity issuing issued securities and incurring obligations on them to their owners.

II. Procedure for release of KTsB

2.1. Release and placement of KTsB:

* is alternative source of attraction of financial resources along with release of regular, inconvertible securities, bank loans, loans, etc.;

* gives the chance to gain bigger income (market price of KTsB is stabler, than the prices of common shares, in case of increase in stock prices KTsB price increases);

* allows to acquire voting power in case of the solution of questions of activities of the issuer of KTsB;

* allows to establish to creditors the lowered percent, reducing thereby costs for debt servicing;

* does KTsB more attractive in view of possibility of their exchange for other securities (in case of increase in profitability of the last).

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