LAW OF THE REPUBLIC OF ARMENIA

of June 21, 2008 No. ZR-96

About securitization of assets and asset-backed securities

(as amended on 24-05-2018)

Accepted by National Assembly of the Republic of Armenia on May 26, 2008

Chapter 1. General provisions

Article 1. Subject of regulation of the Law

This Law governs the relations connected with process of securitization of the assets and release, turnover and the securities redemption provided with assets.

Article 2. Legal regulation of securitization

1. The relations on securitization of assets are governed by the Laws of the Republic of Armenia "About the security market", "About investment fund", the Civil code of the Republic of Armenia, other laws and other legal acts adopted on their basis if other adjustment is not provided by this Law.

2. This Law does not limit the right of person to issue securities, provided with pledge of assets or otherwise, according to requirements and according to the procedure, established by the legislation of the Republic of Armenia.

3. The relations connected with legal status, creation, regulation of activities of funds of securitization, the activities termination, bankruptcy, liquidation of funds of securitization, activities of managing funds of securitization, and also control of securitization process are regulated by the Laws of the Republic of Armenia "About investment fund", "About the security market", and in the cases and limits provided by them - regulatory legal acts of the Central bank.

Article 3. The basic concepts used in the Law

1. The basic concepts used in this Law:

assets - money from established by the Law of the Republic of Armenia "About financial accounting" and (or) requirements of the right to them, and (or) other financial assets which provide or can provide certain inflows (including security, debit debt) money from assets;

the securities provided with assets - the securities issued by fund of securitization according to this Law which price or the income received on which depend on acquired assets or the undertaken risks;

asset-backed securities (group of assets) - set of the assets providing release of these asset-backed securities;

credit appeal - the stipulated in Clause 31 this Law of means which purpose is increase in liquidity of asset-backed securities, and also probability of accomplishment of obligations to owners of these securities;

the investor - person who owns the securities provided with assets or which intends to acquire the securities provided with assets;

the authorized person of the investor - person designated by the Central bank of the Republic of Armenia (further - the Central bank) who in the cases established by this Law manages the assets which are utility;

the initiator - the initial creditor of assets who outright or indirectly sells assets to fund of securitization;

the certificate on participation - the personalized investment not issued securities which do not have the right to vote which grant to the owners the right to shares in income gained from this group of assets, in the other expected payments, and also in means from realization from these assets;

securitization - the transaction or process according to which the fund of securitization acquires assets or undertakes the related risks and issues securities which price or the income received on which depend on acquired assets or the assumed risks;

capture on risk - capture on the credit risk connected with asset, way of provision of a guarantee or the derivative tool or other means, admissible the law;

the seller - person who sells to Fund securitizations the assets acquired at various initiators. The initiator or bank, credit institution, investment firm can be the seller.

serving - the bank or credit institution, or other commercial organization conforming to the requirements established by this Law which performs collection and accounting of payments for part of assets, their their transfer to Fund of securitization or provides other services connected with assets which are not the powers delegated by this Law to Fund's Board of Directors of securitization or and to keepers;

fund of securitization - investment fund which acquires assets or the related risks for the purpose of securitization.

The initiator or the seller can act as serving also.

Can enter process of servicing:

1) main or main serving which is responsible for all group of assets and to which different subservices are accountable;

2) the subservice responsible for part of the assets included in group of assets and which is accountable to the main thing serving;

3) replacing serving which undertakes the obligations following from the service agreement signed with Fund of securitization in case of the termination of the contract about servicing concluded with the main thing serving services or the last does not fulfill contractual commitments.

2. Other concepts established by this Law are applied in the value determined by the Civil code of the Republic of Armenia, the Law of the Republic of Armenia "About investment funds" and the Law of the Republic of Armenia "About the security market".