LAW OF THE REPUBLIC OF KAZAKHSTAN

of February 20, 2006 No. 126-III ZRK

About project financing and securitization

This Law establishes the legal basis and conditions of project financing and securitization in the Republic of Kazakhstan, determines features of implementation of concession of rights to claim and legal regime of property in case of project financing and securitization, legal status of special finance company, and also the legal basis and conditions of syndicated financing.

Chapter 1. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) special finance company - the legal entity created according to this Law for implementation of transactions of project financing and securitization for benefit of which rights to claim are yielded;

2) own means of special finance company - assets, obligations, equity and income (expenses) gained (suffered) upon completion of transactions of project financing and securitization. Own means of special finance company do not join the allocated assets, bonds (including the added coupon on them) special finance company;

3) bonds of special finance company - bonds on which obligation fulfillment of the issuer is provided with the allocated assets;

4) the basic agreement - the written agreement according to which one party shall create and transfer to other party property or render services and (or) make goods and (or) perform works in the course of use of the created property;

4-1) agent bank - bank of the second level, Development bank of Kazakhstan;

5) the allocated assets - the rights to claim yielded to special finance company in transactions of project financing and securitization, the money on accounts in bank custodian received on the rights to claim yielded to it, the financial instruments acquired by special finance company as a result of investment of the specified money, the money received as a result of sale of financial instruments and also the property and property rights arising during creation of collateral security;

6) the debtor - person having the existing or future monetary commitment;

7) project financing - method of the organization of financing of the long-term project under concession of rights to claim which providing are the expected systematic money payments for creation and (or) cession of property, and (or) rendering services and (or) production of goods and (or) performance of works in the course of use of the created property;

8) the transaction of project financing - the actions of the customer, the contractor, special finance company, creditors and other persons directed to establishment of their rights and obligations within execution of the basic agreement and also acceptance and the obligation fulfillment provided with the allocated assets;

9) the managing director of investment portfolio - the professional participant of the security market rendering services to special finance company on investment of temporarily free receipts on the allocated assets based on license for activities on management of investment portfolio;

9-1) managing director of pledge - the legal entity acting on behalf and for the benefit of sozalogoderzhatel owing to the agreement of management of pledge signed between them the signing agreement of pledge on behalf of sozalogoderzhatel;

10) the creditor - the physical and (or) legal entity who is the bondholder or the legal entity performing crediting in case of project financing or person performing crediting in case of syndicated financing;

10-1) members of syndicate of creditors - banks of the second level, Development bank of Kazakhstan, international financial institutions;

10-2) borrower - the legal entity who is granted loan within syndicated financing;

11) collateral security - methods of ensuring obligation fulfillment of special finance company before creditors in warranty type, guarantees, pledge, and also the different ways provided by agreements;

12) originator - the legal entity performing concession of rights to claim in case of the conclusion of the transaction of securitization;

13) the contractor - the legal entity who according to the basic agreement creates and (or) gives property, and (or) renders services and (or) makes goods and (or) performs works in the course of use of the created property;

14) securitization - financing under concession of monetary claim by bond issue, provided with the allocated assets;

15) the transaction of securitization - acquisition of the rights to claim by special finance company and bond issue provided with the allocated assets;

15-1) syndicated financing - method of financing of the borrower by several creditors based on one agreement of syndicated loan;

16) rights to claim - the monetary claims existing at the time of the conclusion of the contract of assignment of rights to claim (the existing rights to claim) and also monetary claims which will arise in the future from the existing obligation or from future obligation (future rights to claim);

17) receipts on rights to claim - receipts in cash according to obligations of debtors, and also receipts from the persons using the property created according to the basic agreement, or acquiring goods, works, services in the course of use of the created property;

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