REGULATION ON SALE OF THE STATE SHARES THROUGH THE STOCK EXCHANGE OF MOLDOVA. I. General Provisions

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1 Approved by Government Resolution #910 of the Republic of Moldova from July 11,2002 REGULATION ON SALE OF THE STATE SHARES THROUGH THE STOCK EXCHANGE OF MOLDOVA I. General Provisions 1.The Regulation on sale of the State shares through the Stock Exchange of Moldova (hereinafter referred to as Regulation) is drafted pursuant to the Law #627-XII from July 4, 1991 on Privatization and the Law # 1217 XIII from June 25, 1997 on Privatization Program for The Regulation stipulates the procedure of sale of the state owned shares, of organization and execution of special transactions at the Moldovan Stock Exchange. 3. State shares may be sold through the Moldovan Stock Exchange (hereinafter referred to as the Stock Exchange) at the price higher or lower than the selling price, being the process of circulation at the secondary market. The selling price of the state shares at the Stock Exchange is determined pursuant to the stipulations of the Regulation on the determination of the state shares selling prices on secondary market, approved by the Government. 4. Methods of auction selling of state shares thought the Stock Exchange: -Pursuant to written applications (in envelopes); -Presenting on an electronic screen and/or on brokers monitors; -Pursuant to limit-orders (by means of including into computer-based system limitorders for sale pursuant to the Rules of the Stock Exchange). II. Organization and offering shares for sale 5. An auction commission, approved by an order of the Department of Privatization, is created for organization of the sale of state shares through the Stock Exchange. 6. In each case, when the state shares are put up for sale through the Stock Exchange the Department of Privatization, on the basis of the decision of the auction commission, issues an order through which an informational note is approved. 7. Ultimate implementation of the order and design of all necessary documents is carried out by the Department of Privatization which may use the services of the broker companies, selected pursuant to the procedure (hereinafter referred to as brokers-sellers), and the State Company Informational and Record Keeping Center (hereinafter referred to as the executors) 8. Pursuant to the legislation and present Regulation the executors: a) ask for an extract from the Record on security owners; b) before offering the stocks for sale, ask for the financial report for the last quarter;

2 c) if necessary they execute an application on temporary registration of joint stock companies at the Stock Exchange indicating the security character and circulation conditions. Pursuant to the application on temporary registration the Stock Exchange include the state shares into quotation list in a separate category for the entire period of their circulation without implementation the quotation procedure (listing) and without appropriate payment pursuant to the Regulation on the Stock Exchange. Temporary registration gives possibility to the Department of Privatization an exclusive right for sale of the state shares of a given joint stock company through the Stock Exchange. After this the company is excluded from the list of enterprises allowed to conclude transactions at the Stock Exchange, if they do not confirm their willingness to be recorded at the Stock Exchange; d) calculate the sale price of the state shares at the Stock Exchange; e) ensure the publication in press of informational notes regarding the offering of state shares through the Stock Exchange and of the auction results, perform the documents required for offering and selling of securities, undertake other actions stipulated by the present Regulation. 9. The list of joint stock companies, methods and offering terms for shares put up for sale, indicated in the informational notes, as a rule, can not be changed during the sales. III. Sale procedure and terms 10. An Informational Note regarding offering for sale of the state shares through the Stock Exchange is published in the national press not later than 10 days before the beginning of a sale. The copy of the Informational Note is submitted to the Stock Exchange and to brokers-sellers. The Stock Exchange introduces all the information in the computer system network of the basic data base from the Informational Note and provides publicity of this information through the whole period of shares sale. 11. The Informational Note includes the following data: -register number from the State Securities Record, name of the joint stock companies, their legal address, size of the statutory capital, nominal share price, fiscal code; -number of offered shares and form of sale: indivisible share packet (lot), divisible share packet (a number of lots), unique shares; -the state s share in the statutory capital and the share put up for sale (offer); -method of sale; -date of sale opening (first date of receiving applications for shares sale) and the date of the sale closing (expiration date of shares sale); -sale price of the state shares put up for sale through the Stock Exchange. Shares put up for sale through written applications will be sold separately from the shares put up through other mechanisms. Shares put up for sale through limit orders will be sold by means of quotation with limit orders for buy according to the Rules of the Stock Exchange.

3 12. The Informational Note may include any other information as well as special conditions for the sale of state shares, taking into consideration interests and the specific activity of each joint stock company. 13. Possible forms of share sale are defined by the Department of Privatization depending on concrete conditions of a given joint stock company and may be the following: -All shares are put up as indivisible share packet (indivisible lot) that may be purchased by one buyer; -Offered shares are divided into several share packets (several lots) of the same or different size that may be purchased by a number or, in case, by one buyer; -Offered shares are sold separately (unique shares). Each buyer may claim to any number of the offered shares to its own discretion. The shares may be sold through any of the mentioned above forms stipulated by the present regulation. 14. The term of share sale should not exceed 30 working days starting with the date of publication of the Informational Note. 15. The form of application for share purchase is approved by the Stock Exchange jointly with the Department of Privatization. 16. The Stock Exchange provides collection of the applications for state share purchase apart from other shares sold through the Stock Exchange. For collection of applications, submitted at the Stock Exchange, the brokers-sellers are on duty every day, with the exception of days off and holidays, starting with the day of opening and till the date of sale term expiration. 17.In case of the share sale: a) pursuant to written applications: -The applications are submitted to the Stock Exchange in a sealed envelope. The envelopes are registered in a general Record-keeping book for all brokers-sellers. Brokers on duty make sure the envelope is not opened, write on it the number and date of registration and certify it by putting a stamp or any other stamp; -After the registration in the Record-keeping book, the applicants place the envelopes in a box,sealed and stamped by the Department of Privatization, National Commission on Security Market and the Stock Exchange; -Applications are submitted by applicants who may be brokers, as well as the buyers. In case the application, submitted by a buyer, is satisfied, the registration of the transaction is made by a broker-seller who is in charge to sell the shares of the given joint stock company; b) Putting on the electronic screen and/or brokers monitors; -applications for purchase of a buyer may be submitted through any broker, accredited at the Stock Exchange. The buyer submit the application to the broker, who concludes with the buyer a contract order on securities purchase pursuant to the Legislation in force and to the present Regulation. -not later than the second working day (except the last day of applications receiving in this case, in the same day) the broker, who concluded a contract order on securities purchase, should pay down payment stipulated by the present Regulation and should include the application in the computer date base of the Stock Exchange for further display on electronic screen;

4 -the registered application can not be abrogated, but can be changed by the broker by increasing the proposed price and, consequently, increasing the number of bid shares, taking into consideration the sum of the paid down payment. If the broker brakes this stipulation and abrogates the application included in the network, then the down payment is not returned. -the Stock Exchange informs all the brokers regarding the data from the applications, included in the computer data base, through the electronic screen and/or brokers monitors. Also it informs the Department of Privatization in written form about the applications included in the network and about the cases of their abrogation by the brokers; -if, in order to implement the stipulations of the present Regulation, is necessary to make considerable changes in the computer data base of the Stock Exchange, then the changes are made pursuant to the agreement with the National Commission on Securities Market; c) on limit-orders -within seven days from Informational Note publication the Department of Privatization concludes with brokers-sellers, pursuant to the legislation in force, contracts on sale of shares at the sale price set by the auction commission pursuant to the Regulation on determination the selling prices for state shares at the secondary market; -giving out of limit-orders and their implementation is carried out pursuant to the Rules of the Stock Exchange. 18. During the sale period the applicants may submit not limited number of applications for share purchase of one or several joint stock companies with a condition that each offer has one lot or a specific number of separate shares and is registered through separate application (envelope). 19. For each application of purchase submitted in envelope and put on the electronic screen and/or brokers monitors the applicant makes a down payment in the amount of 2 percent of the selling price of the requested shares. The down payment is transferred pursuant to the provisions of the Law on state budget for the current year at most at the close of sales. In case of a sale of shares by putting on the electronic screen and/or brokers monitors the brokers should pay the mentioned above down payment before registering the application in the computer data base of the Stock Exchange. Including an application in the computer date base without down payment or payment at a sum lower than stipulated by the present Regulation, or at increasing the number of requested shares which exceed the down payment will lead to following consequences: -The Department of Privatization has the right to take financial measures against these brokers, pursuant to the legislation in force; -The National Commission on Security Markets has the right to make decisions regarding the abrogation or suspension of the broker license; -The given applications will not be examined. 20. The document on down payment indicates the amount paid, the date of sale opening and the closing date of sale. Making a single down payment for several bids is not allowed. In case a down payment is made for several bids, these bids are not considered. The copy of the document on down payment, certified with a stamp of a bank institution:

5 -is put into the envelope with the bid, in case the shares are sold pursuant to written applications; -is submitted to the Stock Exchange together with other documents envisioned by this Regulation not later than the last day of the sale and then the Stock Exchange further submits them to the Department of Privatization, in case the shares are sold through putting on the electronic screen and/or brokers monitors. The data of the document on down payment (number and date of payment order) are introduced by the broker in the computer network together with the data on application. 21. In case of limit-order quotation for sale with orders for purchase all the payments are made through the Stock Exchange pursuant to the rules of the Stock Exchange. 22.In case the shares are sold through written applications: -at the end of the last day of applications receiving the Record on envelope registration is closed and certified by the stamps of the Department of Privatization, National Commission on Security Markets and the Stock Exchange; -on the next working day after the expiration of the receiving term the representatives in charge from the Department of Privatization, National Commission on Security Markets and the Stock Exchange in presence of brokers-sellers: -Open the box with the envelopes and check the correspondence of its content with the Record-keeping book, completed by brokers-sellers; -Open the envelopes, whose number should be equal to those from the Recordkeeping book, and confirm by putting their signatures the presence in envelopes of applications and the documents of down payments. -The representatives of the Department of Privatization, National Commission on Security Markets and the Stock Exchange determine and verify the availability and the correctness of application and of the document on down payment in every envelope, as well as of requested shares. -The documents from opened envelopes are submitted to the broker-sellers, who introduce them in the computer network, modified by the Stock Exchange pursuant to this Regulation, in presence of the representatives from the Department of Privatization, National Commission and the Stock Exchange. If the sum of a down payment is less than the sum stipulated by the present Regulation, the given applications are introduced in the data base and then are included in the list of bids not allowed for examination. The application introduced in the network are examined by the auction commission only in the case when the Ministry of Finance confirms the payment before the expiration date stipulated for making the decision. 23. In case the shares are sold through putting on the electronic screen and/or brokers monitors: -on the closing day of application submission the representatives in charge from the Department of Privatization, National Commission on Security Markets and the Stock Exchange in presence of broker-sellers: -examine the information from electronic screen and/or from the Record of application registration within the computer data base of the Stock Exchange; -examine the documents, proving the down payment (payment order), presented by the representatives of the Stock Exchange; -find out the cases when the applications have been changed and determine the sum that should be paid, taking into consideration the down payment made.

6 -At the same time the Stock Exchange, in presence of representatives in charge, put down a report on information from the applications, included in the computer data base, which is then signed by all representatives, and submit it to the Department of Privatization. 24. The Stock Exchange presents the Department of Privatization, not later than the second working day after the sale, in written form or through computer means the Record of applications registration, envelopes with necessary documents, documents which prove the down payment, as well as the report on information included in the computer network from the applications, submitted in envelopes or within an auction, and the list of applications not allowed forexamination. 25. The reports on information, included in the computer network, are classified pursuant to the following criteria: -for each joint stock company and for each packet (lot) apart; -pursuant to the proposed sale price in diminishing order; -pursuant to registration numbers in the Record of application registration or in the computer network of the Stock Exchange. 26. In case the shares are sold on limit-orders, the Stock Exchange, within five working days since the sale closing, presents a report on transactions to the Department of Privatizatione. IV. Winner selection 27. The Department of Privatization examines the documents submitted by the Stock Exchange and verifies, if necessary, the number of envelopes pursuant to the Record, verifies the correspondence of the mentioned sum with the price of the bid shares and controls the figures of the down payment with those submitted by the Ministry of Finance. Applications on which the down payment is not paid or the paid sum is less than the sum stipulated by the present Regulation are not allowed for examination. 28. Applications, allowed for examination, are classified in separate groups pursuant to the following categories: -for each joint stock company and for each packet (plot) apart; -pursuant to the proposed sale price in descending or ascending order; -pursuant to registration numbers in the Record of application registration and/or in the computer network of the Stock Exchange. 29. Within 7 days from the day of receiving bids from the Stock Exchange, the Commission, selects the bidders-winners. The Commission decision is put down in the Minutes of the Commission, signed by all persons present at the sitting. 30. Following conditions are used for making the decision regarding winner selection: -sale price, indicated in the Informational Note; -market share price (if there is a marker quotation) submitted by the representative of the National Securities Commission ; -reduced sale price, calculated pursuant to the Regulation on setting up the sale prices of the state shares on the secondary securities market; -economic-financial situation of the joint stock company for the time being and further projection;

7 -bids, received by the Stock Exchange; -sale possibility of all shares of the given joint stock company put up for sale; -other conditions (pledge, the company assets sequester) 31. Applications may be satisfied, starting with the highest price and finishing, but not necessary, with reduced price, and not omitting any of the intermediate applications. If the price offered by more bidders coincides then the winner selection is taking into account the number of requested shares, as well as the date of bid submission pursuant to the registration numbers in the Record of application registration and in the computer network of the Stock Exchange If, the winner disclaims one of his bids offered for purchasing shares of the same joint stock company then the Commission could refuse all his previous bids offered for purchasing shares in that company. 32. After approval of auction outcomes, the Department of Privatization, pursuant to the Commission s decision, shortlists within 7 days the applicants whose purchase bids are satisfied and shortlists those applicants whose shares were not satisfied; both lists are approved by an order of the Department of Privatization. On the following day after approval, a copy of the decision is submitted to the Stock Exchange and brokers-sellers for registering the orders on sale and for concluding the transactions pursuant to the Rules of the Stock Exchange. 33. If some transactions are not concluded then the winners are chosen from the applications that were allowed for examination pursuant to the stipulations of the present Regulation, or the state shares will be put up for sale again pursuant to the existing legislation. V. Order of payment for shares and transaction registration. 34. The date of receiving the order, mentioned in the Article 31 of the present Regulation, from the Department of Privatization by the Stock Exchange and broker-sellers is considered the date of the sale acceptance. 35. During 7 working days from the date of sale acceptance the executors, register for each packet (plot) and for each packet of separate shares, sold to one applicant, orders on sale of shares through the Stock Exchange. In the same period the Stock Exchange submits to the brokers applications that are satisfied, extracts from the order of the Department of Privatization. 36. During the same 7 working days after the date of sale acceptance the brokersellers conclude contracts on purchase sale with the buyers (their representatives). After the contracts are concluded, but within 7 working days after the date of sale acceptance at most the brokers introduce in the computer data base of the Stock Exchange on behalf of the clients the orders on purchase-sale. The date when the order is introduced in the computer data base is considered the beginning of the sales. 37. All calculations for sold state shares, except down payment, is made pursuant to the requirements of the Stock Exchange Rules, and if necessary according to the National Depository Rules. In a period stipulated by the Stock Exchange Rules the buyers or their representatives transfer on the account of the Stock Exchange and National Depository the payment sum which consists of:

8 -cost of the purchased shares (except the down payment); -private tax; -commission to the Stock Exchange -commission to the National Depository, if necessary. Commission of the broker-seller and that of the State Enterprise Information and Records Keeping Center, indicated in the agreement with the Department of Privatization are transferred to the broker-seller account. The commission of the broker-buyer is paid directly pursuant to the agreements concluded with the buyers. Payment for registration services is paid directly by broker-buyer. 38. Paid sums are calculated by broker-seller and the Stock Exchange and are indicated in the documents on transaction registration. 39. If the applicant does not pay for shares in the period stipulated in the Stock Exchange Rules, then the Stock Exchange cancels the transaction subsequently informing within 3 working days the Department of Privatization which takes the decision on transaction cancellation pursuant to the Article 33 of the present Regulation. The documents accompanying these transactions and issued by the Department of Privatization to the brokers-sellers are considered invalid since the moment of expiration of the payment period and are to be returned to the Department of Privatization within five days. 40. The Department of Privatization, within 3 working days from the date of decision approval, submits to the Ministry of Finance the list of applicants whose bids were not satisfied. 41. Within 30 working days from the date of sale acceptance the Ministry of Finance restitutes the down payment to the applicants whose bids were not satisfied. 42. In cases described in the Articles 17(b), 33 and 39, the down payment is not returned. 43. Within 3 days from the date of payment received for sold shares of the given joint stock company the Stock Exchange submits a transfer order to an independent registrar pursuant to the stipulated procedure. 44. The independent registrar includes necessary changes in the Record of security shareholders and gives out extracts to the broker-seller and the Stock Exchange. The Stock Exchange transfers extracts from the Record to broker-buyers. 45. Within 3 working days after receiving the approval from the registrar about the fact of share registration on the name of a new shareholder the Stock Exchange transfers corresponding sums on the State budget accounts 46. Within 3 working days from the date of transferring the payment for shares to the state budget account, the Stock Exchange, or the broker-seller, if the transaction was carried out through the National Depositary, submits to the Department of Privatization a copy of payment documents which confirm the payment of both the price for the state shares and the private tax.

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