Document:

Exhibit 4.1

CLIFFORD                                                     CLIFFORD CHANCE LLP
CHANCE
                                                                  CONFORMED COPY

                               (1) BMB MUNAI, INC.

                   (2) BNY CORPORATE TRUSTEE SERVICES LIMITED
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                                   TRUST DEED
                                   RELATING TO
                    U.S.$60,000,000 5.0 PER CENT. CONVERTIBLE
                                 NOTES DUE 2012
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                                    CONTENTS

CLAUSE                                                                   PAGE

        1.  Definitions And Interpretation                                  1
        2.  Covenant To Repay                                               6
        3.  The Notes                                                       7
        4.  Covenant To Comply With Trust Deed And Schedules                8
        5.  Covenants By The Issuer                                         8
        6.  Amendments And Substitution                                    12
        7.  Enforcement                                                    15
        8.  Application Of Moneys                                          16
        9.  Terms Of Appointment                                           17
       10.  Costs And Expenses                                             23
       11.  Appointment And Retirement                                     26
       12.  Notices                                                        28
       13.  Law And Jurisdiction                                           28
       14.  Severability                                                   29
       15.  Contracts (Rights Of Third Parties) Act 1999                   30
       16.  Counterparts                                                   30

SCHEDULE 1 Form Of Note Certificate                                        31
            Part A          Terms And Conditions Of The Notes              37

SCHEDULE 2 Provisions For Meetings Of Noteholders                          38

THIS TRUST DEED is made on 13 July 2007

BETWEEN:

(1)     BMB MUNAI, INC. (the "Issuer"); and

(2)     BNY CORPORATE TRUSTEE SERVICES LIMITED (the "Trustee", which expression
        includes, where the context admits, all persons for the time being the
        trustee or trustees of this Trust Deed).

WHEREAS

(A)     The Issuer has authorised the creation and issue of U.S.$60,000,000 in
        aggregate principal amount of 5.0 per cent. Convertible Notes due 2012
        convertible into common shares, currently of U.S.$0.001 par value each,
        in the share capital of the Issuer (the "Shares") to be constituted in
        relation to this Trust Deed.

(B)     The Trustee has agreed to act as trustee of this Trust Deed on the
        following terms and conditions.

NOW THIS DEED WITNESSES AND IT IS HEREBY DECLARED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions

        In this Trust Deed the following expressions have the following
meanings:

        "Agents" means the Principal Paying and Conversion Agent, the other
        Paying and Conversion Agents, the Registrar, the Transfer Agents, or any
        of them;

        "American Stock Exchange" means the American Stock Exchange LLC;

        "Authorised Signatory" means any director notified to the Trustee by any
        director as being an Authorised Signatory pursuant to Clause 5.17
        (Authorised Signatories);

        "Conditions" means the terms and conditions to be endorsed on the Note
        Certificates, in the form or substantially in the form set out in Part B
        of Schedule 1 and any reference in this Trust Deed to a particular
        numbered Condition shall be construed in relation to the Notes
        accordingly;

        "Event of Default" means any one of the circumstances described in
        Condition 11;

        "Extraordinary Resolution" has the meaning set out in Schedule 2;

        "Liabilities" means any loss, damage, cost, charge, claim, demand,
        expense, judgment, action, proceeding or other liability whatsoever
        (including, without limitation, in respect of taxes, duties, levies,
        imposts and other charges) and including any value added tax or similar
        tax charged or chargeable in respect thereof and legal fees and expenses
        on a full indemnity basis;

                                      -1-

        "Material Subsidiary" means any Subsidiary of the Issuer:

        (a)     whose total assets at the time of at least one of the three most
                recently published consolidated audited financial statements of
                the Issuer represent at least 10 per cent, of the consolidated
                total assets of the Issuer; or

        (b)     whose revenues at the time of at least one of the three most
                recently published consolidated audited financial statements of
                the Issuer represent at least 10 per cent, of the consolidated
                total revenues of the Issuer,

        provided that in the case of a Subsidiary acquired or an entity which
        becomes a Subsidiary after the end of the financial period to which the
        then latest audited consolidated financial statements of the Issuer
        relate, the reference to the then latest audited consolidated financial
        statements for the purposes of the calculation above shall, until
        audited consolidated financial statements of the Issuer are published
        for the financial period in which the acquisition is made or, as the
        case may be, in which such entity becomes a Subsidiary, be deemed to be
        a reference to the then latest consolidated financial statements of the
        Issuer adjusted in such manner as the Issuer shall consider appropriate
        to consolidate the latest audited accounts of such Subsidiary in such
        accounts; and a certificate signed by two directors of the Issuer that
        in their opinion a Subsidiary of the Issuer is or is not or was or was
        not at any time or throughout any specified period a Material Subsidiary
        shall, in the absence of manifest error, be conclusive and binding on
        all parties;

        "Note Certificate" means any Note Certificate representing a
        Noteholder's entire holding of Notes, in or substantially in the form
        set out in Schedule 1 and includes any replacement Note Certificate
        issued pursuant to Condition 40 (Replacement of Note Certificates);

        "Noteholder" and (in relation to a Note) "Holder" means a person in
        whose name a Note is registered in the register of Noteholders;

        "Notes" means the notes in the denomination of U.S.$100,000 in
        registered form, each comprising the U.S.$60,000,000 5.0 per cent.
        Convertible Notes due 2012 constituted in relation to this Trust Deed,
        to be represented by a Note Certificate or Note Certificates, and for
        the time being outstanding or, as the case may be, a specific number
        thereof;

        "outstanding" means, in relation to the Notes, all the Notes other than:

        (a)     those which have been redeemed in accordance with this Trust
                Deed;

        (b)     those in respect of which Conversion Rights have been exercised
                and the obligations of the Issuer in relation thereto duly
                performed;

        (c)     those in respect of which the date for redemption in accordance
                with the provisions of the Conditions has occurred and for which
                the redemption moneys (including all interest accrued thereon to
                the date for such redemption) have been duly paid to the Trustee
                or the Principal Paying and Conversion Agent in the manner

                                      -2-

                provided for in the Paying and Conversion Agency Agreement (and,
                where appropriate, notice to that effect has been given to the
                Noteholders in accordance with Condition 44(Notices)) and remain
                available for payment in accordance with the Conditions;

        (d)     those which have been purchased and surrendered for cancellation
                as provided in Condition 8(h) (Cancellation) and notice of the
                cancellation of which has been given to the Trustee;

        (e)     those which have become void under Condition 39 (Prescription);

        provided that for each of the following purposes, namely:

        (i)     the right to attend and vote at any meeting of Noteholders;

        (ii)    the determination of how many and which Notes are for the time
                being outstanding for the purposes of Clauses 7.1 (Legal
                Proceedings) and 6.1 (Waiver), Condition 6(a) (Negative Pledge),
                Condition 8(b) (Redemption at the option of the Noteholders),
                Condition 8(d) (Redemption at the option of the Issuer),
                Condition 8(e) (Redemption at the option of Noteholders
                following a change of control), Condition 11 (Events of
                Defaults), Conditions 42 (Meetings of Noteholders; Modification
                and Waiver) and Condition 43 (Enforcement) and Schedule 2 of
                this Trust Deed; and

        (iii)   any discretion, power or authority, whether contained in this
                Trust Deed or provided by law, which the Trustee is required to
                exercise in or by reference to the interests of the Noteholders
                or any of them;

        those Notes (if any) which are for the time being held by any person
        (including but not limited to the Issuer or any Subsidiary) for the
        benefit of the Issuer or any Subsidiary shall (unless and until ceasing
        to be so held) be deemed not to remain outstanding;

        "Paying and Conversion Agency Agreement" means the agreement appointing
        the initial Agents and any other agreement for the time being in force
        appointing Successor agents, together with any agreement for the time
        being in force amending or modifying with the prior written approval of
        the Trustee any of the aforesaid agreements;

        "Paying and Conversion Agents" means the several institutions
        (including, where the context permits, the Principal Paying and
        Conversion Agent) at their respective Specified Offices initially
        appointed pursuant to the Paying and Conversion Agency Agreement and/or,
        if applicable, any Successor paying and Conversion agents, at their
        respective Specified Offices;

        "Potential Event of Default" means an event or circumstance which could,
        with the giving of notice, lapse of time, the issuing of a certificate
        and/or fulfilment of any other requirement provided for in Condition 11
        (Events of Default) become an Event of Default;

                                      -3-

        "Principal Paying and Conversion Agent" means the institution at its
        Specified Office initially appointed as principal paying and conversion
        agent pursuant to the Paying and Conversion Agency Agreement or, if
        applicable, any Successor principal paying and conversion agent at its
        Specified Office;

        "Register" means the register maintained by the Registrar at its
        Specified Office;

        "Registrar" means the institution at its Specified Office initially
        appointed as registrar pursuant to the Paying and Conversion Agency
        Agreement or, if applicable, any Successor registrar at its Specified
        Office;

        "Repay" shall include "redeem" and vice versa and "repaid", "repayable",
        "repayment", "redeemed", "redeemable" and "redemption" shall be
        construed accordingly;

        "Securities Act" means the United States Securities Act of 1933, as
        amended;

        "Specified Office" means, in relation to any Agent, either the office
        identified with its name in the Conditions or any other office notified
        to any relevant parties pursuant to the Paying and Conversion Agency
        Agreement;

        "Successor" means, in relation to the Agents, such other or further
        person, as may from time to time be appointed pursuant to the Paying and
        Conversion Agency Agreement as an Agent;

        "this Trust Deed" means this Trust Deed and the Schedules (as from time
        to time modified in accordance with the provisions contained herein) and
        (unless the context requires otherwise) includes any deed or other
        document executed in accordance with the provisions hereof (as from time
        to time modified as aforesaid) and expressed to be supplemental hereto;

        "Transfer Agent" means the several institutions at their respective
        Specified Offices initially appointed pursuant to the Paying and
        Conversion Agency Agreement and/or, if applicable, any successor
        transfer agents at their respective Specified Offices;

        "Trustee Acts" means both the Trustee Act 1925 and the Trustee Act 2000
        of England and Wales; and

        "Written Resolution" means a resolution in writing signed by or on
        behalf of all Holders of Notes for the time being outstanding, whether
        contained in one document or several documents in the same form, each
        signed by or on behalf of one or more such Holders of the Notes.

1.2     Principles of interpretation

        In this Trust Deed references to:

        1.2.1   Statutory modification: a provision of any statute shall be
                deemed also to refer to any statutory modification or

                                      -4-

                re-enactment thereof or any statutory instrument, order or
                regulation made thereunder or under such modification or
                re-enactment;

        1.2.2   Additional amounts: principal and/or interest in respect of the
                Notes shall be deemed also to include references to any
                additional amounts which may be payable under Condition 10
                (Taxation);

        1.2.3   Tax: costs, charges or expenses shall include any value added
                tax or similar tax charged or chargeable in respect thereof;

        1.2.4   "U.S.$" and "United States dollars(s)" denote the lawful
                currency for the time being of the United States of America;

        1.2.5   Enforcement of rights: an action, remedy or method of judicial
                proceedings for the enforcement of rights of creditors shall
                include, in respect of any jurisdiction other than England,
                references to such action, remedy or method of judicial
                proceedings for the enforcement of rights of creditors available
                or appropriate in such jurisdictions as shall most nearly
                approximate thereto;

        1.2.6   Clauses and Schedules: a Schedule or a Clause or sub-clause,
                paragraph or sub-paragraph is, unless otherwise stated, to a
                schedule hereto or a clause or sub-clause, paragraph or
                sub-paragraph hereof respectively;

        1.2.7   Principal: principal shall, when applicable, include premium;

        1.2.8   Trust Corporation: a trust corporation denotes a corporation
                entitled by rules made under the Public Trustee Act 1906 to act
                as a custodian trustee or entitled pursuant to any other
                legislation applicable to a trustee in any jurisdiction other
                than England to act as trustee and carry on trust business under
                the laws of the country of its incorporation; and

        1.2.9   Gender: words denoting the masculine gender shall include the
                feminine gender also, words denoting individuals shall include
                companies, corporations and partnerships and words importing the
                singular number only shall include the plural and in each case
                vice versa.

1.3     The Conditions

        In this Trust Deed, unless the context requires or the same are
        otherwise defined, words and expressions defined in the Conditions and
        not otherwise defined herein shall have the same meaning in this Trust
        Deed.

1.4     Headings

        The headings and sub-headings are for ease of reference only and shall
        not affect the construction of this Trust Deed.

1.5     The Schedules

        The schedules are part of this Trust Deed and shall have effect
        accordingly.

                                      -5-

2.      COVENANT TO REPAY

2.1     Covenant to Repay

        The Issuer covenants with the Trustee that it will, as and when the
        Notes or any of them become due to be redeemed or any principal on the
        Notes or any of them becomes due to be repaid in accordance with the
        Conditions, unconditionally pay or procure to be paid to or to the order
        of the Trustee in United States dollars in New York City in same day
        freely transferable funds the principal amount of the Notes or any of
        them becoming due for redemption or repayment on that date and shall
        (subject to the provisions of the Conditions) until all such payments
        (both before and after judgment or other order) are duly made
        unconditionally pay or procure to be paid to or to the order of the
        Trustee as aforesaid on the dates provided for in the Conditions
        interest on the principal amount of the Notes or any of them outstanding
        from time to time as set out in the Conditions provided that:

        2.1.1   every payment of principal or interest in respect of the Notes
                or any of them made to the Principal Paying and Conversion Agent
                in the manner provided in the Paying and Conversion Agency
                Agreement shall satisfy, to the extent of such payment, the
                relevant covenant by the Issuer contained in this Clause except
                to the extent that there is default in the subsequent payment
                thereof to the Noteholders in accordance with the Conditions;

        2.1.2   if any payment of principal or interest in respect of the Notes
                or any of them is made after the due date, payment shall be
                deemed not to have been made until either the full amount is
                paid to the Noteholders or, if earlier, the seventh day after
                notice has been given to the Noteholders in accordance with the
                Conditions that the full amount has been received by the
                Principal Paying and Conversion Agent or the Trustee except, in
                the case of payment to the Principal Paying and Conversion
                Agent, to the extent that there is failure in the subsequent
                payment to the Noteholders under the Conditions; and

        2.1.3   in any case where payment of the whole or any part of the
                principal amount due in respect of any Note is improperly
                withheld or refused upon due presentation (if so provided for in
                the Conditions) of the Note Certificate, interest shall accrue
                on the whole or such part of such principal amount from the date
                of such withholding or refusal until the date either on which
                such principal amount due is paid to the Noteholders or, if
                earlier, the seventh day after which notice is given to the
                Noteholders in accordance with the Conditions that the full
                amount payable in respect of the said principal amount is
                available for collection by the Noteholders provided that on
                further due presentation thereof (if so provided for in the
                Conditions) such payment is in fact made.

        The Trustee will hold the benefit of this covenant and the covenant in
        Clause 4 (Covenant to comply with Trust Deed and Schedules) on trust for
        the Noteholders.

                                      -6-

2.2     Following an Event of Default At any time after any Event of Default or
        Potential Event of Default shall have occurred, the Trustee may:

        2.2.1   by notice in writing to the Issuer, the Principal Paying and
                Conversion Agent and the other Agents require the Principal
                Paying and Conversion Agent and the other Agents or any of them:

                (a)     to act thereafter, until otherwise instructed by the
                        Trustee, as Agents of the Trustee under the provisions
                        of this Trust Deed on the terms provided in the Paying
                        and Conversion Agency Agreement (with consequential
                        amendments as necessary and save that the Trustee's
                        liability under any provisions thereof for the
                        indemnification, remuneration and payment of
                        out-of-pocket expenses of the Agents shall be limited to
                        amounts for the time being held by the Trustee on the
                        trusts of this Trust Deed in relation to the Notes on
                        the terms of this Trust Deed and available to the
                        Trustee for such purpose) and thereafter to hold all
                        Note Certificates and all sums, documents and records
                        held by them in respect of Notes on behalf of the
                        Trustee; and/or

                (b)     to deliver up all Note Certificates and all sums,
                        documents and records held by them in respect of Notes
                        to the Trustee or as the Trustee shall direct in such
                        notice provided that such notice shall be deemed not to
                        apply to any document or record which the relevant Agent
                        is obliged not to release by any law or regulation; and

        2.2.2   by notice in writing to the Issuer require the Issuer to make
                all subsequent payments in respect of Notes to or to the order
                of the Trustee and with effect from the issue of any such notice
                until such notice is withdrawn, proviso 2.1.1 to Clause 2.1
                (Covenant to Repay) and (so far as it concerns payments by the
                Issuer) Clause 8.4 (Payment to Noteholders) shall cease to have
                effect.

3.      THE NOTES

3.1     The Note Certificates

        The Notes will be represented by Note Certificates in registered form in
        the denomination of U.S.$100,000.

        The Note Certificates will be printed in accordance with applicable
        legal requirements substantially in the form set out in Schedule 1. The
        Note Certificates will be endorsed with the Conditions.

3.2     Signature

        The Note Certificates will be signed manually or in facsimile by a duly
        authorised person designated by the Issuer and will be authenticated
        manually by or on behalf of the Principal Paying and Conversion Agent.
        The Issuer may use the facsimile signature of a person who at the date
        of this Trust Deed is such a duly authorised person even if at the time

                                      -7-

        of issue of any Note Certificates he no longer holds that office. Note
        Certificates so executed and authenticated will be binding and valid
        obligations of the Issuer.

3.3     Entitlement to treat Holder as owner

        The Issuer, the Trustee and any Paying and Conversion Agent may deem and
        treat the Holder of any Note Certificate as the absolute owner of such
        Note Certificate, free of any equity, set-off or counterclaim on the
        part of the Issuer against the original or any intermediate Holder of
        such Note Certificate (whether or not the Note represented by such Note
        Certificate shall be overdue and notwithstanding any notation of
        ownership or other writing thereon or any notice of previous loss or
        theft of such Note Certificate) for all purposes and, except as ordered
        by a court of competent jurisdiction or as required by applicable law,
        the Issuer, the Trustee and the Paying and Conversion Agents shall not
        be affected by any notice to the contrary. All payments made to any such
        Holder shall be valid and, to the extent of the sums so paid, effective
        to satisfy and discharge the liability for the moneys payable upon the
        Notes.

4.      COVENANT TO COMPLY WITH TRUST DEED AND SCHEDULES

        The Issuer covenants with the Trustee to comply with those provisions of
        this Trust Deed and the Conditions which are expressed to be binding on
        it and to perform and observe the same. The Notes are subject to the
        provisions contained in this Trust Deed, all of which shall be binding
        upon the Issuer and the Noteholders and all persons claiming through or
        under them respectively.

5.      COVENANTS BY THE ISSUER

        The Issuer hereby covenants with the Trustee that, so long as any of the
        Notes remain outstanding, it will:

5.1     Books of account

        At all times keep and procure that all its Subsidiaries keep such books
        of account as may be necessary to comply with all applicable laws and so
        as to enable the financial statements of the Issuer to be prepared and
        allow the Trustee and any person appointed by it free access to the same
        at all reasonable times and to discuss the same with responsible
        officers of the Issuer;

5.2     Event of Default

        Give notice in writing to the Trustee forthwith upon becoming aware of
        any Event of Default or Potential Event of Default and without waiting
        for the Trustee to take any further action;

5.3     Certificate of Compliance

        Provide to the Trustee within 10 days of any request by the Trustee and
        at the time of the despatch to the Trustee of the Issuer's Annual Report
        on Form 10-K filed by the Issuer pursuant to the United States
        Securities Exchange act of 1934, as amended (the "Exchange Act"), and in
        any event not later than 180 days after the end of its financial year, a
        certificate, signed by two directors of the Issuer certifying that up to
        a specified date not earlier than seven days prior to the date of such
        certificate (the "Certified Date") the Issuer has complied with its
        obligations under this Trust Deed (or, if such is not the case, giving

                                      -8-

        details of the circumstances of such non-compliance) and that as at such
        date there did not exist nor had there existed at any time prior thereto
        since the Certified Date in respect of the previous such certificate
        (or, in the case of the first such certificate, since the date of this
        Trust Deed) any Event of Default or Potential Event of Default or other
        matter which would affect the Issuer's ability to perform its
        obligations under this Trust Deed or (if such is not the case)
        specifying the same;

5.4     Accounts in relation to Material Subsidiaries

        Ensure that such accounts are prepared as may be necessary to determine
        which subsidiaries are Material Subsidiaries and procure that two
        directors of the Issuer prepare and deliver to the Trustee at the time
        of issue of every audited consolidated balance sheet of the Issuer and
        at any other time upon the request of the Trustee a certificate or
        report specifying the Material Subsidiaries at the date of such balance
        sheet or request;

5.5     Certificate relating to Material Subsidiaries

        Give to the Trustee, as soon as reasonably practicable after the
        acquisition or disposal of any company which thereby becomes or ceases
        to be a Material Subsidiary or after any transfer is made to any
        Subsidiary which thereby becomes a Material Subsidiary, a certificate by
        two directors to such effect;

5.6     Financial statements

        Produce and send to the Trustee and to the Principal Paying and
        Conversion Agent as soon as practicable after their date of publication
        and in the case of annual financial statements in any event not more
        than 180 days after the end of each financial year, two copies of the
        Issuer's annual report on Form 10-K filed by the Issuer pursuant to the
        Exchange Act and of each of the Issuer's quarterly reports on Form 10-Q
        filed by the Issuer pursuant to the Exchange Act, or other notice,
        statement or circular issued (or which under any legal or contractual
        obligation should be issued) to the members or Holders of debentures or
        creditors (or any class of them) of the Issuer in their capacity as such
        at the time of the actual (or legally or contractually required) issue
        or publication thereof and procure that the same are made available for
        inspection by Noteholders at the Specified Offices of the Agents as soon
        as practicable thereafter;

5.7     Information

        So far as permitted by applicable law, at all times give to the Trustee
        such information, opinions, certificates and other evidence as it shall
        require and in such form as it shall require (including, without
        limitation, the certificates called for by the Trustee pursuant to
        Clause 5.3 (Certificate of Compliance)) for the performance of its
        functions;

5.8     Notes held by Issuer

        Send to the Trustee forthwith upon being so requested in writing by the
        Trustee a certificate of the Issuer (signed on its behalf by two
        Authorised Signatories) setting out the total number of Notes which at
        the date of such certificate are held by or for the benefit of the
        Issuer or any Subsidiary;

                                      -9-

5.9     Execution of further Documents

        So far as permitted by applicable law, at all times execute all such
        further documents and do all such further acts and things as may be
        necessary at any time or times in the opinion of the Trustee to give
        effect to the provisions of this Trust Deed;

5.10    Notices to Noteholders

        Send or procure to be sent to the Trustee not less than three days prior
        to the date of publication, for the Trustee's approval, one copy of each
        notice to be given to the Noteholders in accordance with the Conditions
        and not publish such notice without such approval and, upon publication,
        send to the Trustee two copies of such notice (such approval, unless so
        expressed, not to constitute approval of such notice for the purpose of
        Section 21 of the Financial Services and Markets Act 2000);

5.11    Notification of non-payment

        Use its best endeavours to procure that the Principal Paying and
        Conversion Agent notifies the Trustee forthwith in the event that it
        does not, on or before the due date for payment in respect of the Notes
        or any of them, receive unconditionally the full amount in the relevant
        currency of the moneys payable on such due date on all such Notes;

5.12    Notification of late payment

        In the event of the unconditional payment to the Principal Paying and
        Conversion Agent or the Trustee of any sum due in respect of the Notes
        or any of them being made after the due date for payment thereof,
        forthwith give notice to the Noteholders that such payment has been
        made;

5.13    Notification of redemption or repayment

        Not less than the number of days specified in the relevant Condition
        prior to the redemption or repayment date in respect of any Note, give
        to the Trustee notice in writing of the amount of such redemption or
        repayment pursuant to the Conditions and duly proceed to redeem or repay
        such Notes accordingly;

5.14    Tax or optional redemption

        If the Issuer gives notice to the Trustee that it intends to redeem the
        Notes pursuant to Condition 8(c) (Redemption for tax reasons) and
        Condition 8(d) (Redemption at the option of the Issuer) the Issuer
        shall, prior to giving such notice to the Noteholders, provide such
        information to the Trustee as the Trustee requires in order to satisfy
        itself of the matters referred to in such Condition;

5.15    Obligations of Agents

        Observe and comply with its obligations and use all reasonable
        endeavours to procure that the Agents observe and comply with all their
        obligations under the Paying and Conversion Agency Agreement and procure
        that the Registrar maintains the Register outside the United Kingdom at
        all times and notify the Trustee immediately it becomes aware of any
        material breach of such obligations, or failure by an Agent to comply
        with such obligations, in relation to the Notes;

                                      -10-

5.16    Change of taxing jurisdiction

        If the Issuer shall become subject generally to the taxing jurisdiction
        of any territory or any political sub-division thereof or any authority
        therein or thereof having power to tax other than or in addition to the
        United States of America or the Republic of Kazakhstan or any political
        subdivision thereof or any authority therein or thereof having power to
        tax, immediately upon becoming aware thereof it shall notify the Trustee
        of such event and (unless the Trustee otherwise agrees) enter forthwith
        into a trust deed supplemental hereto, giving to the Trustee an
        undertaking or covenant in form and manner satisfactory to the Trustee
        in terms corresponding to the terms of Condition 8(c) (Redemption for
        tax reasons) with the substitution for (or, as the case may be, the
        addition to) the references therein to the United States of America or
        the Republic of Kazakhstan of references to that other or additional
        territory to whose taxing jurisdiction, or that of a political
        subdivision thereof or an authority therein or thereof, the Issuer shall
        have become subject as aforesaid, such trust deed also to modify
        Condition 8(c) (Redemption for tax reasons) so that such Condition shall
        make reference to that other or additional territory;

5.17    Listing of shares

        (i) Within 30 days after the Issue Date, procure and at all times
        thereafter maintain an approval for listing of the Shares to be issued
        upon exercise of any Conversion Right on the American Stock Exchange in
        accordance with its rules; and (ii) upon issue of the Shares following
        exercise of any Conversion Right, immediately procure and maintain the
        listing of the relevant Shares on the American Stock Exchange in
        accordance with its rules;

5.18    Authorised Signatories

        Upon the execution hereof and thereafter forthwith upon any change of
        the same, deliver to the Trustee (with a copy to the Principal Paying
        and Conversion Agent) a list of the Authorised Signatories of the
        Issuer, together with certified specimen signatures of the same;

5.19    Payments

        Pay moneys payable by it to the Trustee hereunder without set off,
        counterclaim, deduction or withholding, unless otherwise compelled by
        law and in the event of any deduction or withholding compelled by law
        will pay such additional amount as will result in the payment to the
        Trustee of the amount which would otherwise have been payable by it to
        the Trustee hereunder;

5.20    Notice of the end of the Conversion Period

        On giving notice to redeem the Notes pursuant to Condition 8(d)
        (Redemption at the option of the Issuer) and six weeks prior to the
        final expiry of the Conversion Period (assuming no earlier redemption of
        the Notes) give notice to the Noteholders in accordance with the
        Conditions reminding the Noteholders of the Conversion Right then
        arising or current and stating the then current Conversion Price;

                                      -11-

5.21    Notice of Conversion Price adjustment

        As soon as practicable after the happening of any event as a result of
        which the Conversion Price will be adjusted pursuant to this Trust Deed
        and the Conditions, give notice to the Trustee and the Noteholders in
        accordance with the Conditions advising them of the date on which the
        relevant adjustment of the Conversion Price is likely to become
        effective and of the effect of exercising their Conversion Rights
        pending such date; and

5.22    Directors' Certificate

        Upon the happening of an event as a result of which the Conversion Price
        will be adjusted pursuant to this Trust Deed and the Conditions, as soon
        as reasonably practicable deliver to the Trustee a certificate signed by
        two Directors of the Issuer on behalf of the Issuer setting forth brief
        particulars of the event, and the adjusted Conversion Price and the date
        on which such adjustment takes effect and in any case setting forth such
        other particulars and information as the Trustee may reasonably require.

6.      AMENDMENTS AND SUBSTITUTION

6.1     Waiver

        The Trustee may, without any consent or sanction of the Noteholders and
        without prejudice to its rights in respect of any subsequent breach,
        condition, event or act, from time to time and at any time, but only if
        and in so far as in its opinion the interests of the Noteholders shall
        not be materially prejudiced thereby, authorise or waive, on such terms
        and conditions (if any) as shall seem expedient to it, any breach or
        proposed breach of any of the covenants or provisions contained in this
        Trust Deed or the Notes or determine that any Event of Default or
        Potential Event of Default shall not be treated as such for the purposes
        of this Trust Deed; any such authorisation, waiver or determination
        shall be binding on the Noteholders and, if, but only if, the Trustee
        shall so require, the Issuer shall cause such authorisation, waiver or
        determination to be notified to the Noteholders as soon as practicable
        thereafter in accordance with the Condition relating thereto; provided
        that the Trustee shall not exercise any powers conferred upon it by this
        Clause in contravention of any express direction by an Extraordinary
        Resolution or of a request in writing made by the Holders of more than
        50 per cent. in aggregate principal amount of the Notes then outstanding
        (but so that no such direction or request shall affect any
        authorisation, waiver or determination previously given or made) or so
        as to authorise or waive any such breach or proposed breach relating to
        any of the matters the subject of the Reserved Matters as specified and
        defined in Schedule 2.

6.2     Modifications

        The Trustee may from time to time and at any time without any consent or
        sanction of the Noteholders concur with the Issuer in making (a) any
        modification to this Trust Deed (other than in respect of Reserved
        Matters as specified and defined in Schedule 2 or any provision of this
        Trust Deed referred to in that specification) or the Notes which in the
        opinion of the Trustee it may be proper to make provided the Trustee is
        of the opinion that such modification will not be materially prejudicial

                                      -12-

        to the interests of the Noteholders or (b) any modification to this
        Trust Deed or the Notes if in the opinion of the Trustee such
        modification is of a formal, minor or technical nature or made to
        correct a manifest error. Any such modification shall be binding on the
        Noteholders and, unless the Trustee otherwise agrees, the Issuer shall
        cause such modification to be notified to the Noteholders as soon as
        practicable thereafter in accordance with the Conditions.

6.3     Substitution

        6.3.1   Procedure: The Trustee may, without the consent of the
                Noteholders, agree to the substitution, in place of the Issuer
                (or of any previous substitute under this Clause) of any
                Subsidiary of the Issuer (hereinafter called the "Substituted
                Obligor") as the principal debtor hereunder if:

                (a)     a trust deed is executed or some other written form of
                        undertaking is given by the Substituted Obligor to the
                        Trustee, in form and manner satisfactory to the Trustee,
                        agreeing to be bound by the terms of this Trust Deed and
                        the Notes with any consequential amendments which the
                        Trustee may deem appropriate, as fully as if the
                        Substituted Obligor had been named in this Trust Deed
                        and on the Notes as the principal debtor in place of the
                        Issuer (or of any previous substitute under this
                        Clause);

                (b)     the Issuer and the Substituted Obligor execute such
                        other deeds, documents and instruments (if any) as the
                        Trustee may require in order that the substitution is
                        fully effective and comply with such other requirements
                        as the Trustee may direct in the interests of the
                        Noteholders;

                (c)     an unconditional and irrevocable guarantee in form and
                        substance satisfactory to the Trustee shall have been
                        given by the Issuer of the obligations of the
                        Substituted Obligor under this Trust Deed and the Notes;

                (d)     the Trustee is satisfied that (i) the Substituted
                        Obligor has obtained all governmental and regulatory
                        approvals and consents necessary for its assumption of
                        liability as principal debtor in respect of the Notes in
                        place of the Issuer (or such previous substitute as
                        aforesaid), (ii) the Issuer has obtained all
                        governmental and regulatory approvals and consents
                        necessary for the guarantee to be fully effective as
                        referred to in sub-clause 6.3.1(c) and (iii) such
                        approvals and consents are at the time of substitution
                        in full force and effect;

                (e)     without prejudice to the generality of the preceding
                        sub-clauses 6.3.1(a) to (d) where the Substituted
                        Obligor is incorporated, domiciled or resident in or is
                        otherwise subject generally to the taxing jurisdiction
                        of any territory or any political sub-division thereof
                        or any authority of or in such territory having power to
                        tax (the "Substituted Territory") other than or in

                                      -13-

                        addition to the territory, the taxing jurisdiction of
                        which (or to any such authority of or in which) the
                        Issuer is subject generally (the "Issuer's Territory"),
                        the Substituted Obligor will (unless the Trustee
                        otherwise agrees) give to the Trustee an undertaking in
                        form and manner satisfactory to the Trustee in terms
                        corresponding to the terms of Condition 10 with the
                        substitution for the reference in that Condition to the
                        Issuer's Territory of references to the Substituted
                        Territory and in such event the Trust Deed and Notes
                        will be interpreted accordingly;

                (f)     without prejudice to the rights of reliance of the
                        Trustee under sub-clause 6.3.4 (Directors'
                        certification) the Trustee is satisfied that the said
                        substitution is not materially prejudicial to the
                        interests of the Noteholders;

        6.3.2   Change of law: In connection with any proposed substitution of
                the Issuer or any previous substitute, the Trustee may, in its
                absolute discretion and without the consent of the Noteholders
                agree to a change of the law from time to time governing the
                Notes and this Trust Deed provided that such change of law, in
                the opinion of the Trustee, would not be materially prejudicial
                to the interests of the Noteholders;

        6.3.3   Extra duties: The Trustee shall be entitled to refuse to approve
                any Substituted Obligor if, pursuant to the law of the country
                of incorporation of the Substituted Obligor, the assumption by
                the Substituted Obligor of its obligations hereunder imposes
                responsibilities on the Trustee over and above those which have
                been assumed under this Trust Deed;

        6.3.4   Directors' certification: If any two directors of the
                Substituted Obligor certify that immediately prior to the
                assumption of its obligations as Substituted Obligor under this
                Trust Deed the Substituted Obligor is solvent after taking
                account of all prospective and contingent liabilities resulting
                from its becoming the Substituted Obligor, the Trustee need not
                have regard to the financial condition, profits or prospects of
                the Substituted Obligor or compare the same with those of the
                Issuer (or of any previous substitute under this Clause);

        6.3.5   Interests of Noteholders: In connection with any proposed
                substitution, the Trustee shall not have regard to, or be in any
                way liable for, the consequences of such substitution for
                individual Noteholders resulting from their being for any
                purpose domiciled or resident in, or otherwise connected with,
                or subject to the jurisdiction of, any particular territory. No
                Noteholder shall, in connection with any such substitution, be
                entitled to claim from the Issuer any indemnification or payment
                in respect of any tax consequence of any such substitution upon
                individual Noteholders;

        6.3.6   Release of Issuer: Any such agreement by the Trustee pursuant to
                sub-clause 6.3.1 (Procedure) shall, if so expressed, operate to
                release the Issuer (or such previous substitute as aforesaid)

                                      -14-

                from any or all of its obligations as principal debtor under the
                Notes and this Trust Deed but without prejudice to its
                liabilities under any guarantee given pursuant to sub-clause
                6.3.1(c) (Guarantee by Issuer of obligations of Substituted
                Obligor). Not later than fourteen days after the execution of
                any such documents as aforesaid and after compliance with the
                said requirements of the Trustee, the Substituted Obligor shall
                cause notice thereof to be given to the Noteholders; and

        6.3.7   Completion of Substitution: Upon the execution of such documents
                and compliance with the said requirements, the Substituted
                Obligor shall be deemed to be named in this Trust Deed and the
                Notes as the principal debtor in place of the Issuer (or of any
                previous substitute under this Clause) and this Trust Deed, the
                Notes and the Paying and Conversion Agency Agreement shall
                thereupon be deemed to be amended in such manner as shall be
                necessary to give effect to the substitution and without
                prejudice to the generality of the foregoing any references in
                this Trust Deed, in the Notes or in the Paying and Conversion
                Agency Agreement to the Issuer shall be deemed to be references
                to the Substituted Obligor.

7.      ENFORCEMENT

7.1     Legal Proceedings

        The Trustee may at any time, at its discretion and without further
        notice, institute such proceedings against the Issuer as it may think
        fit to recover any amounts due in respect of the Notes which are unpaid
        or to enforce any of its rights under this Trust Deed or the Conditions
        but it shall not be bound to take any such proceedings unless (a) it
        shall have been so directed by an Extraordinary Resolution or so
        requested in writing by the Holders of more than one-quarter in
        principal amount of the outstanding Notes and (b) it shall have been
        indemnified and/or secured to its satisfaction against all liabilities,
        proceedings, claims and demands to which it may thereby become liable
        and all costs, charges and expenses which may be incurred by it in
        connection therewith and provided that the Trustee shall not be held
        liable for the consequence of taking any such action and may take such
        action without having regard to the effect of such action on individual
        Noteholders. Only the Trustee may enforce the provisions of the Notes or
        this Trust Deed and no Noteholder shall be entitled to proceed directly
        against the Issuer unless the Trustee, having become bound so to
        proceed, fails to do so within a reasonable time and such failure is
        continuing.

7.2     Evidence of Default

        If the Trustee (or any Noteholder where entitled under this Trust Deed
        so to do) makes any claim, institutes any legal proceeding or lodges any
        proof in a winding-up or insolvency of the Issuer under this Trust Deed
        or under the Notes, proof therein that. as regards any specified Note
        the Issuer has made default in paying any principal due in respect of
        such Note shall (unless the contrary be proved) be sufficient evidence
        that the Issuer has made the like default as regards all other Notes in
        respect of which a corresponding payment is then due and for the

                                      -15-

        purposes of the above a payment shall be a "corresponding" payment
        notwithstanding that it is due in respect of a Note of a different
        denomination from that in respect of the above specified Note.

8.      APPLICATION OF MONEYS

8.1     Application of Moneys

        All moneys received by the Trustee in respect of the Notes or amounts
        payable under this Trust Deed will despite any appropriation of all or
        part of them by the Issuer (including any moneys which represent
        principal or interest in respect of Notes which have become void under
        the Conditions) be held by the Trustee on trust to apply them (subject
        to Clause 8.2 (Investment of Moneys)):

        8.1.1   first, in payment or satisfaction of the costs, charges,
                expenses and liabilities incurred by the Trustee in the
                preparation and execution of the trusts of this Trust Deed
                (including remuneration of the Trustee);

        8.1.2   secondly, in or towards payment pari passu and rateably of all
                arrears of interest remaining unpaid in respect of the Notes and
                all principal moneys due on or in respect of the Notes; and

        8.1.3   thirdly, the balance (if any) in payment to the Issuer.

8.2     Investment of Moneys

        If the amount of the moneys at any time available for payment of
        principal and interest in respect of the Notes under Clause 8.1
        (Application of Moneys) shall be less than a sum sufficient to pay at
        least one-tenth of the principal amount of the Notes then outstanding,
        the Trustee may, at its discretion, invest such moneys upon some or one
        of the investments hereinafter authorised with power from time to time,
        with like discretion, to vary such investments; and such investment with
        the resulting income thereof may be accumulated until the accumulations
        together with any other funds for the time being under the control of
        the Trustee and available for the purpose shall amount to a sum
        sufficient to pay at least one-tenth of the principal amount of the
        Notes then outstanding and such accumulation and funds (after deduction
        of any taxes and any other deductibles applicable thereto) shall then be
        applied in the manner aforesaid.

8.3     Authorised Investments

        Any moneys which under this Trust Deed may be invested by the Trustee
        may be invested in the name or under the control of the Trustee in any
        of the investments for the time being authorised by English law for the
        investment by trustees of trust moneys or in any other investments,
        whether similar to those aforesaid or not, which may be selected by the
        Trustee or by placing the same on deposit in the name or under the
        control of the Trustee with such bank or other financial institution as
        the Trustee may think fit and in such currency as the Trustee in its

                                      -16-

        absolute discretion may determine and the Trustee may at any time vary
        or transfer any of such investments for or into other such investments
        or convert any moneys so deposited into any other currency and shall not
        be responsible for any Liability occasioned by reason of any such
        investments or such deposit whether by depreciation in value,
        fluctuation in exchange rates or otherwise.

8.4     Payment to Noteholders

        The Trustee shall give notice to the Noteholders in accordance with the
        Conditions of the date fixed for any payment under Clause 8.1
        (Application of Moneys). Any payment to be made in respect of the Notes
        by the Issuer or the Trustee may be made in the manner provided in the
        Conditions, the Paying and Conversion Agency Agreement and this Trust
        Deed and any payment so made shall be a good discharge to the extent of
        such payment, by the Issuer or the Trustee, as the case may be.

8.5     Production of Note Certificates

        The Trustee shall give notice to the Noteholders in accordance with the
        Conditions of the date fixed for any payment under Clause 8.1
        (Application of Moneys). Upon any payment under Clause 8.4 (Payment to
        Noteholders) of principal or interest, the Note Certificate representing
        the Note in respect of which such payment is made shall, if the Trustee
        so requires, be produced to the Trustee or the Paying and Conversion
        Agent by or through whom such payment is made and the Trustee shall, in
        the case of part payment, require the Registrar to make a notation in
        the register of the amount and date of payment thereon or, in the case
        of payment in full, shall cause such Note Certificate to be surrendered
        or shall cancel or procure the same to be cancelled and shall certify or
        procure the certification of such cancellation.

9.      TERMS OF APPOINTMENT

        By way of supplement to the Trustee Acts, it is expressly declared as
follows:

9.1     Reliance on Information

        9.1.1   Advice: The Trustee may in relation to this Trust Deed act on
                the opinion or advice of or a certificate or any information
                obtained from any lawyer, banker, valuer, surveyor, broker,
                auctioneer, accountant or other expert (whether obtained by the
                Trustee, the Issuer, any Subsidiary or any Agent) and which
                advice or opinion may be provided on such terms (including as to
                limitations on liability) as the Trustee may consider in its
                sole discretion to be consistent with prevailing market practice
                with regard to advice or opinions of that nature and shall not
                be responsible for any Liability occasioned by so acting; any
                such opinion, advice, certificate or information may be sent or
                obtained by letter, telegram, telex, cablegram or facsimile
                transmission and the Trustee shall not be liable for acting on
                any opinion, advice, certificate or information purporting to be
                so conveyed although the same shall contain some error or shall
                not be authentic;

        9.1.2   Certificate of directors or Authorised Signatories: the Trustee
                may call for and shall be at liberty to accept a certificate
                signed by two directors and/or two Authorised Signatories of the
                Issuer or other person duly authorised on its behalf as to any
                fact or matter prima facie within the knowledge of the Issuer as
                sufficient evidence thereof and a like certificate to the effect

                                      -17-

                that any particular dealing, transaction or step or thing is, in
                the opinion of the person so certifying, expedient as sufficient
                evidence that it is expedient and the Trustee shall not be bound
                in any such case to call for further evidence or be responsible
                for any Liability that may be occasioned by its failing so to
                do;

        9.1.3   Resolution or direction of Noteholders: the Trustee shall not be
                responsible for acting upon any resolution purporting to be a
                Written Resolution or to have been passed at any meeting of the
                Noteholders in respect whereof minutes have been made and signed
                or a direction of a specified percentage of Noteholders, even
                though it may subsequently be found that there was some defect
                in the constitution of the meeting or the passing of the
                resolution or the making of the directions or that for any
                reason the resolution purporting to be a Written Resolution or
                to have been passed at any Meeting or the making of the
                directions was not valid or binding upon the Noteholders;

        9.1.4   Noteholders as a class: whenever in this Trust Deed the Trustee
                is required in connection with any exercise of its powers,
                trusts, authorities or discretions to have regard to the
                interests of the Noteholders, it shall have regard to the
                interests of the Noteholders as a class and in particular, but
                without prejudice to the generality of the foregoing, shall not
                be obliged to have regard to the consequences of such exercise
                for any individual Noteholder resulting from his or its being
                for any purpose domiciled or resident in, or otherwise connected
                with, or subject to the jurisdiction of, any particular
                territory;

        9.1.5   Trustee not responsible for investigations: the Trustee shall
                not be responsible for, or for investigating any matter which is
                the subject of, any recital, statement, representation, warranty
                or covenant of any person contained in this Trust Deed, the
                Notes, or any other agreement or document relating to the
                transactions herein or therein contemplated or for the
                execution, legality, effectiveness, adequacy, genuineness,
                validity, enforceability or admissibility in evidence thereof;

        9.1.6   No obligation to monitor: the Trustee shall be under no
                obligation to monitor or supervise the functions of any other
                person under the Notes or any other agreement or document
                relating to the transactions herein or therein contemplated and
                shall be entitled, in the absence of actual knowledge of a
                breach of obligation, to assume that each such person is
                properly performing and complying with its obligations and the
                Trustee shall not be under any duty to monitor or make enquiries
                as to whether or not any event or circumstance which gives rise
                or may give rise to an adjustment to the Conversion Price has
                occurred or may occur and will not be responsible to Noteholders
                for any loss arising from any failure by it to do so;

        9.1.7   Notes held by the Issuer: in the absence of knowledge or express
                notice to the contrary, the Trustee may assume without enquiry
                (other than requesting a certificate of the Issuer under Clause

                                      -18-

                5.8 (Notes held by Issuer)), that no Notes are for the time
                being held by or for the benefit of the Issuer or its
                Subsidiaries;

        9.1.8   Entry on the Register: the Trustee shall not be liable to the
                Issuer or any Noteholder by reason of having accepted as valid
                or not having rejected any entry on the Register later found to
                be forged or not authentic and can assume for all purposes in
                relation hereto that any entry on the Register is correct;

        9.1.9   Events of Default: the Trustee shall not be bound to give notice
                to any person of the execution of this Trust Deed or to take any
                steps to ascertain whether any Event of Default or Potential
                Event of Default has happened and, until it shall have actual
                knowledge or express notice to the contrary, the Trustee shall
                be entitled to assume that no such Event of Default or Potential
                Event of Default has happened and that the Issuer is observing
                and performing all the obligations on its part contained in the
                Notes and under this Trust Deed and no event has happened as a
                consequence of which any of the Notes may become repayable.

        9.1.10  Right to Deduct or Withhold: notwithstanding anything contained
                in this Trust Deed, to the extent required by any applicable
                law, if the Trustee is or will be required to make any deduction
                or withholding from any distribution or payment made by it
                hereunder or if the Trustee is or will be otherwise charged to,
                or is or may become liable to, tax as a consequence of
                performing its duties hereunder whether as principal, agent or
                otherwise, and whether by reason of any assessment, prospective
                assessment or other imposition of liability to taxation of
                whatsoever nature and whensoever made upon the Trustee, and
                whether in connection with or arisings from any sums received or
                distributed by it or to which it may be entitled under this
                Trust Deed (other than in connection with its remuneration as
                provided for herein) or any investments or deposits from time to
                time representing the same, including any income or gains
                arising therefrom or any action of the Trustee in connection
                with the trusts of this Trust Deed (other than the remuneration
                herein specified) or otherwise, then the Trustee shall be
                entitled to make such deduction or withholding or, as the case
                may be, to retain out of sums received by it an amount
                sufficient to discharge any liability to tax which relates to
                sums so received or distributed or to discharge any such other
                liability of the Trustee to tax from the funds held by the
                Trustee upon the trusts of this Trust Deed.

        9.1.11  The Shares: The Trustee shall not any time be under any duty or
                responsibility in respect of the validity or value (or the kind
                or amount) of any Shares or of any other securities or cash,
                which may at any time be made available or delivered upon the
                exercise of any Conversion Right; and it makes no representation
                with respect thereto. The Trustee shall not be responsible for
                any failure of the Issuer to make available or deliver any
                Shares or to make any payment upon the exercise of any
                Conversion Right.

                                      -19-

        9.1.12  Exchange Offer: The Trustee shall not be responsible for any of
                the terms of the Exchange Offer or for the terms of the Exchange
                Indenture and the Exchange Notes (as each of such terms is
                defined in Condition 6(f) (Exchange Offer)).

9.2     Trustee's powers and duties

        9.2.1   Trustee's determination: The Trustee may determine whether or
                not a default in the performance or observance by the Issuer of
                any obligation under the provisions of this Trust Deed or
                contained in the Notes is capable of remedy and if the Trustee
                shall certify that any such default is, in its opinion, not
                capable of remedy, such certificate shall be conclusive and
                binding upon the Issuer and the Noteholders;

        9.2.2   Determination of questions: the Trustee as between itself and
                the Noteholders shall have full power to determine all questions
                and doubts arising in relation to any of the provisions of this
                Trust Deed and every such determination, whether made upon a
                question actually raised or implied in the acts or proceedings
                of the Trustee, shall be conclusive and shall bind the Trustee,
                and the Noteholders;

        9.2.3   Trustee's discretion: the Trustee shall (save as expressly
                otherwise provided herein) as regards all the trusts, powers,
                authorities and discretions vested in it by this Trust Deed or
                by operation of law, have absolute and uncontrolled discretion
                as to the exercise or non-exercise thereof and the Trustee shall
                not be responsible for any Liability that may result from the
                exercise or non-exercise thereof but whenever the Trustee is
                under the provisions of this Trust Deed bound to act at the
                request or direction of the Noteholders, the Trustee shall
                nevertheless not be so bound unless first indemnified and/or
                provided with security to its satisfaction against all actions,
                proceedings, claims and demands to which it may render itself
                liable and all costs, charges, damages, expenses and liabilities
                which it may incur by so doing. Without limiting the general
                statement above, the Trustee may refrain from taking any action
                in any jurisdiction if the taking of such action in that
                jurisdiction would, in its opinion based upon legal advice in
                the relevant jurisdiction, be contrary to any law of that
                jurisdiction or, to the extent applicable, of England.
                Furthermore, the Trustee may also refrain from taking such
                action if it would otherwise render it liable to any person in
                that jurisdiction or England or if, in its opinion based upon
                such legal advice, it would not have the power to do the
                relevant thing in that jurisdiction by virtue of any applicable
                law in that jurisdiction or in England or if it is determined by
                any court or other competent authority in that jurisdiction or
                in England that it does not have such power;

                                      -20-

        9.2.4   Trustee's consent: any consent given by the Trustee for the
                purposes of this Trust Deed may be given on such terms and
                subject to such conditions (if any) as the Trustee may require;

        9.2.5   Conversion of currency: where it is necessary or desirable for
                any purpose in connection with this Trust Deed to convert any
                sum from one currency to another it shall (unless otherwise
                provided by this Trust Deed or required by law) be converted at
                such rate or rates, in accordance with such method and as at
                such date for the determination of such rate of exchange, as may
                be specified by the Trustee in its absolute discretion as
                relevant and any rate, method and date so specified shall be
                binding on the Issuer and the Noteholders;

        9.2.6   Application of proceeds: the Trustee shall not be responsible
                for the receipt or application by the Issuer of the proceeds of
                the issue of the Notes or the delivery of any Note Certificate
                to the persons entitled to them;

        9.2.7   Error of judgment: The Trustee shall not be liable for any error
                of judgment made in good faith by any officer or employee of the
                Trustee assigned by the Trustee to administer its corporate
                trust matters;

        9.2.8   Agents. the Trustee may, in the conduct of the trusts of this
                Trust Deed instead of acting personally, employ and pay an agent
                on any terms, whether or not a lawyer or other professional
                person, to transact or conduct, or concur in transacting or
                conducting, any business and to do or concur in doing all acts
                required to be done by the Trustee (including the receipt and
                payment of money) and the Trustee shall not be responsible for
                any loss, liability, expense, demand, cost, claim or proceedings
                incurred by reason of the misconduct, omission or default on the
                part of any person appointed by it hereunder or be bound to
                supervise the proceedings or acts of any such person;

        9.2.9   Delegation: the Trustee may, in the execution and exercise of
                all or any of the trusts, powers, authorities and discretions
                vested in it by this Trust Deed, act by responsible officers or
                a responsible officer for the time being of the Trustee and the
                Trustee may also whenever it thinks fit, whether by power of
                attorney or otherwise, delegate to any person or persons or
                fluctuating body of persons (whether being a joint trustee of
                this Trust Deed or not) all or any of the trusts, powers,
                authorities and discretions vested in it by this Trust Deed and
                any such delegation may be made upon such terms and conditions
                and subject to such regulations (including power to sub-delegate
                with the consent of the Trustee) as the Trustee may think fit in
                the interests of the Noteholders and the Trustee shall not be
                bound to supervise the proceedings or acts of and shall not in
                any way or to any extent be responsible for any loss, liability,
                expense, demand, cost, claim or proceedings incurred by reason
                of the misconduct, omission or default on the part of such
                delegate or sub-delegate;

                                      -21-

        9.2.10  Custodians and nominees: the Trustee may appoint and pay any
                person to act as a custodian or nominee on any terms in relation
                to such assets of the trust as the Trustee may determine,
                including for the purpose of depositing with a custodian this
                Trust Deed or any document relating to the trust created
                hereunder and the Trustee shall not be responsible for any loss,
                liability, expense, demand, cost, claim or proceedings incurred
                by reason of the misconduct, omission or default on the part of
                any person appointed by it hereunder or be bound to supervise
                the proceedings or acts of any such person; the Trustee is not
                obliged to appoint a custodian if the Trustee invests in
                securities payable to bearer; and

        9.2.11  Confidential information: the Trustee shall not (unless required
                by law or ordered so to do by a court of competent jurisdiction)
                be required to disclose to any Noteholder confidential
                information or other information made available to the Trustee
                by the Issuer in connection with this Trust Deed and no
                Noteholder shall be entitled to take any action to obtain from
                the Trustee any such information.

9.3     Financial matters

        9.3.1   Professional charges: any trustee being a banker, lawyer, broker
                or other person engaged in any profession or business shall be
                entitled to charge and be paid all usual professional and other
                charges for business transacted and acts done by him or his
                partner or firm on matters arising in connection with the trusts
                of this Trust Deed and also his properly incurred charges in
                addition to disbursements for all other work and business done
                and all time spent by him or his partner or firm on matters
                arising in connection with this Trust Deed, including matters
                which might or should have been attended to in person by a
                trustee not being a banker, lawyer, broker or other professional
                person;

        9.3.2   Expenditure by the Trustee: nothing contained in this Trust Deed
                shall require the Trustee to expend or risk its own funds or
                otherwise incur any financial liability in the performance of
                its duties or the exercise of any right, power, authority or
                discretion hereunder if it has grounds for believing the
                repayment of such funds or adequate indemnity against, or
                security for, such risk or liability is not reasonably assured
                to it; and

        9.3.3   Trustee may enter into financial transactions with the Issuer:
                no Trustee and no director or officer of any corporation being a
                Trustee hereof shall by reason of the fiduciary position of such
                Trustee be in any way precluded from making any contracts or
                entering into any transactions in the ordinary course of
                business with the Issuer or any Subsidiary, or any person or
                body corporate directly or indirectly associated with the Issuer
                or any Subsidiary, or from accepting the trusteeship of any
                other debenture stock, debentures or securities of the Issuer or
                any Subsidiary or any person or body corporate directly or
                indirectly associated with the Issuer or any Subsidiary, and
                neither the Trustee nor any such director or officer shall be

                                      -22-

                accountable to the Noteholders or the Issuer or any Subsidiary,
                or any person or body corporate directly or indirectly
                associated with the Issuer or any Subsidiary, for any profit,
                fees, commissions, interest, discounts or share of brokerage
                earned, arising or resulting from any such contracts or
                transactions and the Trustee and any such director or officer
                shall also be at liberty to retain the same for its or his own
                benefit.

9.4     Disapplication

        Section 1 of the Trustee Act 2000 shall not apply to the duties of the
        Trustee in relation to the trusts constituted by this Trust Deed. Where
        there are any inconsistencies between the Trustee Acts and the
        provisions of this Trust Deed, the provisions of this Trust Deed shall,
        to the extent allowed by law, prevail and, in the case of any such
        inconsistency with the Trustee Act 2000, the provisions of this Trust
        Deed shall constitute a restriction or exclusion for the purposes of
        that Act.

9.5     Trustee Liability

        Subject to Section 192 of the Companies Act 1985 (if applicable) and
        notwithstanding anything to the contrary in this Trust Deed, the Notes
        or the Paying and Conversion Agency Agreement, the Trustee shall not be
        liable to any person for any matter or thing done or omitted in any way
        in connection with or in relation to this Trust Deed, the Notes or the
        Paying and Conversion Agency Agreement save in relation to its own
        negligence, wilful default or fraud.

10.     COSTS AND EXPENSES

10.1    Remuneration

        10.1.1  Normal Remuneration: The Issuer shall pay to the Trustee
                remuneration for its services as trustee as from the date of
                this Trust Deed, such remuneration to be at such rate as may
                from time to time be agreed between the Issuer and the Trustee.
                Such remuneration shall be payable in advance on the anniversary
                of the date hereof in each year and the first payment shall be
                made on the date hereof. Such remuneration shall accrue from day
                to day and be payable (in priority to payments to the
                Noteholders) up to and including the date when, all the Notes
                having become due for redemption, the redemption moneys and
                interest thereon to the date of redemption have been paid to the
                Principal Paying and Conversion Agent or the Trustee, provided
                that if upon due presentation (if required pursuant to the
                Conditions) of any Note Certificate or any cheque, payment of
                the moneys due in respect thereof is improperly withheld or
                refused, remuneration will commence again to accrue;

        10.1.2  Extra Remuneration: In the event of the occurrence of an Event
                of Default or a Potential Event of Default or the Trustee
                considering it expedient or necessary or being requested by the
                Issuer to undertake duties which the Trustee and the Issuer
                agree to be of an exceptional nature or otherwise outside the
                scope of the normal duties of the Trustee under this Trust Deed,
                the Issuer shall pay to the Trustee such additional remuneration
                as shall be agreed between them;

                                      -23-

        10.1.3  Value added tax: The Issuer shall in addition pay to the Trustee
                an amount equal to the amount of any value added tax or similar
                tax chargeable in respect of its remuneration under this Trust
                Deed;

        10.1.4  Failure to agree: In the event of the Trustee and the Issuer
                failing to agree:

                (a)     (in a case to which sub-clause 10.1.1 applies) upon the
                        amount of the remuneration; or

                (b)     (in a case to which sub-clause 10.1.2 applies) upon
                        whether such duties shall be of an exceptional nature or
                        otherwise outside the scope of the normal duties of the
                        Trustee under this Trust Deed, or upon such additional
                        remuneration;

                such matters shall be determined by a merchant bank (acting as
                an expert and not as an arbitrator) selected by the Trustee and
                approved by the Issuer or, failing such approval, nominated (on
                the application of the Trustee) by the President for the time
                being of The Law Society of England and Wales (the expenses
                involved in such nomination and the fees of such merchant bank
                being payable by the Issuer) and the determination of any such
                merchant bank shall be final and binding upon the Trustee and
                the Issuer;

        10.1.5  Expenses: The Issuer shall also pay or discharge all costs,
                charges and expenses incurred by the Trustee in relation to the
                preparation and execution of, the exercise of its powers and the
                performance of its duties under, and in any other manner in
                relation to, this Trust Deed, including but not limited to legal
                and travelling expenses and any stamp, issue, registration,
                documentary and other taxes or duties paid or payable by the
                Trustee in connection with any action taken or contemplated by
                or on behalf of the Trustee for enforcing, or resolving any
                doubt concerning, or for any other purpose in relation to, this
                Trust Deed;

        10.1.6  Indemnity: The Issuer shall indemnify the Trustee (a) in respect
                of all liabilities and expenses incurred by it or by any
                Appointee or other person appointed by it to whom any trust,
                power, authority or discretion may be delegated by it in the
                execution or purported execution of the trusts, powers,
                authorities or discretions vested in it by this Trust Deed and
                (b) against all liabilities, actions, proceedings, costs, claims
                and demands in respect of any matter or thing done or omitted in
                any way relating to this Trust Deed provided that it is
                expressly stated that Clause 9.5 (Trustee Liability) shall apply
                in relation to these provisions;

                                      -24-

        10.1.7  Payment of amounts due: All amounts due and payable pursuant to
                sub clauses 10.1.5 (Expenses) and 10.1.6 (Indemnity) shall be
                payable by the Issuer on the date specified in a demand by the
                Trustee; the rate of interest applicable to such payments shall
                be three per cent. per annum above the base rate from time to
                time of The Bank of New York and interest shall accrue:

                (a)     in the case of payments made by the Trustee prior to the
                        date of the demand, from the date on which the payment
                        was made or such later date as specified in such demand;

                (b)     in the case of payments made by the Trustee on or after
                        the date of the demand, from the date specified in such
                        demand, which date shall not be a date earlier than the
                        date such payments are made.

                All remuneration payable to the Trustee shall carry interest at
                the rate specified in this Clause 10.1.7 (Payment of amounts
                due) from the due date thereof;

        10.1.8  Discharges: Unless otherwise specifically stated in any
                discharge of this Trust Deed the provisions of this Clause 10.1
                (Remuneration) shall continue in full force and effect
                notwithstanding such discharge.

10.2    Stamp duties

        The Issuer will pay all stamp duties, registration taxes, capital duties
        and other similar duties or taxes (if any) payable on (a) the
        constitution and issue of the Notes, (b) the initial delivery of the
        Notes (c) any action taken by the Trustee (or any Noteholder where
        permitted or required under this Trust Deed so to do) to enforce the
        provisions of the Notes or this Trust Deed and (d) the execution of this
        Trust Deed. If the Trustee (or any Noteholder where permitted under this
        Trust Deed so to do) shall take any proceedings against the Issuer in
        any other jurisdiction and if for the purpose of any such proceedings
        this Trust Deed or any Note Certificate are taken into any such
        jurisdiction and any stamp duties or other duties or taxes become
        payable thereon in any such jurisdiction, the Issuer will pay (or
        reimburse the person making payment of) such stamp duties or other
        duties or taxes (including penalties).

10.3    Exchange rate indemnity

        10.3.1  Currency of Account and Payment: United States dollars or, in
                relation to Clause 10.1 (Remuneration), pounds sterling (the
                "Contractual Currency") is the sole currency of account and
                payment for all sums payable by the Issuer under or in
                connection with this Trust Deed and the Notes, including
                damages;

        10.3.2  Extent of Discharge: An amount received or recovered in a
                currency other than the Contractual Currency (whether as a
                result of, or of the enforcement of, a judgment or order of a
                court of any jurisdiction, in the winding-up or dissolution of
                the Issuer or otherwise), by the Trustee or any Noteholder in

                                      -25-

                respect of any sum expressed to be due to it from the Issuer
                will only discharge the Issuer to the extent of the Contractual
                Currency amount which the recipient is able to purchase with the
                amount so received or recovered in that other currency on the
                date of that receipt or recovery (or, if it is not practicable
                to make that purchase on that date, on the first date on which
                it is practicable to do so); and

        10.3.3  Indemnity: If that Contractual Currency amount is less than the
                Contractual Currency amount expressed to be due to the recipient
                under this Trust Deed or the Notes, the Issuer will indemnify it
                against any Liability sustained by it as a result. In any event,
                the Issuer will indemnify the recipient against the cost of
                making any such purchase.

10.4    Indemnities separate

        The indemnities in this Trust Deed constitute separate and independent
        obligations from the other obligations in this Trust Deed, will give
        rise to separate and independent causes of action, will apply
        irrespective of any indulgence granted by the Trustee and/or any
        Noteholder and will continue in full force and effect despite any
        judgment, order, claim or proof for a liquidated amount in respect of
        any sum due under this Trust Deed or the Notes or any other judgment or
        order. Any such Liability as referred to in sub-clause 10.3.3
        (Indemnity) shall be deemed to constitute a Liability suffered by the
        Trustee, the Noteholders and no proof or evidence of any actual
        Liability shall be required by the Issuer or its liquidator or
        liquidators.

11.     APPOINTMENT AND RETIREMENT

11.1    Appointment of Trustees

        The power of appointing new trustees of this Trust Deed shall be vested
        in the Issuer but no person shall be appointed who shall not previously
        have been approved by an Extraordinary Resolution. A trust corporation
        may be appointed sole trustee hereof but subject thereto there shall be
        at least two trustees hereof one at least of which shall be a trust
        corporation. Any appointment of a new trustee hereof shall as soon as
        practicable thereafter be notified by the Issuer to the Paying and
        Conversion Agents and to the Noteholders. The Noteholders shall together
        have the power, exercisable by Extraordinary Resolution, to remove any
        trustee or trustees for the time being hereof. The removal of any
        trustee shall not become effective unless there remains a trustee hereof
        (being a trust corporation) in office after such removal.

11.2    Co-trustees

        Notwithstanding the provisions of Clause 11.1 (Appointment of Trustees),
        the Trustee may, upon giving prior notice to the Issuer but without the
        consent of the Issuer or the Noteholders, appoint any person established
        or resident in any jurisdiction (whether a trust corporation or not) to
        act either as a separate trustee or as a co-trustee jointly with the
        Trustee:

        11.2.1  if the Trustee considers such appointment to be in the interests
                of the Noteholders; or

                                      -26-

        11.2.2  for the purposes of conforming to any legal requirements,
                restrictions or conditions in any jurisdiction in which any
                particular act or acts are to be performed; or

        11.2.3  for the purposes of obtaining a judgment in any jurisdiction or
                the enforcement in any jurisdiction either of a judgment already
                obtained or of this Trust Deed.

11.3    Attorneys

        The Issuer hereby irrevocably appoints the Trustee to be its attorney in
        its name and on its behalf to execute any such instrument of
        appointment. Such a person shall (subject always to the provisions of
        this Trust Deed) have such trusts, powers, authorities and discretions
        (not exceeding those conferred on the Trustee by this Trust Deed) and
        such duties and obligations as shall be conferred on such person or
        imposed by the instrument of appointment. The Trustee shall have power
        in like manner to remove any such person. Such proper remuneration as
        the Trustee may pay to any such person, together with any attributable
        costs, charges and expenses incurred by it in performing its function as
        such separate trustee or co-trustee, shall for the purposes of this
        Trust Deed be treated as costs, charges and expenses incurred by the
        Trustee.

11.4    Retirement of Trustees

        Any Trustee for the time being of this Trust Deed may retire at any time
        upon giving not less than three calendar months' notice in writing to
        the Issuer without assigning any reason therefor and without being
        responsible for any costs occasioned by such retirement. The retirement
        of any Trustee shall not become effective unless there remains a trustee
        hereof (being a trust corporation) in office after such retirement. The
        Issuer hereby covenants that in the event of the only trustee hereof
        which is a trust corporation giving notice under this Clause it shall
        use its best endeavours to procure a new trustee, being a trust
        corporation, to be appointed and if the Issuer has not procured the
        appointment of a new trustee within 30 days of the expiry of the Trustee
        notice referred to in this Clause 11.4, the Trustee shall be entitled to
        procure forthwith a new trustee.

11.5    Competence of a majority of Trustees

        Whenever there shall be more than two trustees hereof the majority of
        such trustees shall (provided such majority includes a trust
        corporation) be competent to execute and exercise all the trusts,
        powers, authorities and discretions vested by this Trust Deed in the
        Trustee generally.

11.6    Powers additional

        The powers conferred by this Trust Deed upon the Trustee shall be in
        addition to any powers which may from time to time be vested in it by
        general law or as the holder of any of the Notes.

11.7    Merger

        Any corporation into which the Trustee may be merged or converted or
        with which it may be consolidated, or any corporation resulting from any
        merger, conversion or consolidation to which the Trustee shall be a
        party, or any corporation succeeding to all or substantially all the

                                      -27-

        corporate trust business of the Trustee, shall be the successor of the
        Trustee hereunder, provided such corporation shall be otherwise
        qualified and eligible under this Clause, without the execution or
        filing of any paper or any further act on the part of any of the parties
        hereto.

12.     NOTICES

12.1    Addresses for notices

        All notices and other communications hereunder shall be made in writing
        and in English (by letter, telex or fax) and shall be sent as follows:

        12.1.1  Issuer: If to the Issuer, to it at:

                  BMB Munai, Inc.

                  Fax:          +7 3272 375 131
                  Attention:    Askar Tashtitov

        12.1.2  Trustee if to the Trustee, to it at:

                  BNY Corporate Trustee Services Limited

                  Fax:          +44 207 964 2351
                  Attention:    Manager, Trustee Administration

12.2    Effectiveness

        Every notice or other communication sent in accordance with Clause 12.1
        (Addresses for notices) shall be effective as follows:

        12.2.1  Letter or fax: if sent by letter, it shall be deemed to have
                been delivered 7 days after the time of despatch and if sent by
                fax it shall be deemed to have been delivered at the time of
                despatch; and

        12.2.2  Telex: if sent by telex, upon receipt by the sender of the
                addressee's answerback at the end of transmission; provided that
                any such notice or other communication which would otherwise
                take effect after 4.00 p.m. on any particular day shall not take
                effect until 10.00 a.m. on the immediately succeeding business
                day in the place of the addressee.

13.     LAW AND JURISDICTION

13.1    Governing law

        This Trust Deed is governed by, and shall be construed in accordance
        with, English law.

13.2    English courts and New York courts

        The courts of (a) England and (b) the State of New York located in the
        City and County of New York or in the United States District Court for
        the Southern District of New York have exclusive jurisdiction to settle

                                      -28-

        any dispute (a "Dispute"), arising from or connected with this Trust
        Deed or the Notes (including a dispute regarding the existence, validity
        or termination of this Trust Deed or the Notes) or the consequences of
        their nullity.

13.3    Appropriate forum

        The parties agree that the courts referred to in Clause 13.2 (English
        courts and New York courts) are the most appropriate and convenient
        courts to settle any Dispute and, accordingly, that they will not argue
        that any other courts are more appropriate or convenient.

13.4    Rights of the Trustee and Noteholders to take proceedings outside
        England and the State of New York

        Clause 13.2 (English courts and New York courts) is for the benefit of
        the Trustee and the Noteholders only. As a result, nothing in this
        Clause 13 (Law and jurisdiction) prevents the Trustee or any of the
        Noteholders from taking proceedings relating to a Dispute
        ("Proceedings") in any other courts with jurisdiction. To the extent
        allowed by law, the Trustee or any of the Noteholders may take
        concurrent Proceedings in any number of jurisdictions.

13.5    Process agent

        The Issuer agrees that the documents which start any Proceedings and any
        other documents required to be served in relation to those Proceedings
        may be served on it by being delivered (a) in connection with any
        Proceedings in England, to Clifford Chance Secretaries Limited at 10
        Upper Bank Street, London E14 5JJ or, if different, its registered
        office for the time being or at any address of the Issuer in Great
        Britain at which process may be served on it in accordance with Part
        XXIII of the Companies Act 1985 and (b) in connection with any
        Proceedings in the County of New York to CT Corporation System at 111
        Eighth Avenue, 13th Floor, New York, New York 10011 or, if different,
        its principal place of business in the County of New York for the time
        being. If either such person is not or ceases to be effectively
        appointed to accept service of process on behalf of the Issuer, the
        Issuer shall, on the written demand of the Trustee addressed to the
        Issuer and delivered to the Issuer appoint a further person in England
        or (as the case may be) the County of New York to accept service of
        process on its behalf and, failing such appointment within 15 days, the
        Trustee shall be entitled to appoint such a person by written notice
        addressed to the Issuer and delivered to the Issuer. Nothing in this
        paragraph shall affect the right of the Trustee or any of the
        Noteholders to serve process in any other manner permitted by law. This
        clause applies to Proceedings in England and in the County of New York
        and to Proceedings elsewhere.

14.     SEVERABILITY

        In case any provision in or obligation under this Trust Deed shall be
        invalid, illegal or unenforceable in any jurisdiction, the validity,
        legality and enforceability of the remaining provisions or obligations,
        or of such provision or obligation in any other jurisdiction, shall not
        in any way be affected or impaired thereby.

                                      -29-

15.     CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

        No person shall have any right to enforce any provision of this Trust
        Deed under the Contracts (Rights of Third Parties) Act 1999.

16.     COUNTERPARTS

        This Trust Deed may be executed in any number of counterparts, each of
        which shall be deemed an original.

IN WITNESS WHEREOF this Trust Deed has been executed as a deed by the parties
hereto and is intended to be and is hereby delivered on the date first before
written.

                                      -30-

                                   SCHEDULE 1
                            FORM OF NOTE CERTIFICATE

Serial Number:______________

THE NOTES AND THE SHARES TO BE ISSUED ON CONVERSION OF THE NOTES (THE "SHARES")
REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
SECURITIES LAW OF ANY STATE OF THE UNITED STATES. THE ISSUER IS A US DOMESTIC
ISSUER AND THE NOTES AND THE SHARES ARE BEING OFFERED ONLY OUTSIDE THE UNITED
STATES IN ACCORDANCE WITH RULE 903(B)(3)(III) ("CATEGORY 3") OF REGULATION S
UNDER THE SECURITIES ACT.

THE HOLDER HEREOF, BY PURCHASING THE NOTES AND/OR THE UNDERLYING SHARES
REPRESENTED HEREBY, AGREES ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER
PERSONS, ENTITIES OR ACCOUNTS FOR WHICH IT HOLDS THE NOTES (EACH AN "ACCOUNT"),
IF ANY, THAT PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE DATE OF INITIAL
PURCHASE FROM THE ISSUER (THE "RESALE RESTRICTION TERMINATION DATE"), THE NOTES
AND/OR THE UNDERLYING SHARES REPRESENTED HEREBY MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND ONLY (1) TO THE ISSUER OR A SUBSIDIARY THEREOF, (2)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED AND IS EFFECTIVE
UNDER THE SECURITIES ACT, (3) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS(1) THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF AND IN
ACCORDANCE WITH REGULATION S ("REGULATION S") UNDER THE SECURITIES ACT, OR (4)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF
LAW THAT THE DISPOSITION OF THE NOTES BE IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS. THE FOREGOING RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT
TO THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER HEREOF, ON ITS OWN BEHALF
AND ON BEHALF OF EACH ACCOUNT, IF ANY, UNDERSTANDS THAT THE REGISTRAR AND
TRANSFER AGENT FOR THE NOTES WILL NOT BE REQUIRED TO ACCEPT FOR REGISTRATION OF
TRANSFER ANY NOTES ACQUIRED BY THE HOLDER OR ANY ACCOUNT, EXCEPT UPON

--------
(1)  In order to qualify as a non-U.S. person under Regulation S, (a) the
     proposed transferee's principal address must be outside the United States,
     (b) the proposed transferee must be located outside the United States at
     the time any offer to buy the Notes was made to it and at the time that the
     buy order was originated by it, and (c) the proposed transferee must not be
     a "U.S. person" (as defined in Rule 902(k) under the Securities Act).

                                      -31-

PRESENTATION OF EVIDENCE SATISFACTORY TO THE ISSUER AND THE TRANSFER AGENT THAT
AN EXEMPTION TO THE REGISTRATION REQUIREMENT UNDER THE SECURITIES ACT AND THE
RULES AND REGULATIONS THEREUNDER HAVE BEEN COMPLIED WITH. THE HOLDER, ON THE
HOLDER'S OWN BEHALF AND ON BEHALF OF EACH ACCOUNT, IF ANY, ACKNOWLEDGES THAT THE
ISSUER RESERVES THE RIGHT, IN CONNECTION WITH ANY OFFER, SALE OR OTHER TRANSFER
OF THE NOTES PURSUANT TO CLAUSES (3) OR (4) ABOVE PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE, TO REQUIRE THE COMPLETION, EXECUTION AND DELIVERY
OF A LETTER FROM THE TRANSFEREE CONTAINING CERTIFICATIONS AND OTHER INFORMATION
SATISFACTORY TO THE ISSUER AND THE REGISTRAR AND TRANSFER AGENT AND AN OPINION
OF COUNSEL APPROVED BY THE ISSUER AND THE REGISTRAR AND TRANSFER AGENT TO ENSURE
COMPLIANCE WITH THE SECURITIES ACT AND THE RULES AND REGULATIONS THEREUNDER.

THE HOLDER HEREOF, ON THE HOLDER'S OWN BEHALF AND ON BEHALF OF EACH ACCOUNT, IF
ANY, HEREBY UNDERSTANDS AND AGREES THAT PRIOR TO THE END OF THE ONE-YEAR
RESTRICTED PERIOD WITHIN THE MEANING OF RULE 903(B)(3)(III) OF REGULATION S
UNDER THE SECURITIES ACT (THE "DISTRIBUTION COMPLIANCE PERIOD"), HEDGING
TRANSACTIONS INVOLVING SUCH NOTES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.

THE HOLDER HEREOF, BY PURCHASING THIS NOTE AND/OR UNDERLYING SHARES, REPRESENTS
AND AGREES FOR THE BENEFIT OF THE ISSUER AND ANY OF ITS SUCCESSORS IN INTEREST,
THAT IT WILL NOTIFY ANY PURCHASER OF THIS NOTE AND/OR UNDERLYING SHARES FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.

THE NOTES AND THE UNDERLYING SHARES ARE DEEMED TO BE "RESTRICTED SECURITIES"
WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT AND ARE SUBJECT TO THE
RESALE LIMITATIONS OF RULES 904 AND 905 UNDER REGULATION S. THIS LEGEND WILL BE
REMOVED ONLY AFTER THE RESALE RESTRICTION TERMINATION DATE AND UPON RECEIPT BY
THE ISSUER OF EVIDENCE SATISFACTORY TO IT (WHICH MAY INCLUDE AN OPINION OF
INDEPENDENT COUNSEL EXPERIENCED IN MATTERS OF UNITED STATES FEDERAL SECURITIES
LAW) THAT SUCH NOTE AND/OR THE UNDERLYING SHARE COULD BE TRANSFERRED BY THE
HOLDER THEREOF PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.

                                 BMB Munai, Inc.
                   (incorporated with limited liability under
                        the laws of the State of Nevada)

                                 U.S.$60,000,000
                    5.0 per cent. Convertible Notes due 2012

                                      -32-

This Note Certificate is issued in respect of the U.S.$60,000,000 5.0 per cent.
Convertible Notes due 2012 (the "Notes") of BMB Munai, Inc. (the "Issuer"). The
Notes are constituted by, are subject to, and have the benefit of, a trust deed
dated 13 July 2007 (as amended or supplemented from time to time, the "Trust
Deed") between the Issuer and BNY Corporate Trustee Services Limited as trustee
(the "Trustee", which expression includes all persons for the time being
appointed trustee or trustees under the Trust Deed) and are the subject of an
agency agreement dated 13 July 2007 (as amended or supplemented from time to
time, the "Agency Agreement") and made between the Issuer, The Bank of New York
(acting from its New York office) as registrar (the "Registrar", which
expression includes any successor registrar appointed from time to time in
connection with the Notes), The Bank of New York (acting from its New York
office) as principal paying and conversion agent (the "Principal Paying and
Conversion Agent"), the other paying agents and the transfer agents named
therein and the Trustee.

Any reference herein to the "Conditions" is to the terms and conditions of the
Notes endorsed hereon and any reference to a numbered "Condition" is to the
correspondingly numbered provision thereof.

This is to certify that:
                          _____________________________________________________

                          of __________________________________________________

                          _____________________________________________________

is the person registered in the register maintained by the Registrar in relation
to the Notes (the "Register") as the duly registered holder or, if more than one
person is so registered, the first-named of such persons (the "Holder") of:

               U.S.$___________________________________________________________
                  (_________________________________________[CURRENCY IN WORDS])
in aggregate principal amount of the Notes.

The Issuer, for value received, hereby promises to pay such principal sum to the
Holder on 13 July 2012 or on such earlier date or dates as the same may become
payable in accordance with the Conditions, and to pay interest on such principal
sum in arrear on the dates and at the rate specified in the Conditions, together
with any additional amounts payable in accordance with the Conditions, all
subject to and in accordance with the Conditions.

The Conversion Rights in respect of the Notes will be exercisable during the
Conversion Period by presentation of the Note Certificate to or to the order of
the Principal Paying and Conversion Agent for notation of exercise of the
relevant Conversion Rights together with one or more duly completed Conversion
Notices.

The statements set out in the legend above are an integral part of this Note
Certificate and, by acceptance hereof, each Holder of this Note Certificate
agrees to be subject to and bound by such legends.

                                      -33-

This Note Certificate is evidence of entitlement only and is not a document of
title. Entitlements are determined by the Register and only the Holder is
entitled to payment in respect of this Note Certificate.

This Note Certificate shall not be valid for any purpose until it has been
authenticated for and on behalf of The Bank of New York as registrar.

AS WITNESS the manual or facsimile signature of a duly authorised person on
behalf of the Issuer.

BMB Munai, Inc.

By:      ________________________________________
         [manual or facsimile signature]
         (duly authorised)

ISSUED as of [ ]

AUTHENTICATED for and on behalf of THE BANK OF NEW YORK as registrar without
recourse, warranty or liability

By:      ________________________________________
         [manual signature]
         (duly authorised)

                                      -34-

                                FORM OF TRANSFER

FOR VALUE RECEIVED ______________________________________, being the registered
holder of this Note Certificate, hereby transfers to ___________________________
________________________________________________________________________________
of _____________________________________________________________________________
________________________________________________________________________________
_____________________________________________________________________[currency]
in principal amount of the U.S.$60,000,000 5.0 per cent. Convertible Notes due
2012 (the "Notes") of BMB Munai, Inc. (the "Issuer") and irrevocably requests
and authorises The Bank of New York (acting from its New York office), in its
capacity as registrar in relation to the Notes (or any successor to The Bank of
New York, in its capacity as such) to effect the relevant transfer by means of
appropriate entries in the register kept by it.

We, as transferor of the Notes represented by this Note Certificate, hereby
certify that such Notes are being transferred in accordance with the transfer
restrictions set forth in the Terms and Conditions relating to the Notes and in
accordance with the terms of any legend on this Note Certificate and we confirm
that we have notified the transferee that it must, on its own behalf and on
behalf of each Account, provide the Issuer with Form of Transferee's letter
attached to the Agency Agreement as Schedule 2, Part B.

In connection with any transfer of this Note occurring prior to the date which
is two years after the date of initial purchase from the issuer (the "Resale
Restriction Termination Date") and the last date, if any, that this Note (or any
predecessor Note) was owned by the Issuer, or an affiliate of the Issuer, the we
confirm that without utilizing any general solicitation or general advertising:

                                   [check one]

[ ] (a) this Note and/or the underlying Share is being transferred to the Issuer
or a subsidiary thereof and such transferee shall make the appropriate
notification to the Registrar and transfer agent pursuant to Schedule 1 of the
Agency Agreement.

or

[ ] (b) this Note and/or the underlying Share is being transferred pursuant to
an effective registration statement under the Securities Act.

or

[ ] (c) this Note and/or the underlying Share is being transferred pursuant to
offers and sales to Non-U.S. Persons that occur outside the United States in
compliance with Rule 903 or 904 under the Securities Act.

or

[ ] (d) this Note and/or the underlying Share is being transferred pursuant to
any other available exemption from the registration requirements of the
Securities Act (if available).

                                      -35-

In addition, the undersigned will provide the Issuer and any transfer agent such
certifications, legal opinions and other information, if any, as they may
reasonably require to confirm that the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.

If none of the foregoing boxes is checked, the Registrar shall not be obligated
to register this Note Certificate in the name of any person other than the
registered holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Schedule 1 of the Agency Agreement shall
have been satisfied.

Date:__________________________     ___________________________________________

                                    NOTICE: The signature to this assignment
                                    must correspond with the name as written
                                    upon the face of the within-mentioned Note
                                    Certificate in every particular, without
                                    alteration or any change whatever.

By:____________________________

By:____________________________
        (duly authorised)

Notes

The name of the person by or on whose behalf this form of transfer is signed
must correspond with the name of the registered holder as it appears on the face
of this Note Certificate.

(a)     A representative of such registered holder should state the capacity in
        which he signs, e.g. executor.

(b)     The signature of the person effecting a transfer shall conform to any
        list of duly authorised specimen signatures supplied by the registered
        holder or be certified by a recognised bank, notary public or in such
        other manner as the Registrar may require.

(c)     Any transfer of Note Certificate shall be in an amount equal to
        U.S.$100,000 or any integral multiple of U.S.$100,000 in excess thereof.

                                      -36-

PART A

TERMS AND CONDITIONS OF THE NOTES

The following, subject to completion and amendment, are the terms and conditions of the Notes substantially as they will appear in the trust deed constituting the Notes (“Conditions “). For ease of reference these Conditions are divided into sections dealing with: the definitions used in these terms and conditions (Conditions 1-2); the debt security (Conditions 3-11); the equity option (Conditions 12-15); adjustments to the conversion price (Conditions 16-31); covenants relating to the equity option (Conditions 32-38); and miscellaneous provisions (Conditions 39-46). This paragraph, and any other paragraphs appearing in italics in these terms and conditions, do not form part of these terms and conditions.

Introduction and Definitions

	
            1.
 	
            Introduction
 

	
            (a)
 	
            The Notes:  The expression the “Notes “ refers to the U.S.$ 60,000,000 5.0 per cent. Convertible Notes due 13 July 2012 of BMB Munai, Inc. (the “Issuer “).
 

	
            (b)
 	
            Trust Deed:  The Notes are subject to, and have the benefit of, a trust deed dated 13 July 2007 (as amended or supplemented from time to time, the “Trust Deed “) between the Issuer and BNY Corporate Trustee Services Limited as trustee (the “Trustee “, which expression includes all persons for the time being trustee or trustees appointed under the Trust Deed).
 

	
            (c)
 	
            Agency Agreement:  The Notes are also the subject of an agency agreement dated 13 July 2007 (as amended or supplemented from time to time, the “Agency Agreement “) between the Issuer, the Bank of New York (acting from its New York office) as Transfer Agent (the “Transfer Agent”, which expression includes any successor transfer agent appointed from time to time in respect of the Notes), The Bank of New York (acting from its New York office) as registrar (the “Registrar “, which expression includes any successor registrar appointed from time to time in respect of the Notes), The Bank of New York as principal paying and conversion agent
(the “Principal Paying and Conversion Agent “, which expression includes any successor principal paying and conversion agent appointed from time to time in connection with the Notes), the paying and conversion agents named therein (together with the Principal Paying and Conversion Agent, the “Paying and Conversion Agents “, which expression includes any successor or additional paying and conversion agents appointed from time to time in connection with the Notes) and the Trustee. References herein to “Agents “ are to the Registrar, the Transfer Agent and the Paying and Conversion Agents and any reference to an “Agent “ is to any one of them.
 

	
            (d)
 	
            Summaries:  Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and subject to their detailed provisions. The holders of the Notes (the “Noteholders “) are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the registered office for the time being of the Trustee, being at the date hereof The Bank of New York and at the Specified Offices of each of the Paying and Conversion Agents, the initial Specified Offices of which are set out below.
 

	
            2.
 	
            Interpretation
 

	
            (a)
 	
            Definitions:  In these Conditions the following expressions have the following meanings:
 

“Aggregate Consideration “ has the meaning given in Condition 29 (Aggregate Consideration and Consideration per Share);

“American Stock Exchange “ means the American Stock Exchange LLC;

“Applicable Rate” means, with respect to the principal amount of any Note on a Change of Control Put Date, the sum of (A) 100 per cent. and (B) an amount equal to the product of (i) 7.2 per cent. multiplied by (ii) a fraction, the numerator of which is the number of days from the Issue Date to 

 

	
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such Change of Control Put Date, using a 360-day year of twelve 30-day months, and the denominator of which is 1,800;

“Bonus Issue “ means any issue of Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve) other than a Dividend in Shares;

“Clearstream, Luxembourg “ means Clearstream Banking, société anonyme;

“Change of Control Event “ has the meaning given in Condition 16(c) (Change of Control - Change of Control Event);

“Change of Control Event Notice “ has the meaning given in Condition 16(d) (Change of Control - Adjustment to the Conversion Price);

“Change of Control Event Premium” has the meaning given in Condition 38 (Change of Control Event Premium);

“Closing Market Price “ means, in respect of a Share on any particular Exchange Business Day, the closing market price of a Share published by the American Stock Exchange in respect of that Exchange Business Day;

“Consideration per Share “ has the meaning given in Condition 29 (Aggregate Consideration and Consideration per Share);

“Conversion Date “ has the meaning given in Condition 13(d) (Procedure for Conversion - Conversion Date); 

“Conversion Expenses “ has the meaning given in Condition 13(b) (Procedure for Conversion - Conversion Expenses);

“Conversion Notice “ means a notice of conversion in the form (for the time being current) obtainable from the Specified Office of any Paying and Conversion Agent;

“Conversion Period “ has the meaning given in Condition 12(b) (Conversion - Conversion Period);

“Conversion Price “ has the meaning given in Condition 12(d) (Conversion - Conversion Price);

“Conversion Right “ means, in respect of any Note, the right of the holder to convert the Note into Shares in accordance with these Conditions;

“Current Market Price “ means, in respect of a Share at a particular date, the arithmetic average of the Volume Weighted Average Price per Share for each of the 10 consecutive Exchange Business Days ending on the Exchange Business Day immediately preceding such date (the “Relevant Period “), provided that:

	
             
 	
            (a)
 	
            if at any time during the Relevant Period the Volume Weighted Average Price shall have been based on a price ex-Dividend (or ex-any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement), then:
 

	
             
 	
            (i)
 	
            if the Shares to be issued do not rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement) shall for the purpose of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of that Dividend (or entitlement) per Share (excluding any associated tax credit and less the tax (if any) falling to be deducted on payment thereof to a resident of the United States); or 
 

 

	
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            (ii)
 	
            if the Shares to be issued do rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Volume Weighted Average Price shall have been based on a price ex-Dividend (or ex-any other entitlement) shall for the purpose of this definition be deemed to have been the amount thereof increased by such similar amount; and
 

	
             
 	
            (b)
 	
            if on each of the 10 Exchange Business Days during the Relevant Period the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement) in respect of a Dividend (or entitlement) which has been declared or announced but the Shares to be issued do not rank for that Dividend (or entitlement) the Volume Weighted Average Price on each of such dates shall for the purposes of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of that Dividend (or entitlement) per Share (excluding any associated tax credit and less the tax (if any) falling to be deducted on payment thereof to a resident of the United States); and 
 

	
             
 	
            (c)
 	
            if the Volume Weighted Average Price is not available on each of the 10 Exchange Business Days during the Relevant Period, then the arithmetic average of the Volume Weighted Average Prices which are available in the Relevant Period shall be used (subject to the Volume Weighted Average Price being available on at least two such Exchange Business Days); and 
 

	
             
 	
            (d)
 	
            if the Volume Weighted Average Price is not available on any Exchange Business Day in the Relevant Period, or is available on only one Exchange Business Day in the Relevant Period,  then the Current Market Price shall be Determined by an Expert;
 

“Determined by an Expert “ means determined in good faith by an Expert acting as an expert;

“Dividend “ means any dividend or distribution of any kind on the class of capital represented by the Shares, whether in cash or otherwise and however described:

	
             
 	
            (a)
 	
            including, without limitation, a Dividend in Shares;
 

	
             
 	
            (b)
 	
            excluding a Bonus Issue; and
 

	
             
 	
            (c)
 	
            including, without limitation, any other issue of shares or other securities credited as fully or partly paid by way of capitalisation of profits or reserves;
 

“Dividend in Shares “ means any issue of Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves which is to be, or may at the election of the Shareholders be, issued instead of the whole or any part of a cash Dividend which the Shareholders concerned would or could otherwise have received;

“Dolinnoe Field” means the field for exploration of hydrocarbons known as “the Dollinoe field” located in the Tybkaragan Region of Mangystau oblast in the Republic of Kazakhstan;

“Effective Date “ has:

	
             
 	
            (a)
 	
            for the purposes of Condition 17 (Dividends), the meaning given in Condition 17(b) (Dividends - Effective Date); 
 

	
             
 	
            (b)
 	
            for the purposes of Condition 18 (Bonus Issues), the meaning given in Condition 18(b) (Bonus Issues - Effective Date); 
 

	
             
 	
            (c)
 	
            for the purposes of Condition 19 (Consolidation or Subdivision), the meaning given in Condition 19(b) (Consolidation or Subdivision - Effective Date); 
 

 

	
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            (d)
 	
            for the purposes of Condition 20 (Shares, Rights and Share-Related Securities Issued to Shareholders), the meaning given in Condition 20(b) (Shares, Rights and Share-Related Securities issued to Shareholders - Effective Date); 
 

	
             
 	
            (e)
 	
            for the purposes of Condition 21 (Issue of other Securities to Shareholders), the meaning given in Condition 21(b) (Issue of other Securities to Shareholders - Effective Date); 
 

	
             
 	
            (f)
 	
            for the purposes of Condition 22 (Issue of Shares at Below Current Market Price), the meaning given in Condition 22(b) (Issue of Shares at Below Current Market Price - Effective Date); 
 

	
             
 	
            (g)
 	
            for the purposes of Condition 23 (Share-Related Securities Issued Other than to Shareholders), the meaning given in Condition 23(b) (Share-Related Securities Issued Other than to Shareholders - Effective Date); 
 

	
             
 	
            (h)
 	
            for the purposes of Condition 24 (Amendment of Terms of Rights or Share-Related Securities), the meaning given in Condition 24(b) (Amendment of Terms of Rights or Share-Related Securities - Effective Date); and
 

	
             
 	
            (i)
 	
            for the purposes of Condition 25 (Other Arrangements to Acquire Securities), the meaning given in Condition 25(b) (Other Arrangements to Acquire Securities - Effective Date); 
 

“Equity” means the aggregate market value of the Issuer’s ordinary shares based on the Volume Weighted Average Price of a Share as at the date of each quarterly report filed on Form 10-Q by the Issuer pursuant to the Exchange Act;

“Euroclear “ means Euroclear Bank S.A./N.A.;

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

“Exchange Business Day “ means any day that is a trading day on the American Stock Exchange other than a day on which the American Stock Exchange is scheduled to close prior to its regular weekday closing time;

“Expert “ means, in relation to any matter to be Determined by an Expert, an independent investment bank and/or a firm of accountants which is, in either case, of international repute, appointed to act as an expert for the purposes of such matter in accordance with these Conditions and the Trust Deed;

“Extraordinary Resolution “ has the meaning given in the Trust Deed;

“Fair Market Value “ means: 

	
             
 	
            (a)
 	
            with respect to a cash Dividend or other cash amount the amount of such cash; and 
 

	
             
 	
            (b)
 	
            with respect to any other property on any date, the fair market value of that property as Determined by an Expert,  
 

provided, however, that in any such case:

	
             
 	
            (i)
 	
            where options, warrants or other rights are publicly traded in a market which is Determined by an Expert to have adequate liquidity, the fair market value of such options, warrants or other rights shall equal the arithmetic mean of the daily closing prices of such options, warrants or other rights during the period of five trading days on the relevant market commencing on such date (or, if later, the first such trading day such options, warrants or other rights are publicly traded) or such shorter period as such options, warrants or other rights are publicly traded; 
 

 

	
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            (ii)
 	
            any cash Dividend declared or paid in a currency other than U.S. dollars shall be converted into U.S. dollars at the rate of exchange used to determine the amount payable to Shareholders who were paid or are to be paid the cash Dividend in U.S. dollars; and 
 

	
             
 	
            (iii)
 	
            any other amount or value in a currency other than U.S. dollars shall be converted into U.S. dollars at the Screen Rate on that date;
 

“Filing Deadline Date” has the same meaning as is ascribed to that term in the Registration Rights Agreement;

“Group “ means the Issuer and its Subsidiaries taken as a whole;

“Guarantee “ means, in relation to any Indebtedness of any Person, any obligation of another person to pay such Indebtedness;

“Indebtedness “ means, at any time, the outstanding principal, capital or nominal amount and any fixed or minimum premium payable on prepayment or redemption of any indebtedness for or in respect of:

	
             
 	
            (a)
 	
            moneys borrowed and debit balances with financial institutions;
 

	
             
 	
            (b)
 	
            any amount raised by acceptance under any acceptance credit facility;
 

	
             
 	
            (c)
 	
            any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
 

	
             
 	
            (d)
 	
            the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with accounting principles generally accepted in the United States, be treated as a finance or capital lease;
 

	
             
 	
            (e)
 	
            receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
 

	
             
 	
            (f)
 	
            any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution (excluding any given in respect of trade credit arising in the ordinary course of business);
 

	
             
 	
            (g)
 	
            any amount raised by the issue of redeemable shares which are redeemable before 31 December 2012;
 

	
             
 	
            (h)
 	
            any amount of any liability under an advance or deferred purchase agreement if one of the primary reasons behind the entry into the agreement is to raise finance;
 

	
             
 	
            (i)
 	
            any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; and
 

	
             
 	
            (j)
 	
            (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above.;
 

“Initial Shelf Registration Statement “ has the meaning ascribed to that term in the Registration Rights Agreement;

“Interest Payment Date “ means 13 January and 13 July in each year, the first Interest Payment Date being 13 January 2008;

“Issue Date “ means 13 July 2007;

 

	
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“Material Subsidiary “ means any Subsidiary of the Issuer:

	
             
 	
            (a)
 	
            whose total assets at the time of at least one of the three most recently published consolidated audited financial statements of the Issuer represent at least 10 per cent, of the consolidated total assets of the Issuer; or
 

	
             
 	
            (b)
 	
            whose revenues at the time of at least one of the three most recently published consolidated audited financial statements of the Issuer represent at least 10 per cent, of the consolidated total revenues of the Issuer,
 

provided that in the case of a Subsidiary acquired or an entity which becomes a Subsidiary after the end of the financial period to which the then latest audited consolidated financial statements of the Issuer relate, the reference to the then latest audited consolidated financial statements for the purposes of the calculation above shall, until audited consolidated financial statements of the Issuer are published for the financial period in which the acquisition is made or, as the case may be, in which such entity becomes a Subsidiary, be deemed to be a reference to the then latest consolidated financial statements of the Issuer adjusted in such manner as the Issuer shall consider appropriate to consolidate the latest audited accounts of such Subsidiary in such accounts; and a certificate signed by two directors of the Issuer that in their opinion a
Subsidiary of the Issuer is or is not or was or was not at any time or throughout any specified period a Material Subsidiary shall, in the absence of manifest or proven error, be conclusive and binding on all parties;

“Maturity Date “ means 13 July 2012;

“Minimum Conversion Price “ means the Closing Market Price on 13 July 2007, provided that on each occasion, if any, on which the Conversion Price is adjusted pursuant to any of Condition 17 (Dividends), Condition 18 (Bonus Issues), Condition 19 (Consolidation or Subdivision), Condition 20 (Shares, Rights and Share-Related Securities Issued to Shareholders), Condition 21 (Issue of other Securities to Shareholders) or Condition 25 (Other Arrangements to Acquire Securities) then the Minimum Conversion Price
shall be adjusted at the same time by the same proportion;

“Net Debt” means the Group’s aggregate Indebtedness less the Group’s aggregate free cash and cash equivalents (as determined under U.S. GAAP) as at the date of each quarterly report filed on Form 10-Q by the Issuer pursuant to the Exchange Act ;

“Offer “ means an offer to acquire Shares, whether expressed as a legal offer, an invitation to treat, a scheme with regard to such acquisition or in any other way, in circumstances where such offer is available to all Shareholders or all Shareholders other than any Shareholder who is the person making such offer (or any associate of such person) or who is excluded from the offer by reason of being connected with one or more specific jurisdictions;

“Payment Business Day “ means, in respect of any place of presentation of any Note Certificate, any day on which banks are open for presentation and payment of debt securities and for dealings in foreign currencies in such place of presentation and, in the case of payment by transfer to a U.S. dollar account as referred to in Condition 9 (Payments), in New York City;

“Person “ means any individual, company, corporation, firm, partnership, joint venture, association, organisation, state or agency of a state or other entity, whether or not having separate legal personality;

“Put Option Notice “ has the meaning given in Condition 8(b) (Redemption and Purchase - Redemption at the option of Noteholders):

“Put Option Receipt “ has the meaning given in Condition 8(b) (Redemption and Purchase - Redemption at the option of Noteholders):

 

	
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“Put Settlement Date “ means, in relation to the options described in Conditions 8(b)(i) and 8(b)(ii), the date that is 10 New York business days following the date on which the Holder validly deposits a Put Option Notice with any Paying and Conversion Agent, and, in relation to the option described in Condition 8(b)(iii), means the Third Put Date as defined in Condition 8(b)(iii);

“Rate of Interest “ means 5.0 per cent. per annum;

“Record Date “ means, in respect of any entitlement to receive any dividend or other distribution declared, paid or made, or any rights granted, the record date or other due date for the establishment of the relevant entitlement;

“Registration Rights Agreement “ means the registration rights agreement dated 13 July 2007 between the Issuer and Bayerische Hypo-und Vereinsbank AG;

“Regulation S “ means Regulation S under the United States Securities Act of 1933;

“Relevant Date “ means, in relation to any payment in respect of a Note, whichever is the later of (1) the date on which the payment in question first becomes due and (2) if the full amount payable has not been received in New York City by the Principal Paying and Conversion Agent or the Trustee on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the Noteholders;

“Relevant Indebtedness “ means any Indebtedness which is in the form of or represented by any bond, note, debenture, debenture stock, loan stock, certificate or other instrument which with the agreement of the Issuer or the relevant Material Subsidiary is, or is capable of being, listed, quoted or traded on any recognised stock exchange or in any securities market (including, without limitation, any recognised over-the-counter market);

“Reserved Matter “ means, in the context of any meeting of Noteholders, any proposal:

	
             
 	
            (a)
 	
            to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes or to alter the method of calculating the amount of any payment in respect of the Notes on redemption or maturity or the date for any such payment;
 

	
             
 	
            (b)
 	
            to effect the exchange (for the avoidance of doubt, reference to exchange in this paragraph excludes the Exchange Offer defined in Condition 6(f) (Exchange Offer)), conversion or substitution of the Notes for, or the conversion of the Notes into, shares, bonds or other obligations or securities of the Issuer or any other person or body corporate formed or to be formed (other than as permitted under the Trust Deed);
 

	
             
 	
            (c)
 	
            to change the currency in which amounts due in respect of the Notes are payable;
 

	
             
 	
            (d)
 	
            to change any aspect of the Conversion Right;
 

	
             
 	
            (e)
 	
            to change the quorum required at any meeting of Noteholders or the majority required to pass an Extraordinary Resolution; or
 

	
             
 	
            (f)
 	
            to amend this definition of Reserved Matter;
 

“Rights “ means, in respect of any securities or assets, any options, warrants or other rights (other than Share-Related Securities) which by their terms of issue carry a right to subscribe for, purchase or otherwise acquire such securities or assets;

“Screen Rate “ means, on any day, and, in respect of the translation or conversion of one currency into another currency, the rate of exchange between such currencies appearing on Bloomberg page FXFX1 at or about 11.00 a.m. New York time on that day, or, if that page is not available or that rate of exchange does not appear on that page at or about that time on that day, the rate of exchange 

 

	
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between such currencies appearing on such other screen or information service, or determined in such other manner, as the Issuer shall determine, with the prior written approval of the Trustee;

“Securities Act” means the United States Securities Act of 1933, as amended;

“Security Interest “ means any mortgage, charge, pledge, lien or other security interest including, without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction; 

“Share “ means a common share of U.S.$ 0.001 par value of the share capital of the Issuer;

“Shareholder “ means the person in whose name a Share is for the time being registered in the register of Share ownership maintained by or on behalf of the Issuer;

“Share-Related Securities “ means any securities which by their original terms of issue:

	
             
 	
            (a)
 	
            carry a right to subscribe for, purchase or otherwise acquire Shares or any securities which by their terms of issue might be redesignated as Shares; or 
 

	
             
 	
            (b)
 	
            are capable of being redesignated as Shares or redesignated so as to carry a right to subscribe for, purchase or otherwise acquire Shares;
 

“Shelf Registration Statement “ has the meaning ascribed to that term in the Registration Rights Agreement;

“Shelf Registration Statement Filing Date “ means the date on which the Shelf Registration Statement is filed in accordance with the Registration Rights Agreement;

“Shelf Registration Statement Effective Date “ means the date on which the Shelf Registration Statement becomes effective in accordance with the Registration Rights Agreement;

“Specified Office “ has the meaning given in the Agency Agreement;

“Subsidiary “ means, in relation to the Issuer at any particular time, any other Person:

	
             
 	
            (a)
 	
            whose affairs and policies the Issuer controls or has the power to control, whether by ownership of share capital, contract, the power to appoint or remove members of the governing body of such Person or otherwise; or
 

	
             
 	
            (b)
 	
            whose financial statements are, in accordance with applicable law and generally accepted accounting principles, consolidated with those of the Issuer; 
 

“Trading Day “ means a day when the American Stock Exchange is open for business, but does not include a day when (a) no such last transaction price or closing bid and offered prices is/are reported and (b) (if the Shares are not listed or admitted to trading on such exchange) no such closing bid and offered prices are furnished as aforesaid.

“U.S. dollars “ and “U.S.$ “ means the lawful currency of the United States; 

“U.S. GAAP” means accounting principles generally accepted in the United States;

“United States” means the United States of America; and

“Volume Weighted Average Price “ means, in respect of a Share on any Exchange Business Day, the order book volume-weighted price of a Share appearing on or derived from Bloomberg page AQR (or such other source as shall be Determined by an Expert) on such Exchange Business Day, provided that (other than for the purpose of the definition of Current Market Price):

 

	
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            (a)
 	
            if on any such Exchange Business Day such price is not available or cannot otherwise be determined as provided above, the Volume Weighted Average Price of a Share in respect of such Exchange Business Day shall be the Volume Weighted Average Price, determined as provided above, on the immediately preceding Exchange Business Day on which the same can be so determined; and
 

	
             
 	
            (b)
 	
            if any Dividend or other entitlement in respect of the Shares is announced on or prior to the relevant Conversion Date in circumstances where the Record Date in respect of such Dividend or other entitlement shall be on or after the relevant Conversion Date and if on any such Exchange Business Day the price as determined as provided above is based on a price ex-Dividend or ex-any other entitlement, then such price shall be increased by an amount equal to the Fair Market Value of any such Dividend or other cash entitlement as at the date of announcement of such Dividend or entitlement per Share (excluding, in the case of a dividend in cash, any associated tax credit and less the tax, if any, falling to be deducted on payment thereof to a resident of the United States).
 

	
            (b)
 	
            Construction of certain references:  In these Conditions, unless otherwise specified or unless the context otherwise requires:
 

	
             
 	
            (i)
 	
            a reference to a “business day” in any place shall be construed as a reference to a day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in that place; 
 

	
             
 	
            (ii)
 	
            references to Notes being “outstanding” shall be construed in accordance with the Trust Deed; 
 

	
             
 	
            (iii)
 	
            references to any issue or offer or grant to Shareholders “as a class” or “by way of rights” shall be construed so as to include an issue or offer or grant to all or substantially all Shareholders other than Shareholders to whom, by reason of the laws of any jurisdiction or requirements of any recognised regulatory body or any stock exchange in any jurisdiction or in connection with fractional entitlements, it is determined not to make such issue or offer or grant;
 

	
             
 	
            (iv)
 	
            “equity share capital” means, in relation to a company, its issued share capital excluding any part of that capital which,  neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;
 

	
             
 	
            (v)
 	
            references to the “issue” of Shares shall include the transfer and/or delivery of Shares by the Issuer or any of its Subsidiaries, whether newly issued and allotted or previously existing;
 

	
             
 	
            (vi)
 	
            Shares held by the Issuer or any of its Subsidiaries shall not be considered as or treated as “in issue”; and
 

	
             
 	
            (vii)
 	
            headings and sub-headings are for ease of reference only and shall not affect the construction of these Conditions.
 

The Debt Security

	
            3.
 	
            Form, Denomination and Title
 

The Notes are in registered form in the denomination of U.S.$ 100,000.

	
            4.
 	
            Status
 

The Notes constitute direct, general and unconditional obligations of the Issuer which will at all times rank pari passu among themselves and pari passu with all other present and future unsecured obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.

 

	
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            5.
 	
            Register, Title and Transfers
 

	
            (a)
 	
            Register:  The Registrar will maintain a register (the “Register “) in respect of the Notes in accordance with the provisions of the Agency Agreement. In these Conditions, the “Holder “ of a Note means the person in whose name such Note is for the time being registered in the Register (or, in the case of a joint holding, the first named thereof) and “Noteholder “ shall be construed accordingly. A certificate (each, a “Note Certificate “) will be issued to each Noteholder in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying
number which will be recorded in the Register.
 

	
            (b)
 	
            Title:  The Holder of each Note shall (except as otherwise required by law) be treated as the absolute owner of such Note for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing on the Note Certificate relating thereto (other than the endorsed form of transfer) or any notice of any previous loss or theft of such Note Certificate) and no person shall be liable for so treating such Holder. No person shall have any right to enforce any term or condition of the Notes or the Trust Deed under the Contracts (Rights of Third Parties) Act 1999.
 

	
            (c)
 	
            Transfers:  Subject to paragraphs (f) (Closed periods) and (g) (Regulations concerning transfers and registration) below, a Note may be transferred upon surrender of the relevant Note Certificate, with the endorsed form of transfer duly completed, at the Specified Office of the Registrar or any Transfer Agent, together with such evidence as the Registrar or (as the case may be) such Transfer Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer. Where not all the Notes represented by the surrendered Note Certificate are the subject of the transfer, a new Note Certificate in respect of the balance of the Notes will be
issued to the transferor.
 

	
            (d)
 	
            Registration and delivery of Note Certificates:  Within five business days of the surrender of a Note Certificate in accordance with paragraph (c) (Transfers) above, the Registrar will register the transfer in question and deliver a new Note Certificate of a like principal amount to the Notes transferred to each relevant Holder at its Specified Office or (as the case may be) the Specified Office of any Transfer Agent or (at the request and risk of any such relevant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant Holder. In this paragraph, “business day “ means a day on which commercial banks are open for general business
(including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Transfer Agent has its Specified Office.
 

	
            (e)
 	
            No charge:  The transfer of a Note will be effected without charge by or on behalf of the Issuer, the Registrar or any Transfer Agent but against such indemnity as the Registrar or (as the case may be) such Transfer Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer.
 

	
            (f)
 	
            Closed periods:  Noteholders may not require transfers to be registered during the period of 15 days ending on the due date for any payment of principal or interest in respect of the Notes.
 

	
            (g)
 	
            Regulations concerning transfers and registration:  All transfers of Notes and entries on the Register are subject to the detailed regulations concerning the transfer of Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations.
 

	
            6.
 	
            Undertakings
 

	
            (a)
 	
            Negative Pledge: So long as any Note remains outstanding, the Issuer shall not, and the Issuer shall procure that none of its Material Subsidiaries will, create or permit to subsist any Security Interest upon the whole or any part of their respective present or future undertaking, assets or revenues (including uncalled capital) to secure any Relevant Indebtedness or Guarantee of Relevant 
 

 

	
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Indebtedness without (a) at the same time or prior thereto securing the Notes equally and rateably therewith to the satisfaction of the Trustee or (b) providing such other security for the Notes as the Trustee may in its absolute discretion consider to be not materially less beneficial to the interests of the Noteholders or as may be approved by an Extraordinary Resolution of Noteholders.

	
            (b)
 	
            Change of business: The Issuer shall not (whether by means of disposals of all or part of its assets or operations or otherwise) make a substantial change to the general nature of the business of the Issuer from that of hydrocarbons exploration and production, being the business carried on by the Issuer at the Issue Date.
 

	
            (c)
 	
            Disposal of assets: Without prejudice to Condition 6(b), the Issuer shall not, and shall procure that none of its Subsidiaries will, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of more than 20 per cent. of (i) its rights in the Dolinnoe Field as at the Issue Date or (ii) any ownership interest that it has in any company holding rights in the Dolinnoe Field as at the Issue Date.
 

	
            (d)
 	
            Financial ratio: The Issuer shall ensure that the Group maintains a Net Debt to Equity ratio of no more than 3:5 provided that the Issuer shall not be required to comply with such ratio for up to a maximum of two consecutive financial quarters if the Trustee has confirmed, upon application by the Issuer accompanied by sufficient evidence, that the Issuer has certified to the reasonable satisfaction of the Trustee (upon which certification the Trustee shall be entitled to rely without need of any further enquiry) that its failure to comply with such ratio is principally attributable to an increase in the Issuer’s Indebtedness for the purpose of funding a corporate acquisition.
 

	
            (e)
 	
            Financial statements:  The Issuer has covenanted in the Trust Deed to produce and send to the Trustee and to the Principal Paying and Conversion Agent as soon as practicable after their date of publication and in the case of annual financial statements in any event not more than 180 days after the end of each financial year, two copies of the Issuer’s annual report on Form 10-K filed by the Issuer pursuant to the Exchange Act and of each of the Issuer’s quarterly reports on Form 10-Q filed by the Issuer pursuant to the Exchange Act, or other notice, statement or circular issued (or which under any legal or contractual obligation should be issued) to the members or Holders of debentures or creditors (or any class of them) of the Issuer in their capacity as such at the time of the actual (or
legally or contractually required) issue or publication thereof and procure that the same are made available for inspection by Noteholders at the Specified Offices of the Agents as soon as practicable thereafter.
 

	
            (f)
 	
            Exchange Offer:  The Issuer shall commence, within 30 days from the Issue Date, an offer (the “Exchange Offer”) to the Noteholders to exchange any or all of the Notes for a like aggregate principal amount of debt securities of the Issuer (the “Exchange Notes”) that are substantially similar in all material respects to the Notes except that the Exchange Notes will be governed by, and entitled to the benefits of, a New York law-governed trust indenture (the “Exchange Indenture”) that is substantially similar in all material respects to the Trust Deed except that it:
 

	
             
 	
            (i)
 	
            will contemplate the issue of one or more global note(s), in the form attached to the Exchange Indenture (the “Global Note(s)”), that will become eligible to be deposited with a custodian for The Depository Trust Company and/or a common depositary for Clearstream and Euroclear, Luxembourg upon the Shelf Registration Statement Effective Date; and 
 

	
             
 	
            (ii)
 	
            will incorporate such other changes as are necessary to comply with the U.S. Trust Indenture Act of 1939, as amended (the “TIA”);and 
 

	
             
 	
            (iii)
 	
            is eligible for qualification under the TIA. 
 

On completion of the Exchange Offer, the Issuer shall procure the delivery of a legal opinion to the trustee of the Exchange Indenture from the Issuer’s United States legal counsel, that the Exchange Notes and the Exchange Indenture are legal, valid, binding and enforceable obligations of the Issuer and that the Global Notes will be, on due execution, authentication and delivery, legal, valid, binding 

 

	
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and enforceable obligations of the Issuer. On the Shelf Registration Statement Effective Date, the Issuer shall procure the delivery of the duly executed Global Note(s) to a custodian for The Depository Trust Company and/or a common depositary for  Euroclear and Clearstream, Luxembourg, as applicable, and shall otherwise comply with its obligations under the Registration Rights Agreement.

The Exchange Offer shall comply with all applicable tender offer rules and regulations under the U.S. Securities Exchange Act of 1934, as amended, and other applicable laws.

	
            7.
 	
            Interest
 

	
            (a)
 	
            Interest commencement and rate:  The Notes bear interest from the Issue Date at the Rate of Interest payable in arrear on each Interest Payment Date, subject as provided in Condition 9 (Payments).
 

	
            (b)
 	
            Cessation of interest accrual:  Each Note will cease to bear interest from the due date for redemption, subject as provided in Condition 7(c) (Interest - Principal Amount not paid on due date), Condition 15(d) (Rights Arising on Conversion - Interest) and Condition 15(e) (Rights Arising on Conversion - Interest upon conversion due to early redemption).
 

	
            (c)
 	
            Principal Amount not paid on due date:  If, upon due presentation of any Note on the due date for redemption, payment of principal is improperly withheld or refused, such Note will continue to bear interest at the Rate of Interest (both before and after judgment) until the Relevant Date.
 

	
            (d)
 	
            Interest amount:  The amount of interest payable on each Interest Payment Date shall be U.S.$ 5,000 in respect of each Note of U.S.$ 100,000 denomination. If interest is required to be paid in respect of a Note on any other date, it shall be calculated by applying the Rate of Interest to the principal amount of such Note, multiplying the product by the relevant Day Count Fraction and rounding the resulting figure to the nearest cent (half a cent being rounded upwards), where “Day Count Fraction “ means, in respect of any period, the number of days in the relevant period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with twelve 30-day months).
 

	
            8.
 	
            Redemption and Purchase
 

	
            (a)
 	
            Scheduled redemption:  Unless previously redeemed, converted, or purchased and cancelled, the Notes will be redeemed at a price equal to 107.2 per cent. of its principal amount on the Maturity Date, subject as provided in Condition 9 (Payments).
 

	
            (b)
 	
            Redemption at the option of Noteholders:  The Issuer shall, at the option of the holder of any Note, redeem such Note:
 

	
             
 	
            (i)
 	
            in the event that the Initial Shelf Registration Statement has not been filed on or prior to the Filing Deadline Date, on any day following the Filing Deadline Date until, but excluding, the Shelf Registration Statement Filing Date (the “First Put Exercise Period”) at a price equal to 110 per cent. of its principal amount together with interest accrued but unpaid to such date; or
 

	
             
 	
            (ii)
 	
            in the event that the Shelf Registration Statement Effective Date has not occurred, on any day following the anniversary of the Issue Date (the “Anniversary”) until, but excluding, earlier of the day that is 45 days after the Anniversary or the Shelf Registration Statement Effective Date ( the “Second Put Exercise Period”) at a price equal to 110 per cent. of its principal amount together with interest accrued but unpaid to such date; or
 

	
             
 	
            (iii)
 	
            on 13 July 2010 (the “Third Put Date” “) at a price equal to 104 per cent. of its principal amount together with interest accrued but unpaid to such date.
 

In order to exercise the option contained in this Condition 8(b)(i) or Condition 8(b)(ii), the holder of a Note must, during the First Put Exercise Period or the Second Put Exercise Period, as applicable, 

 

	
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deposit with any Paying and Conversion Agent such Note Certificate and a duly completed put option notice (a “Put Option Notice “) in the form obtainable from any Paying and Conversion Agent. 

In order to exercise the option contained in this Condition 8(b)(iii) the holder of a Note must, not less than 30 nor more than 60 days before the relevant Put Settlement Date, deposit with any Paying and Conversion Agent such Note Certificate and a duly completed Put Option Notice.

The Paying and Conversion Agent with which a Note is so deposited shall deliver a duly completed receipt for such Note (a “Put Option Receipt “) to the depositing Noteholder. No Note, once deposited with a duly completed Put Option Notice in accordance with this Condition 8(b), may be withdrawn; provided, however, that if, prior to the relevant Put Settlement Date, any such Note becomes immediately due and payable or, upon due presentation of any such Note on the relevant Put Settlement Date, payment of the redemption moneys is improperly withheld or refused, the relevant Paying and Conversion Agent shall mail notification thereof to the depositing Noteholder at such address as may have been given by such Noteholder in the relevant Put Option Notice and shall hold such Note at its
Specified Office for collection by the depositing Noteholder against surrender of the relevant Put Option Receipt. For so long as any outstanding Note is held by a Paying and Conversion Agent in accordance with this Condition 8(b), the depositor of such Note and not such Paying and Conversion Agent shall be deemed to be the holder of such Note for all purposes. Should a holder of any Note redeem such Note in accordance with this Condition 8(b), the Issuer shall give notice to Noteholders in accordance with Condition 45 (Notices).

The Issuer shall give notice to the Noteholders as soon as practicable following such event of the Shelf Registration Statement Filing Date and the Shelf Registration Statement Effective Date, in accordance with Condition 45 (Notices) and, in the absence of such notice, the Shelf Registration Statement Filing Date and the Shelf Registration Statement Effective Date shall be deemed not to have occurred for the purposes of this Condition 8(b).

	
            (c)
 	
            Redemption for tax reasons:  The Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 45 nor more than 60 days’ notice to the Noteholders (which notice shall be irrevocable), at their principal amount, together with accrued but unpaid interest to the date fixed for redemption, if:
 

	
             
 	
            (i)
 	
            the Issuer has or will become obliged to pay additional amounts in excess of any payable on the Issue Date (the “Excess Additional Amounts”) as provided or referred to in Condition 10 (Taxation) as a result of any change in, or amendment to, the laws or regulations of the United States or the Republic of Kazakhstan or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after 13 July 2007; and
 

	
             
 	
            (ii)
 	
            such obligation cannot be avoided by the Issuer taking reasonable measures available to it;
 

provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts if a payment in respect of the Notes were then due.

Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Trustee:

	
             
 	
            (A)
 	
            a certificate signed by two directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred; and
 

	
             
 	
            (B)
 	
            an opinion, in form and substance satisfactory to the Trustee, of independent legal advisers of internationally recognised standing to the effect that the Issuer has or 
 

 

	
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will become obliged to pay such additional amounts as a result of such change or amendment.

The Trustee shall be entitled to accept such certificate and opinion as sufficient evidence of the satisfaction of the circumstances set out in (i) and (ii) above without need of further enquiry and such certification and opinion (in form and substance satisfactory to the Trustee) shall be conclusive and binding on the Noteholders.

Upon the expiry of any such notice as is referred to in this Condition 8(c), the Issuer shall be bound to redeem the Notes in accordance with this Condition 8(c).

Notwithstanding the above, a Noteholder may elect not to accept such redemption in accordance with this Condition 8(c) by giving notice to the Specified Office of any Paying and Conversion Agent within 20 days from publication of the relevant notice by the Issuer. Such Noteholder will continue to receive payments on the Notes but will not be entitled to any Excess Additional Amounts.

	
            (d)
 	
            Redemption at the option of the Issuer:  The Notes may be redeemed at the option of the Issuer in whole, but not in part, at 104 per cent. of their principal amount together with accrued but unpaid interest to the date fixed for redemption:
 

	
             
 	
            (i)
 	
            at any time on or after 13 July 2010, provided that the Closing Market Price of the Shares on each of not less than 20 Exchange Business Days in any period of 30 consecutive Exchange Business Days ending not earlier than the seventh day prior to the date on which the relevant notice of redemption is given by the Issuer to the Noteholders shall have exceeded 130 per cent. of the Conversion Price in effect on such Exchange Business Day; or
 

	
             
 	
            (ii)
 	
            at any time if prior to the date on which the relevant notice of redemption is given by the Issuer less than 10 per cent. in principal amount of the Notes originally issued (including any further notes consolidated and forming a single series with the Notes at such date) remain outstanding.
 

In order to exercise such option the Issuer shall give not less than 30 nor more than 60 days’ notice to the Trustee and the Noteholders (which notice shall be irrevocable and shall oblige the Issuer to redeem the Notes on the date for redemption specified in such notice). Such notice shall specify (i) the date when the relevant redemption will take place and (ii) the last day on which Conversion Rights may be exercised by a Noteholder. Should the Issuer redeem the Notes in accordance with this Condition 8(d), the Issuer shall give notice to Noteholders in accordance with Condition 45 (Notices).

	
            (e)
 	
            Redemption at the option of Noteholders following a Change of Control:  The Issuer shall, at the option of the holder of any Note, redeem such Note on the Change of Control Put Date at a price equal to its Applicable Rate together with accrued but unpaid interest to such date. In order to exercise the option contained in this Condition 8(e), the holder of a Note must, during the Put Option Period, deposit with any Paying and Conversion Agent such Note Certificate and a duly completed put option notice (a “Put Option Notice “) in the form obtainable from any Paying and Conversion Agent. The Paying and Conversion Agent with which a Note is so deposited shall deliver a duly completed receipt for such Note (a “Put Option
Receipt “) to the depositing Noteholder. No Note, once deposited with a duly completed Put Option Notice in accordance with this Condition 8(e), may be withdrawn; provided, however, that if, prior to the Change of Control Put Date, any such Note becomes immediately due and payable or, upon due presentation of any such Note on the Change of Control Put Date, payment of the redemption moneys is improperly withheld or refused, the relevant Paying and Conversion Agent shall mail notification thereof to the depositing Noteholder at such address as may have been given by such Noteholder in the relevant Put Option Notice and shall hold such Note at its Specified Office for collection by the depositing Noteholder against surrender of the relevant Put Option Receipt. For so long as any outstanding Note is held by a Paying and Conversion Agent in accordance with this Condition 8(e), the depositor of such Note and not such Paying and Conversion Agent shall be deemed
to be the holder of such Note for all purposes.
 

 

	
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In this Condition 8(e):

“Change of Control Put Date “ means the date which is the fourteenth day after the last day of the Put Option Period; and

“Put Option Period “ means the period of 60 days starting on the day after the date on which the Issuer gives a Change of Control Event Notice in accordance with Condition 16(d) (Change of Control - Adjustment to the Conversion Price).

	
            (f)
 	
            No other redemption:  The Issuer shall not be entitled to redeem the Notes otherwise than as provided in Condition 8(a) (Redemption and Purchase - Scheduled redemption), Condition 8(b) (Redemption and Purchase - Redemption at the option of Noteholders) Condition 8(c) (Redemption for tax reasons), Condition 8(d) (Redemption and Purchase - Redemption at the option of the Issuer) and Condition 8(e) (Redemption at the option of Noteholders following a Change of Control).
 

	
            (g)
 	
            Purchase:  Neither the Issuer nor any of its Subsidiaries may purchase any Notes in the period of 15 days before any date fixed for redemption of the Notes. Subject thereto, the Issuer or any of its Subsidiaries may at any time purchase Notes in the open market or otherwise and at any price.
 

	
            (h)
 	
            Cancellation:  All Notes so redeemed or purchased by the Issuer or any of its Subsidiaries, and all Notes which are converted, shall be cancelled and may not be reissued or resold.
 

	
            9.
 	
            Payments
 

	
            (a)
 	
            Principal:  Save as provided in Condition 9(c) (Payments - Payments in New York City), payments of principal shall be made upon application by a Noteholder to the Specified Office of the Paying and Conversion Agent no later than the fifteenth day before the due date for such payment and (provided that payment is made in full) surrender (or in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying and Conversion Agent outside the United States by U.S. dollar cheque drawn on, or by transfer to a U.S. dollar account maintained by the payee with, a bank in New York City.
 

	
            (b)
 	
            Interest:  Save as provided in Condition 9(c) (Payments - Payments in New York City), payments of interest shall be made only upon application by a Noteholder to the Specified Office of the Paying and Conversion Agent no later than the fifteenth day before the due date for such payment and (in the case of interest payable on redemption) surrender (or in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying and Conversion Agent outside the United States in the manner described in Condition 9(a) (Payments - Principal).
 

	
            (c)
 	
            Payments in New York City:  Payments of principal or interest may be made at the Specified Office of a Paying Agent in New York City if (i) the Issuer has appointed Paying Agents outside the United States with the reasonable expectation that such Paying Agents will be able to make payment of the full amount of the interest on the Notes in U.S. dollars when due, (ii) payment of the full amount of such interest at the offices of all such Paying Agents is illegal or effectively precluded by exchange controls or other similar restrictions and (iii) payment is permitted by applicable United States law.
 

	
            (d)
 	
            Payments subject to fiscal laws:  All payments in respect of the Notes are subject in all cases to any applicable fiscal or other laws and regulations in the place of payment. No commissions or expenses shall be charged to the Noteholders in respect of such payments.
 

	
            (e)
 	
            Payments on business days:  If the due date for payment of any amount in respect of any Note is not a Payment Business Day in the place of presentation, the holder shall not be entitled to payment in such place of the amount due until the next succeeding Payment Business Day in such place and shall not be entitled to any further interest or other payment in respect of any such delay.
 

	
            (f)
 	
            Partial payments:  If a Paying and Conversion Agent makes a partial payment in respect of any Note, the Issuer shall procure that the amount and date of such payment are noted in the Register and, in the 
 

 

	
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case of partial payment upon presentation of a Note Certificate, that a statement indicating the amount and date of such payment is endorsed on the relevant Note Certificate presented to it for payment, such Paying and Conversion Agent will endorse thereon a statement indicating the amount and date of such payment.

	
            (g)
 	
            Interest Record Date:  Each payment in respect of a Note will be made to the person shown as the Holder in the Register at the opening of business in the place of the Registrar’s Specified Office on the fifteenth day before the due date for such payment (the “Record Date “). Where payment in respect of a Note is to be made by cheque, the cheque will be mailed to the address shown as the address of the Holder in the Register at the opening of business on the relevant Interest Record Date.
 

	
            10.
 	
            Taxation
 

	
            (a)
 	
            Taxation:  All payments of principal and interest in respect of the Notes by or on behalf of the Issuer shall be made free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the United States or the Republic of Kazakhstan or any political subdivision thereof or any authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event the Issuer shall pay such additional amounts as will result in receipt by the Noteholders of such amounts after such withholding or deduction as would have been received by them had no
such withholding or deduction been required, except that no such additional amounts shall be payable in respect of any Note:
 

	
             
 	
            (i)
 	
            held by or on behalf of a Noteholder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another Paying and Conversion Agent in a member state of the European Union; or
 

	
             
 	
            (ii)
 	
            held by a Noteholder which is liable to such taxes, duties, assessments or governmental charges in respect of such Note by reason of its having some connection with the United States or the Republic of Kazakhstan other than the mere holding of the Note; or
 

	
             
 	
            (iii)
 	
            where (in the case of a payment of principal or interest on redemption) the relevant Note Certificate is surrendered for payment more than 30 days after the Relevant Date except to the extent that the relevant Noteholder would have been entitled to such additional amounts if it had surrendered the relevant Note Certificate on the last day of such period of 30 days; or
 

	
             
 	
            (iv)
 	
            where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to confirm to, such Directive. 
 

In these Conditions, “Relevant Date” means whichever is the later of (1) the date on which the payment in question first becomes due and (2) if the full amount payable has not been received by the Principal Paying and Conversion Agent or the Trustee on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the Noteholders.

Any reference in these Conditions to principal or interest shall be deemed to include any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Condition 10 or any undertaking given in addition to or in substitution of this Condition 10 pursuant to the Trust Deed.

If the Issuer becomes subject at any time to any taxing jurisdiction other than the United States or the Republic of Kazakhstan references in these Conditions to the United States or (as the case may be) 

 

	
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the Republic of Kazakhstan shall be construed as references to the United States or (as the case may be) the Republic of Kazakhstan and/or such other jurisdiction.

	
            11.
 	
            Events of Default
 

If any of the following events occurs, then the Trustee at its discretion may and, if so requested in writing by holders of at least one quarter of the aggregate principal amount of the outstanding Notes or if so directed by an Extraordinary Resolution, shall, provided that it has been indemnified and/or secured to its satisfaction, give written notice to the Issuer declaring the Notes to be immediately due and payable, whereupon they shall become immediately due and payable at their principal amount together with accrued but unpaid interest without further action or formality:

	
            (a)
 	
            Non-payment:  the Issuer fails to pay any principal amount due in respect of the Notes within 3 business days of the due date for payment thereof or fails to pay any amount of interest due in respect of the Notes within 7 business days of the due date for payment thereof; or
 

	
            (b)
 	
            Breach of other obligations:  the Issuer defaults in the performance or observance of any of its other obligations under or in respect of the Notes or the Trust Deed and such default (i) is, in the opinion of the Trustee, incapable of remedy or (ii) being a default which is, in the opinion of the Trustee, capable of remedy, remains unremedied for 30 days after the Trustee has given written notice thereof to the Issuer; or 
 

	
            (c)
 	
            Cross-default of Issuer or Material Subsidiary:
 

	
             
 	
            (i)
 	
            any Indebtedness of the Issuer or any of its Material Subsidiaries is not paid when due or (as the case may be) within any originally applicable grace period; 
 

	
             
 	
            (ii)
 	
            any such Indebtedness becomes (or becomes capable of being declared) due and payable prior to its stated maturity otherwise than at the option of the Issuer or (as the case may be) the relevant Material Subsidiary or (provided that no event of default, howsoever described, has occurred) any person entitled to such Indebtedness; or 
 

	
             
 	
            (iii)
 	
            the Issuer or any of its Material Subsidiaries fails to pay any amount payable by it under any Guarantee of any Indebtedness when due or (as the case may be) within any originally applicable grace period;
 

provided that the amount of Indebtedness referred to in sub-paragraph (i) and/or sub-paragraph (ii) above and/or the amount payable under any Guarantee referred to in sub-paragraph (iii) above in the aggregate exceeds U.S.$ 5,000,000 (or its equivalent in any other currency or currencies as determined by the Trustee); 

	
            (d)
 	
            Unsatisfied judgment:  one or more judgment(s) or order(s) for the payment of any amount is rendered against the Issuer or any of its Material Subsidiaries and continue(s) unsatisfied and unstayed for a period of 30 days after the date(s) thereof or, if later, the date therein specified for payment provided that the amount which is the subject of any such judgment(s) or order(s) in the aggregate exceeds U.S.$ 5,000,000 (or its equivalent in any other currency or currencies as determined by the Trustee); or
 

	
            (e)
 	
            Security enforced:  a secured party takes possession, or a receiver, manager or other similar officer is appointed, of the whole or any substantial part of the undertaking, assets and revenues of the Issuer or any of its Material Subsidiaries; or
 

	
            (f)
 	
            Insolvency, etc.:  (i) the Issuer or any of its Material Subsidiaries is declared insolvent or is declared unable to pay its debts as they fall due, (ii) an administrator or liquidator of the Issuer or any of its Material Subsidiaries or the whole or any substantial part of the undertaking, assets and revenues of the Issuer or any of its Material Subsidiaries is appointed, (iii) the Issuer or any of its Material Subsidiaries takes any action for a reduction, reorganisation or deferment of any of its obligations or 
 

 

	
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makes a general assignment or an arrangement or composition with or for the benefit of its creditors or declares a moratorium in respect of any of its Indebtedness or any Guarantee of any Indebtedness given by it or (iv) without prejudice to Condition 6(d), the Issuer or any of its Material Subsidiaries ceases or publicly announces its intention to cease to carry on all or any substantial part of its business (otherwise than, in the case of a Material Subsidiary of the Issuer, for the purposes of or pursuant to an amalgamation, merger, reorganisation or restructuring whilst solvent); or

	
            (g)
 	
            Winding up, etc.:  an order is made or an effective resolution is passed for the winding up, liquidation or dissolution of the Issuer or any of its Material Subsidiaries (otherwise than, in the case of a Material Subsidiary of the Issuer, for the purposes of or pursuant to an amalgamation, merger, reorganisation or restructuring whilst solvent); or
 

	
            (h)
 	
            Analogous event:  any event occurs which under the laws of the state of Nevada or the United States has an analogous effect to any of the events referred to in paragraphs (d) (Unsatisfied judgment) to (g) (Winding up, etc.) above; or
 

	
            (i)
 	
            Failure to take action, etc.:  any action, condition or thing at any time required to be taken, fulfilled or done in order (i) to enable the Issuer lawfully to enter into, exercise its rights and perform and comply with its obligations under and in respect of the Notes or the Trust Deed, (ii) to ensure that those obligations are legal, valid, binding and enforceable and (iii) to make the Notes and the Trust Deed admissible in evidence in the courts of the state of Utah and of the United States is not taken, fulfilled or done; or
 

	
            (j)
 	
            Unlawfulness:  it is or will become unlawful for the Issuer to perform or comply with any of its obligations under or in respect of the Notes or the Trust Deed.
 

The Equity Option

	
            12.
 	
            Conversion
 

	
            (a)
 	
            Conversion right:  The holder of each Note has the right to convert such Note into fully-paid Shares at any time during the Conversion Period.
 

	
            (b)
 	
            Conversion Period:  The “Conversion Period “ in respect of any Note shall be the period beginning on and including the first to occur of (X) the tenth New York business day following the Shelf Registration Statement Effective Date and (Y) 13 July 2008 and ending on and including the earlier to occur of:
 

	
             
 	
            (i)
 	
            the close of business (in the place where the Conversion Notice in respect of the Note is deposited) on 28 June 2012; and
 

	
             
 	
            (ii)
 	
            if such Note shall have been called for redemption before the Maturity Date, the close of business (in the place where the Conversion Notice in respect of the Note is deposited) on the day which is 10 days before the date fixed for redemption thereof,
 

provided, however, that:

	
             
 	
            (A)
 	
            if the Issuer shall default in making payment in full in respect of such Note on the date fixed for redemption thereof, the relevant Conversion Period shall continue up to and including the date upon which the full amount of the moneys payable in respect of such Note has been duly received by the Trustee or the Principal Paying and Conversion Agent and notice of such receipt has been given to the Noteholders in accordance with Condition 45 (Notices) or, if earlier, up to and including 28 June 2012; and 
 

	
             
 	
            (B)
 	
            in any such case, if the last day of the Conversion Period would otherwise be a day which is not a business day in the place where the Conversion Notice in respect of 
 

 

	
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the Note is deposited, the last day of the Conversion Period shall be the immediately preceding business day in such place.

In any event the Conversion Period shall end on the date of any notice from the Trustee declaring the Notes to be immediately due and payable pursuant to Condition 11 (Events of Default).

Conversion Rights are not exercisable in respect of any Note deposited for redemption under Condition 8(d) (Redemption and purchase - Redemption at the option of the Issuer).

	
            (c)
 	
            Conversion ratio:  The number of Shares to be issued upon exercise of the Conversion Right attaching to any Note shall be determined by dividing the principal amount of the Note by the Conversion Price in effect on the Conversion Date. 
 

	
            (d)
 	
            Conversion Price:  The Conversion Price in effect on the Issue Date is U.S.$ 7.2094. The Conversion Price in effect on any subsequent date shall be the Conversion Price in effect on the Issue Date subject to any subsequent adjustment in accordance with these Conditions and the expression “Conversion Price “ shall be construed accordingly. Notwithstanding any provision of the Conditions which permits or requires an adjustment of the Conversion Price, no adjustment of the Conversion Price shall be made that would reduce the adjusted Conversion price to a price that is less than the Minimum Conversion Price. Any such adjustment will result in the Conversion Price being set at the Minimum Conversion Price.
 

	
            (e)
 	
            No Shares set aside:  Conversion Rights are not exercisable in respect of any specific Shares and no Shares have been or will be charged, placed in custody or otherwise set aside to secure or satisfy the obligations of the Issuer in respect of the Conversion Rights.
 

	
            (f)
 	
            Fractions of a Share:  Fractions of a Share will not be issued on conversion. However, if more than one Note is to be converted at any one time by the same Noteholder such that the Shares to be issued upon conversion thereof are to be registered in the same name, the number of Shares which shall be issued upon conversion thereof shall be calculated on the basis of the aggregate principal amount of the Notes so to be converted. If a fraction of a Share would otherwise fall to be issued upon conversion, the Issuer shall make or procure that there is made, on or before the seventh London business day after the relevant Conversion Date, a cash payment equal to such fraction of the Current Market Price per Share as at the relevant Conversion Date by U.S. dollar cheque drawn on, or by transfer to a U.S.
dollar account maintained by the payee with, a bank in New York City in accordance with instructions given in the relevant Conversion Notice.
 

	
            13.
 	
            Procedure for Conversion
 

	
            (a)
 	
            Deposit of Note:  To exercise the Conversion Right attaching to any Note, the Noteholder must:
 

	
             
 	
            (i)
 	
            complete, execute and deposit at the Noteholder’s own expense during normal business hours on any business day during the Conversion Period at the Specified Office of any Paying and Conversion Agent a Conversion Notice (in duplicate); 
 

	
             
 	
            (ii)
 	
            at the same time deposit the relevant Note at the Specified Office of the same Paying and Conversion Agent; and
 

	
             
 	
            (iii)
 	
            pay to the Issuer (or to such person as the Issuer may direct) any applicable Conversion Expenses.
 

A Conversion Notice once deposited shall not be withdrawn without the consent in writing of the Issuer.

	
            (b)
 	
            Conversion Expenses:  The Issuer will pay all stamp, issue, registration or other similar taxes and duties (if any) arising in the United States on the issue of Shares on conversion of the Notes, their transfer and delivery to or to the order of the converting Noteholder (subject as provided in Condition 
 

 

	
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14 (Settlement)), any expenses of obtaining a listing for such Shares on the American Stock Exchange and all charges of the Paying and Conversion Agents in connection therewith as provided in the Agency Agreement. Subject thereto, as conditions precedent to conversion, the Noteholder must pay to the Issuer (or to such person as the Issuer may direct) all stamp, issue, registration or other similar taxes and duties (if any) (“Conversion Expenses “) arising on conversion which may be payable:

	
             
 	
            (i)
 	
            in the country in which the Specified Office of the relevant Paying and Conversion Agent is located (if not the United States); and 
 

	
             
 	
            (ii)
 	
            in any other jurisdiction,
 

as a result of the issue, transfer or delivery of Shares or any other property or cash upon conversion to or to the order of the converting Noteholder.

	
            (c)
 	
            U.S. certification:  Upon exercising the Conversion Right attaching to any Note, the Noteholder shall be required to represent and agree in the Conversion Notice that at the time of execution and deposit of such Conversion Notice neither it nor any person who has the beneficial interest in that Note is in the United States or a U.S. person (within the meaning of Regulation S) and it, or such person, if applicable, purchased or acquired such Note, or the beneficial interest therein, in a transaction made in accordance with (i) Rule 903 or (ii) Rule 904 and 905 of Regulation S. No Shares will be issued to a Noteholder unless the Noteholder satisfies the foregoing conditions.
 

	
            (d)
 	
            Conversion Date:  The conversion date in respect of a Note (the “Conversion Date “) shall be the New York business day following the satisfaction of the conditions specified in Condition 13(a) (Procedure for Conversion - Deposit of Note).
 

	
            (e)
 	
            Specified account:  Upon exercise of Conversion Rights, a Noteholder shall in the relevant Conversion Notice, specify a U.S. dollar account with a bank in New York City to which any cash amount payable on or in respect of the exercise of Conversion Rights by that Noteholder shall be credited and the Issuer shall pay such sum to the relevant Noteholder in accordance with any such directions.
 

	
            14.
 	
            Settlement
 

Shares to be issued on conversion of the Notes will be issued in certificated form and a certificate in respect thereof will be dispatched by mail free of charge (but uninsured and at the risk of the person entitled thereto) to the relevant Noteholder or as it may direct in the relevant Conversion Notice within 28 days following the relevant Conversion Date.

	
            15.
 	
            Rights Arising on Conversion
 

	
            (a)
 	
            Rights in respect of Shares issued upon conversion:  Shares issued upon exercise of Conversion Rights will be issued fully paid, free from any liens, charges, encumbrances, pre-emptive rights or other third-party rights and, subject as provided in Conditions 15(b) (Rights Arising on Conversion - Dividends and other distributions) and (c) (Rights Arising on Conversion - Voting rights):
 

	
             
 	
            (i)
 	
            such Shares will rank pari passu in all respects with all other Shares in issue on the Conversion Date; and
 

	
             
 	
            (ii)
 	
            the holders of such Shares will be treated by the Issuer as Shareholders for all purposes with effect from and including the Conversion Date.
 

	
            (b)
 	
            Dividends and other distributions:  Shares issued upon exercise of Conversion Rights will rank pari passu in respect of Dividends and other distributions declared, paid or made, or rights granted, with all other Shares in issue on the Conversion Date except that such Shares will not rank for any Dividend or other distribution declared, paid or made on, or rights granted in respect of, the Shares for which the Record Date precedes the Conversion Date. 
 

 

	
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            (c)
 	
            Voting rights:  Shares issued upon exercise of Conversion Rights will rank pari passu in respect of voting rights with all other Shares in issue on the Conversion Date except that they will not rank for any voting rights where the entitlement to voting rights accrues to Shareholders by reference to a Record Date which precedes the Conversion Date.
 

	
            (d)
 	
            Interest:  Save as provided in Condition 15(e) (Rights Arising on Conversion - Interest upon conversion due to early redemption), upon conversion of any Note:
 

	
             
 	
            (i)
 	
            if the Conversion Date falls on an Interest Payment Date, the Noteholder shall not be entitled to receive the payment of interest otherwise due on such Interest Payment Date; and
 

	
             
 	
            (ii)
 	
            in any other case, the Noteholder shall cease to be entitled to any interest accrued on the relevant Note since the Interest Payment Date immediately preceding such Conversion Date (or, if such Conversion Date falls on or before the first Interest Payment Date, since the Issue Date),
 

and, in either case, no payment or adjustment shall be made on conversion for any such interest accrued since the Interest Payment Date immediately preceding such Conversion Date (or, if such Conversion Date falls on or before the first Interest Payment Date, since the Issue Date). 

	
            (e)
 	
            Interest upon conversion due to early redemption:  If:
 

	
             
 	
            (i)
 	
            any notice requiring the redemption of any Notes is given pursuant to Condition 8(d) (Redemption and Purchase - Redemption at the option of the Issuer) on or after (or within 14 days before) the Record Date (the “Relevant Record Date “) in respect of any dividend payable in respect of the Shares;
 

	
             
 	
            (ii)
 	
            such notice specifies a date for redemption falling on or before (or within 14 days after) the Interest Payment Date next following the Relevant Record Date; and
 

	
             
 	
            (iii)
 	
            the Conversion Date in respect of any Note the subject of any such notice (a “Relevant Note “) falls after the Relevant Record Date and on or before the Interest Payment Date next following the Relevant Record Date,
 

then interest shall accrue on each Relevant Note from and including the preceding Interest Payment Date (or, if the relevant Conversion Date falls on or before the first Interest Payment Date, from and including the Issue Date) to but excluding the Relevant Record Date. Any such interest shall be paid not later than 14 days after the relevant Conversion Date by U.S. dollar cheque drawn on, or by transfer to a U.S. dollar account maintained by the payee with, a bank in New York City, in accordance with instructions given by the relevant Noteholder.

Adjustments to the Conversion Price

	
            16.
 	
            Change of Control
 

	
            (a)
 	
            Offer:  If an Offer is made in respect of the Shares, the Issuer shall give notice of such Offer to the Noteholders, with a copy to the Trustee, at the same time as any notice thereof is sent to its Shareholders (or as soon as practicable thereafter) indicating that details concerning such Offer may be obtained from the Specified Offices of the Paying and Conversion Agents. 
 

	
            (b)
 	
            Extension of Offer to Noteholders:  Where an Offer in respect of the Shares has been recommended by the board of directors of the Issuer, or where such an Offer has become or been declared unconditional in all respects, the Issuer shall use its reasonable endeavours to procure that the Offer is extended to the holders of any Shares issued during the period in which such Offer is open for acceptance (as determined in accordance with any relevant laws, rules, regulations and voluntary codes applicable to such Offer) as a result of the exercise of Conversion Rights.
 

 

	
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            (c)
 	
            Change Of Control Event:  In these Conditions, a “Change of Control Event “ occurs if an Offer in respect of the Shares, for which the consideration is or can be received wholly or substantially in cash, has become or been declared unconditional in all respects and the Issuer becomes aware that the right to cast more than 50 per cent. of the votes which may ordinarily be cast on a poll at a general meeting of the Shareholders has or will become unconditionally vested in the offeror and/or any associates(s) of the offeror, or an event occurs which has a like or similar effect.
 

	
            (d)
 	
            Adjustment to the Conversion Price:  If and whenever a Change of Control Event shall occur the Issuer shall forthwith give notice to the Noteholders (a “Change of Control Event Notice “), with a copy to the Trustee, of such event and, in relation to each Note for which the Conversion Date occurs after the date of such Change of Control Event Notice but on or prior to the 60th day following the date of such Change of Control Event Notice, the Conversion Price shall be the product of (1) the Conversion Price that would otherwise apply on such Conversion Date in the absence of a Change of Control Event and (2) the percentage determined in accordance with the following table:
 

	
            Conversion Date
 	
            Percentage (%)
 
	
            On or before 13 July 2008 but after the Shelf Registration Statement Effective Date
 	
            81.6
 
	
            Thereafter, but on or before 13 July 2009
 	
            86.2
 
	
            Thereafter, but on or before 13 July 2010
 	
            90.9
 
	
            Thereafter, but on or before 13 July 2011
 	
            95.5
 
	
            Thereafter, and until the Maturity Date
 	
            100.0
 
	
             
 	
             
 

 

provided, however, that if, as a result of the application of the foregoing provisions of this Condition 16(d), the Conversion Price would be adjusted to a price, then the Conversion Price shall be the Minimum Conversion Price.

	
            (e)
 	
            Change of Control Event Notice:  Any Change of Control Event Notice shall inform Noteholders of their entitlement to exercise the Conversion Right in accordance with these Conditions and shall specify:
 

	
             
 	
            (i)
 	
            all information material to Noteholders concerning the Change of Control Event; 
 

	
             
 	
            (ii)
 	
            the Conversion Price in relation to each Note for which the Conversion Date occurs on the date of such notice to the Noteholders; and 
 

	
             
 	
            (iii)
 	
            the Conversion Price in relation to each Note during the period ending on or prior to the 60th day following the date of such notice to the Noteholders; and
 

	
             
 	
            (iv)
 	
            the amount of the Change of Control Event Premium pursuant to Condition 38 (Change of Control Event Premium).
 

	
            17.
 	
            Dividends
 

	
            (a)
 	
            Adjustment Event:  If and whenever the Issuer shall distribute any Dividend to the Shareholders, the Conversion Price shall be subject to adjustment in accordance with this Condition 17.
 

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 17, the “Effective Date “ means the date on which the relevant Dividend is actually distributed. 
 

	
            (c)
 	
            Adjustment to the Conversion Price:  If and whenever the Issuer shall distribute any Dividend to the Shareholders, in relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:
 

 

	
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where:

	
             
 	
            A
 	
            is the Current Market Price of one Share (expressed in U.S. dollars) on the Exchange Business Day immediately preceding the date of the first public announcement of the terms of such Dividend; and
 

	
             
 	
            B
 	
            is the Fair Market Value on the date of such announcement of the portion of the Dividend attributable to one Share.
 

	
            (d)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 17 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions.
 

	
            18.
 	
            Bonus Issues
 

	
            (a)
 	
            Adjustment event:  If and whenever the Issuer shall make any Bonus Issue, the Conversion Price shall be subject to adjustment in accordance with this Condition 18.
 

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 18, the “Effective Date “ means the date of issue of the relevant Shares.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

where:

	
             
 	
            A
 	
            =
 	
            the number of Shares in issue immediately before the issue of such Shares; and
 

	
             
 	
            B
 	
            =
 	
            the number of Shares in issue immediately after the issue of such Shares.
 

	
            (d)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 18 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions.
 

	
            19.
 	
            Consolidation or Subdivision
 

	
            (a)
 	
            Adjustment event:  If and whenever there shall be any consolidation or subdivision of the Shares, the Conversion Price shall be subject to adjustment in accordance with this Condition 19.
 

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 19, the “Effective Date “ means the date on which such subdivision or consolidation becomes effective.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

	
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where:

	
             
 	
            A
 	
            =
 	
            the number of Shares in issue immediately before such alteration; and
 

	
             
 	
            B
 	
            =
 	
            the number of Shares in issue immediately after such alteration.
 

	
            (d)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 19 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions.
 

	
            20.
 	
            Shares, Rights and Share-Related Securities Issued to Shareholders
 

	
            (a)
 	
            Adjustment event:  If and whenever the Issuer shall issue, grant or offer Shares, Share-Related Securities, Rights in respect of Shares or Rights in respect of Share-Related Securities to all or substantially all of the Shareholders as a class by way of rights as a result of which, in each case, Shareholders have the right to acquire Shares at a Consideration per Share which is less than the Current Market Price of the Shares on the Exchange Business Day immediately preceding the date of the first public announcement of such issue, grant or offer, the Conversion Price shall be subject to adjustment in accordance with this Condition 20.
 

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 20, the “Effective Date “ means the first date on which the Shares are traded ex-rights, ex-warrants or ex-options on the American Stock Exchange.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

  

where:

	
            A
 	
            =
 	
            the number of Shares in issue on the Exchange Business Day immediately preceding the date of such announcement;
 
	
            B
 	
            =
 	
            the number of Shares which the Aggregate Consideration would purchase at such Current Market Price; and
 
	
            C
 	
            =
 	
            (1) in the case of an issue, grant or offer of Shares, the number of Shares comprised in the issue, grant or offer; or
 
	
             
 	
             
 	
            (2) in the case of an issue, grant or offer of Share-Related Securities or Rights, the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities or Rights at the initial price or rate.
 

 

	
            (d)
 	
            Formula:  If on the date (the “Specified Date “) of issue, grant or offer of the relevant Share-Related Securities, Rights in respect of Shares or Rights in respect of Share Related Securities to all or substantially all of the Shareholders as a class by way of rights the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share Related Securities or Rights is to be determined 
 

 

	
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by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Condition 20, “C “ shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.

	
            (e)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 20 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions. 
 

	
            21.
 	
            Issue of Other Securities to Shareholders
 

	
            (a)
 	
            Adjustment event:  If and whenever the Issuer shall issue any securities (other than Shares, Share-Related Securities, Rights in respect of Shares or Rights in respect of Share-Related Securities) to all or substantially all of the Shareholders as a class by way of rights or the Issuer shall issue or grant any Rights in respect of any securities (other than Shares, Share-Related Securities, Rights in respect of Shares or Rights in respect of Share-Related Securities) or assets to all or substantially all of the Shareholders as a class, the Conversion Price shall be subject to adjustment in accordance with this Condition 21.
 

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 21, “Effective Date “ means the first date on which the Shares are traded ex-rights, ex-warrants or ex-options on the American Stock Exchange.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

where:

	
            A
 	
            =
 	
            the Current Market Price of one Share on the Exchange Business Day immediately preceding the date of the first public announcement of the terms of such issue or grant; and
 
	
            B
 	
            =
 	
            the Fair Market Value on the date of such announcement of the  portion of the rights attributable to one Share.
 

	
            (d)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 21 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions. 
 

	
            22.
 	
            Issues of Shares at Below Current Market Price
 

	
            (a)
 	
            Adjustment event:  If and whenever the Issuer shall issue, wholly for cash, any Shares or the Issuer shall issue or grant, wholly for cash or for no consideration, Rights in respect of Shares or Rights in respect of Share-Related Securities as a result of which, in each case, persons to whom the Shares or Rights are issued or granted have the right to acquire Shares at a Consideration per Share which is less than the Current Market Price of the Shares on the Exchange Business Day immediately preceding the date of the first public announcement of such issue or grant, the Conversion Price shall be subject to adjustment in accordance with this Condition 22. However, if any such issue or grant also falls within the terms of Condition 22 (Shares, Rights and Share-Related Securities
Issued to Shareholders) or constitutes an issue of Shares consequent upon the exercise of Conversion Rights or 
 

 

	
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on the exercise of any other rights of conversion into, or exchange or subscription for, Shares, the Conversion Price shall not be subject to adjustment in accordance with this Condition 22.

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 22, the “Effective Date “ means the date of issue of such Shares or, as the case may be, the issue or grant of such Rights.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

where:

	
            A
 	
            =
 	
            the number of Shares in issue on the Exchange Business Day immediately preceding the date of such announcement;
 
	
            B
 	
            =
 	
            the number of Shares which the Aggregate Consideration would purchase at such Current Market Price; and
 
	
            C
 	
            =
 	
            (1) in the case of an issue of Shares, the number of Shares issued; or
 
	
             
 	
             
 	
            (2) in the case of an issue or grant of Rights, the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares and, if applicable, Share-Related Securities pursuant to the terms of such Rights and, if applicable, Share-Related Securities at the initial price or rate,
 

provided, however, that if any such adjustment would otherwise result in the Conversion Price being less than the Minimum Conversion Price, then the Conversion Price as adjusted pursuant to this Condition 22 shall be the Minimum Conversion Price.

	
            (d)
 	
            Formula:  If on the date (the “Specified Date “) of issue or grant of the relevant Rights in respect of Shares or Rights in respect of Share-Related Securities the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares and, if applicable, Share-Related Securities pursuant to the terms of such Rights and, if applicable, Share-Related Securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Condition 22, “C “ shall be determined by the application of such formula or variable
feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.
 

	
            (e)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 22 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions. 
 

	
            23.
 	
            Share-Related Securities Issued Other than to Shareholders 
 

	
            (a)
 	
            Adjustment event:  If and whenever the Issuer or (pursuant to arrangements with the Issuer) any other person or entity shall issue, wholly for cash or for no consideration, any Share-Related Securities or shall grant to any existing securities so issued such rights as to make such securities Share-Related Securities as a result of which, in each case, persons to whom the Share-Related Securities or such rights are issued or granted have the right to acquire Shares at a Consideration per Share which is less than the Current Market Price of the Shares on the Exchange Business Day immediately preceding the date of the first public announcement of the terms of issue of such Share-Related Securities or the 
 

 

	
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terms of such grant, the Conversion Price shall be subject to adjustment in accordance with this Condition 23. However, if any such issue or grant also falls within the terms of Condition 20 (Shares, Rights and Share-Related Securities Issued to Shareholders), Condition 21 (Issue of Other Securities to Shareholders) or Condition 22 (Issues of Shares at Below Current Market Price), the Conversion Price shall not be subject to adjustment in accordance with this Condition 23.

	
            (b)
 	
            Effective Date:  For the purposes of this Condition 23 the “Effective Date “ means the date of issue of the Share-Related Securities or the grant of the relevant rights.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

where:

	
            A
 	
            =
 	
            the number of Shares in issue on the Exchange Business Day immediately preceding the date of such announcement;
 
	
            B
 	
            =
 	
            the number of Shares which the Aggregate Consideration would purchase at such Current Market Price; and
 
	
            C
 	
            =
 	
            the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities at the initial price or rate.
 

provided, however, that if any such adjustment would otherwise result in the Conversion Price being less than the Minimum Conversion Price, then the Conversion Price as adjusted pursuant to this Condition 23 shall be the Minimum Conversion Price.

	
            (d)
 	
            Formula:  If on the date (the “Specified Date “) of issue of the relevant Share-Related Securities or date of grant of such rights the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Condition 23, “C “ shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such
subscription, purchase or acquisition had taken place on the Specified Date.
 

	
            (e)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 23 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions.
 

	
            24.
 	
            Amendment of Terms of Rights or Share-Related Securities
 

	
            (a)
 	
            Adjustment event:  If and whenever the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of any Rights or Share-Related Securities are amended (other than in accordance with their terms of issue (including terms as to adjustment of such rights)) so that following such amendment the Consideration per Share is (1) reduced and (2) less than the Current Market Price of the Shares on the Exchange Business Day immediately preceding the date of the first public announcement of the proposals for such amendment, the Conversion Price shall be subject to adjustment in accordance with this Condition 24.
 

 

	
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            (b)
 	
            Effective Date:  For the purposes of this Condition 24, “Effective Date “ means the date of amendment of such rights.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

where:

	
            A
 	
            =
 	
            is the number of Shares in issue on the Exchange Business Day immediately preceding the date of such announcement;
 
	
            B
 	
            =
 	
            is the number of Shares which the Aggregate Consideration (calculated taking account of the amended rights) would purchase at such Current Market Price; and
 
	
            C
 	
            =
 	
            the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Rights or Share-Related Securities at the amended subscription, purchase or acquisition price or rate (but giving credit in such manner as shall be Determined by an Expert to be appropriate for any previous adjustment under Condition 20 (Shares, Rights and Share-Related Securities Issued to Shareholders), Condition 23 (Share-Related Securities Issued Other than to Shareholders) or this Condition 24).
 

provided, however, that if any such adjustment would otherwise result in the Conversion Price being less than the Minimum Conversion Price, then the Conversion Price as adjusted pursuant to this Condition 24 shall be the Minimum Conversion Price.

	
            (d)
 	
            Formula:  If on the date (the “Specified Date “) of such amendment the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Rights or Share-Related Securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Condition 24, “C” shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the
Specified Date.
 

	
            (e)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 24 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions.
 

	
            25.
 	
            Other Arrangements to Acquire Securities
 

	
            (a)
 	
            Adjustment event:  If and whenever the Issuer or (pursuant to arrangements with the Issuer) any other person or entity shall offer any securities in connection with which offer Shareholders as a class are entitled to participate in arrangements whereby such securities may be acquired by them, the Conversion Price shall be subject to adjustment in accordance with this Condition 25. However, if any such offer also causes the Conversion Price to be adjusted within the terms of Condition 20 (Shares, Rights and Share-Related Securities Issued to Shareholders) or Condition 21 (Issue of Other Securities to Shareholders) the Conversion Price shall not be subject to adjustment in accordance with this Condition
25.
 

 

	
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            (b)
 	
            Effective Date:  For the purposes of this Condition 25, the “Effective Date “ means the first date on which the Shares are traded ex-rights on the American Stock Exchange.
 

	
            (c)
 	
            Adjustment to the Conversion Price:  In relation to each Note for which the Conversion Date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:
 

 

where:

	
            A
 	
            =
 	
            the Current Market Price of one Share on the Exchange Business Day immediately preceding the date of the first public announcement of such offer; and
 
	
            B
 	
            =
 	
            the Fair Market Value on the date of such announcement of the  portion of the relevant offer attributable to one Share.
 

	
            (d)
 	
            Effect of adjustment:  The Conversion Price as adjusted pursuant to this Condition 25 shall apply, with effect from and including the Effective Date, to each Note for which the Conversion Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these Conditions.
 

	
            26.
 	
            Other Events; Contemporaneous Events
 

	
            (a)
 	
            Adjustment event:  If the Issuer (after consultation with the Trustee) or the Trustee (after consultation with the Issuer) determines that:
 

	
             
 	
            (i)
 	
            an adjustment should be made to the Conversion Price as a result of one or more events or circumstances not referred to in Condition 17 (Dividends) to Condition 25 (Other Arrangements to Acquire Securities) (even if the relevant event or circumstance is specifically excluded from the operation of Condition 17 (Dividends) to Condition 25 (Other Arrangements to Acquire Securities)); or
 

	
             
 	
            (ii)
 	
            more than one event which gives rise or may give rise to an adjustment to the Conversion Price has occurred or will occur within such a short period of time that a modification to the operation of the adjustment provisions is required in order to give the intended result; or
 

	
             
 	
            (iii)
 	
            one event which gives rise or may give rise to more than one adjustment to the Conversion Price has occurred or will occur such that a modification to the operation of the adjustment provisions is required in order to give the intended result,
 

the Issuer shall, at its own expense, use all reasonable endeavours to procure that such adjustment (if any) to the Conversion Price as is fair and reasonable to take account thereof and the date on which such adjustment should take effect shall be Determined by an Expert. 

	
            (b)
 	
            Effective Date:  Upon such determination, the Issuer and the Trustee shall procure that such adjustment (if any) shall be made and shall take effect in accordance with such determination, provided, however, that an adjustment shall only be made pursuant to this Condition 26 if the relevant Expert is requested to make such a determination not more than 60 days after the date on which the relevant event occurs or circumstances exist.
 

	
            (c)
 	
            Certificate of Expert:  If any doubt shall arise as to any appropriate adjustment to the Conversion Price, the Issuer shall use all reasonable endeavours to procure that the appropriate adjustment shall be Determined by an Expert and a certificate from the relevant Expert as to the appropriate 
 

 

	
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adjustment to the Conversion Price shall, in the absence of manifest error, be conclusive and binding on all concerned.

	
            27.
 	
            Minor Adjustments and No Adjustments
 

	
            (a)
 	
            Rounding and adjustments of less than one per cent:  On any adjustment of the Conversion Price, the resultant Conversion Price, if not an integral multiple of one cent, shall be rounded down to the nearest whole cent. No adjustment shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than one per cent. of the Conversion Price then in effect. Any adjustment not required to be made, and any amount by which the Conversion Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment but such subsequent adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time. 
 

	
            (b)
 	
            Employee share schemes:  No adjustment shall be made to the Conversion Price where Shares or other securities (including rights, warrants or options) are issued, offered, exercised, allotted, appropriated, modified or granted to or for the benefit of employees or former employees (including directors holding or formerly holding executive office) pursuant to any employees’ share scheme or plan or consultants of the Issuer or any Subsidiary or any associated company of the Issuer pursuant to any other share scheme or plan (including a dividend reinvestment plan). 
 

	
            (c)
 	
            Adjustments not permitted by law:  The Conversion Price may not be adjusted so that exercise of the Conversion Right would require Shares to be issued in circumstances not permitted by applicable law.
 

	
            28.
 	
            Adjustments for Conversion near a Record Date 
 

	
            (a)
 	
            Adjustment Event:  If and whenever the Conversion Price is to be adjusted pursuant to any of Condition 17 (Dividends) to Condition 25 (Other Arrangements to Acquire Securities) and the Conversion Date in relation to any Note is either:
 

	
             
 	
            (i)
 	
            after the Record Date for any such issue, distribution, grant or offer as is mentioned in the relevant Condition but before the relevant adjustment becomes effective under the relevant Condition; or
 

	
             
 	
            (ii)
 	
            before the Record Date for any such issue, distribution, grant or offer as is mentioned in the relevant Condition but in circumstances where the relevant Noteholder is unable, by the relevant Record Date, to become duly entitled to the Shares for the purpose of receiving the issue, distribution, grant or offer as is mentioned in the relevant Condition,
 

the Conversion Right attaching to the relevant Note shall be subject to adjustment in accordance with this Condition 28. 

	
            (b)
 	
            Adjustment to the Conversion Right:  Upon the relevant adjustment becoming effective under the relevant Condition the Issuer shall procure that there shall be issued to the converting Noteholder or in accordance with the instructions contained in the relevant Conversion Notice (subject to any applicable exchange control or other laws or other regulations) such additional number of Shares as, together with the Shares issued or to be issued on conversion of the relevant Note, is equal to the number of Shares which would have been required to be issued on conversion of such Note if the relevant adjustment to the Conversion Price had in fact been made and become effective immediately before the relevant Conversion Date.
 

	
            (c)
 	
            Shares in certificated form:  A certificate in respect of such additional Shares will be dispatched by mail free of charge (but uninsured and at the risk of the person entitled thereto) to the relevant Noteholder or as it may direct in the relevant Conversion Notice within 28 days following the relevant Conversion Date or the date of issue of the relevant Shares, if adjustment results from the issue of Shares, whichever is the later.
 

 

	
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            29.
 	
            Aggregate Consideration and Consideration per Share
 

	
            (a)
 	
            Applicability of this Condition:  For the purpose of calculating any adjustment to the Conversion Price pursuant to this Condition, in the case of any:
 

	
             
 	
            (i)
 	
            issue, grant or offer of Shares, Share-Related Securities, Rights in respect of Shares or Rights in respect of Share-Related Securities; or
 

	
             
 	
            (ii)
 	
            grant to any existing securities issued of such rights as to make such securities Share-Related Securities; or
 

	
             
 	
            (iii)
 	
            amendment of the terms of any Rights or Share-Related Securities (other than in accordance with their terms of issue),
 

the “Aggregate Consideration “ and the “Number of Shares “ shall be calculated or determined (if necessary) in accordance with the following provisions of this Condition 29 and the “Consideration per Share “ shall, in each case, be the relevant Aggregate Consideration divided by the relevant Number of Shares.

	
            (b)
 	
            Shares for cash:  In the case of an issue, grant or offer of Shares for cash:
 

	
             
 	
            (i)
 	
            the Aggregate Consideration shall be the amount of such cash, provided that in no such case shall any deduction be made for any commissions or any expenses paid or incurred by the Issuer for any underwriting of the issue or otherwise in connection therewith; and 
 

	
             
 	
            (ii)
 	
            the Number of Shares shall be the number of Shares so issued, granted or offered.
 

	
            (c)
 	
            Shares not for cash:  In the case of the issue, grant or offer of Shares for a consideration in whole or in part other than cash:
 

	
             
 	
            (i)
 	
            the Aggregate Consideration shall be the amount of such cash (if any) plus the consideration other than cash, which  shall be deemed to be the Fair Market Value thereof or, if pursuant to applicable law such determination is to be made by application to a court of competent jurisdiction, the value thereof as determined by such court or an appraiser appointed by such court, irrespective of the accounting treatment thereof; and 
 

	
             
 	
            (ii)
 	
            the Number of Shares shall be the number of Shares so issued, granted or offered.
 

	
            (d)
 	
            Issue of Share-Related Securities:  In the case of the issue, grant or offer of Share-Related Securities or Rights in respect of Share-Related Securities or the grant to any securities issued of such rights as to make such securities Share-Related Securities:
 

	
             
 	
            (i)
 	
            the Aggregate Consideration shall be:
 

	
             
 	
            (A)
 	
            the consideration (if any) received by the Issuer for such Share-Related Securities and (if applicable) Rights or, as the case may be, such grant; plus
 

	
             
 	
            (B)
 	
            the additional consideration (if any) to be received by the Issuer upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities at the initial  price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Rights at the initial price or rate,
 

the consideration in each case to be determined in the same manner as provided in paragraphs (b) and (c) of this Condition 29; and 

 

	
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            (ii)
 	
            the Number of Shares shall be the number of Shares to be issued upon (and assuming) such exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities at the initial price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Rights at the initial price or rate.
 

	
            (e)
 	
            Amendment of Share-Related Securities/Rights in respect of Share-Related Securities:  In the case of the amendment of the terms of any Share-Related Securities and/or Rights in respect of Share-Related Securities (in either case, other than in accordance with their terms of issue):
 

	
             
 	
            (i)
 	
            the Aggregate Consideration shall be:
 

	
             
 	
            (A)
 	
            the consideration (if any) received by the Issuer for such amendment; plus
 

	
             
 	
            (B)
 	
            the additional consideration (if any) to be received by the Issuer upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities at the initial  price or rate or (in the case of an amendment to the terms of such Share-Related Securities) the amended price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such Rights) the amended price or rate,
 

the consideration in each case to be determined in the same manner as provided in paragraphs (b) and (c) of this Condition 29; and 

	
             
 	
            (ii)
 	
            the Number of Shares shall be the number of Shares to be issued upon (and assuming) such exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities at the initial price or rate or (in the case of an amendment to the terms of such Share-Related Securities) the amended price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such Rights) the amended price or rate.
 

	
            (f)
 	
            Rights in respect of Shares:  In the case of the issue, grant or offer of Rights in respect of Shares or the amendment of the terms of any Rights in respect of Shares (other than in accordance with their terms of issue):
 

	
             
 	
            (i)
 	
            the Aggregate Consideration shall be:
 

	
             
 	
            (A)
 	
            the consideration received by the Issuer for any such Rights or, as the case may be, such amendment; plus
 

	
             
 	
            (B)
 	
            the additional consideration to be received by the Issuer upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such Rights) the amended price or rate,
 

the consideration in each case to be determined in the same manner as provided in paragraphs (b) and (c) of this Condition 29; and 

	
             
 	
            (ii)
 	
            the Number of Shares shall be the number of Shares to be issued upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such Rights) the amended price or rate.
 

 

	
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            (g)
 	
            Currency translation:  If any of the consideration referred to in any of the preceding paragraphs of this Condition 29 is receivable in a currency other than U.S. dollars, such consideration shall be translated into U.S. dollars for the purposes of this Condition 29:
 

	
             
 	
            (i)
 	
            in any case where there is a fixed rate of exchange between U.S. dollars and the relevant currency for the purposes of the issue, grant or offer of the Shares, Share-Related Securities or Rights, the exercise of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Rights or the exercise of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Rights or Share-Related Securities, at such fixed rate of exchange; and 
 

	
             
 	
            (ii)
 	
            in all other cases, at the Screen Rate on the date as of which the said consideration is required to be calculated. 
 

	
            30.
 	
            Notice of Adjustment of the Conversion Price
 

The Issuer shall give notice to the Trustee and to the Noteholders in accordance with Condition 45 (Notices) of any adjustment of the Conversion Price or the Minimum Conversion Price as soon as is practicable following the determination thereof. 

Covenants Relating to the Equity Option

	
            31.
 	
            Shares Available
 

For so long as any Conversion Right remains exercisable, the Issuer shall keep available for issue free from pre-emptive or other similar rights out of its authorised but unissued share capital such number of Shares as would enable such Conversion Right to be satisfied in full.

	
            32.
 	
            Listing of Shares Issued upon Conversion
 

The Issuer shall (i) procure, within 30 days after the Issue Date, and at all times thereafter maintain an approval for listing of the Shares to be issued upon exercise of any Conversion Right on the American Stock Exchange in accordance with its rules; (ii) upon issue of the Shares following exercise of any Conversion Right, immediately procure and maintain the listing of the relevant Shares on the American Stock Exchange in accordance with its rules; and (iii) the Issuer shall provide a copy of the approval or confirmation of listing (as applicable) to the Trustee within 5 business days of receipt of the same. 

	
            33.
 	
            Corporate Reorganisation
 

	
            (a)
 	
            Merger; sale of assets:  In the event of any:
 

	
             
 	
            (i)
 	
            consolidation, amalgamation, statutory arrangement, merger or binding share exchange of the Issuer with any other corporation (other than a consolidation, amalgamation or merger in which the Issuer is the continuing corporation) (the “Successor Corporation “); or 
 

	
             
 	
            (ii)
 	
            sale or transfer of all or substantially all of the assets of the Issuer,
 

the Issuer shall immediately notify the Noteholders and the Trustee of such event and use all reasonable endeavours to cause the corporation resulting from such consolidation, amalgamation or merger or the corporation which shall have acquired such assets, as the case may be, to execute a trust deed supplemental to the Trust Deed providing that the holder of each Note then outstanding shall have the right (during the Conversion Period) to convert such Note into the class and amount of shares and other securities and property receivable upon such consolidation, amalgamation, merger, sale or transfer by a holder of the number of Shares into which such Note would have been converted had the relevant Conversion Date fallen immediately prior to such consolidation, amalgamation, merger, sale or transfer. 

 

	
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            (b)
 	
            Other adjustments:  Such supplemental trust deed shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in these Conditions. The undertaking contained in this Condition 33 is without prejudice to the provisions of Condition 16 (Change of Control) and shall apply in the same way to any subsequent consolidations, amalgamations, mergers, sales or transfers.
 

	
            (c)
 	
            Notice:  Promptly upon execution and delivery of such supplemental trust deed the Issuer shall give notice to the Trustee and to the Noteholders in accordance with Condition 45 (Notices) stating the consideration into which the Notes will be convertible after the execution and delivery of such supplemental trust deed.
 

	
            34.
 	
            Restriction on New Classes of Shares
 

For so long as any Conversion Right remains exercisable, the Issuer shall not create or permit there to be in issue any class of equity shares carrying any rights which are more favourable than the rights attaching to the Shares with respect to voting, dividends or liquidation, where “equity shares “ means any shares in the capital of the Issuer other than shares which neither as respects dividends nor as respect capital carry any right to participate beyond a specified amount in a distribution, whether in a liquidation or otherwise.

	
            35.
 	
            Frustration of Conversion Right
 

For so long as any Conversion Right remains exercisable, the Issuer shall not take any action which would have the effect, or but for the provisions of Condition 27(c) (Minor Adjustments and No Adjustments - Adjustments not permitted by law) would have the effect, that exercise of the Conversion Right would require Shares to be issued in circumstances not permitted by applicable law.

	
            36.
 	
            Capitalisation of Profits or Reserves
 

For so long as any Conversion Right remains exercisable, the Issuer shall not issue or pay up any securities, in either case, by way of capitalisation of profits or reserves, except:

	
             
 	
            (a)
 	
            where such action gives rise (or would, but for the provisions of Condition 27 (Minor Adjustments and No Adjustments), give rise) to an adjustment to the Conversion Price; 
 

	
             
 	
            (b)
 	
            where such action constitutes a Dividend in Shares which does not give rise to an adjustment to the Conversion Price; or
 

	
             
 	
            (c)
 	
            by the issue of fully paid equity share capital (other than Shares) to the holders of equity share capital of the same class and other persons entitled thereto.
 

	
            37.
 	
            Reduction of Share Capital
 

For so long as any Conversion Right remains exercisable, the Issuer shall not reduce its issued share capital except where such reduction:

	
             
 	
            (a)
 	
            gives rise (or would, but for the provisions of Condition 27 (Minor Adjustments and No Adjustments), give rise) to an adjustment to the Conversion Price; 
 

	
             
 	
            (b)
 	
            is pursuant to the terms of the relevant share capital; or
 

	
             
 	
            (c)
 	
            is by means of a purchase or redemption of share capital.
 

	
            38.
 	
            Change of Control Event Premium
 

	
             
 	
            (a)
 	
            If and whenever a Change of Control Event shall occur, the Issuer shall give a Change of Control Notice and if a Noteholder shall subsequently exercise its Conversion Right pursuant 
 

 

	
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to Condition 13(a) (Procedure for Convention -Deposit of Note) so that the Conversion Date for any Notes held by such Noteholder occurs after the date of such Change of Control Event Notice but on or prior to the 60th day following the date of such Change of Control Event Notice, then the Issuer shall pay to such Noteholder the following U.S. dollar amounts per U.S. dollar of Notes held by the Noteholder that are to be converted on such Conversion Date (the “Change of Control Event Premium”):

	
            Conversion Date
 	
            Amount
 
	
            On or before 13 July 2008 but after the Shelf Registration Statement Effective Date
 	
            $0.12239
 
	
            Thereafter, but on or before 13 July 2009
 	
            $0.07246
 
	
            Thereafter, but on or before 13 July 2010
 	
            $0.02250
 
	
            Thereafter, but on or before 13 July 2011
 	
            $0
 
	
            Thereafter, and until the Maturity Date
 	
            $0
 

 

	
             
 	
            (b)
 	
            Such cash payment shall be made by the Issuer within five (5) business days of the Conversion Date in respect of such Notes by U.S. dollar cheque drawn on, or by transfer to a U.S. dollar account maintained by the payee with, a bank in New York City in accordance with the instructions given in the relevant Conversion Notice.
 

 

Miscellaneous Provisions

	
            39.
 	
            Determined by an Expert
 

In relation to any matter required by these Conditions or the Trust Deed to be Determined by an Expert, the Issuer shall promptly appoint an Expert with the prior written approval of the Trustee. If when any matter is required by these Conditions or the Trust Deed to be Determined by an Expert, the Issuer shall within a reasonable time fail to appoint an Expert the Trustee shall be entitled (but not obliged) to make such appointment. In either case, any such appointment shall be for the account of the Issuer. 

	
            40.
 	
            Prescription
 

Claims for principal shall become void unless the relevant Note Certificates are presented for payment within 10 years (in the case of principal) or within five years (in the case of interest) of the appropriate Relevant Date.

	
            41.
 	
            Replacement of Note Certificates
 

If any Note Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Registrar, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Issuer may reasonably require. Mutilated or defaced Notes or Coupons must be surrendered before replacements will be issued.

	
            42.
 	
            Trustee and Paying and Conversion Agents
 

	
            (a)
 	
            Role of Trustee:  Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Trustee is entitled to enter into business transactions with the Issuer and any entity relating to the Issuer without accounting for any profit. In the exercise of its powers and discretions under these Conditions and the Trust Deed, the Trustee will have regard to the interests of the Noteholders as a class and will not be responsible for any consequence for individual 
 

 

	
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holders of Notes as a result of such holders being connected in any way with a particular territory or taxing jurisdiction and no Noteholder shall be entitled to claim from the Issuer or the Trustee, any indemnification or other payment in respect of any consequence (including without limitation, any tax consequences) for individual Noteholders of any such exercise.

	
            (b)
 	
            Roles of Agents:  In acting under the Agency Agreement and in connection with the Notes, the Agents act solely as agents of the Issuer and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders.
 

	
            (c)
 	
            Changes to Agents:  The initial Agents and their initial Specified Offices are listed below. The Issuer reserves the right (with the prior approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and conversion agent or registrar and additional or successor paying and conversion agents and transfer agents; provided, however, that the Issuer shall at no time maintain a registrar or transfer agent with a Specified Office within the United Kingdom and further provided that the Issuer will at all times maintain a principal paying and conversion agent and it will ensure that it maintains a paying and conversion agent in an EU Member State that will not be obliged to withhold or deduct tax pursuant to European Council Directive
2003/48.EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000.
 

Notice of any change in any of the Paying and Conversion Agents or in their Specified Offices shall promptly be given to the Noteholders.

	
            43.
 	
            Meetings of Noteholders; Modification and Waiver
 

	
            (a)
 	
            Meetings of Noteholders:  The Trust Deed contains provisions for convening meetings of Noteholders to consider matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Issuer or the Trustee and shall be convened by the Trustee upon the request in writing of Noteholders holding not less than one-tenth of the aggregate principal amount of the outstanding Notes upon at least 30 day’s notice (exclusive of the day on which notice is given and of the day on which the relevant meeting is to be held), in accordance with the Trust Deed. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more
persons holding or representing more than half of the aggregate principal amount of the outstanding Notes or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the principal amount of the Notes held or represented; provided, however, that Reserved Matters may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more persons holding or representing not less than two-thirds or, at any adjourned meeting, one-third of the aggregate principal amount of the outstanding Notes form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders, whether present or not.
 

In addition, a resolution in writing signed by or on behalf of all Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders under the Trust Deed will take effect as if it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.

	
            (b)
 	
            Modification and waiver:  The Trustee may, without the consent of the Noteholders agree to any modification of these Conditions or the Trust Deed (other than in respect of a Reserved Matter) which is, in the opinion of the Trustee, proper to make if, in the opinion of the Trustee, such modification will not be materially prejudicial to the interests of Noteholders and to any modification of the Notes or the Trust Deed which is of a formal, minor or technical nature or is to correct a manifest error. 
 

In addition, the Trustee may, without the consent of the Noteholders or Couponholders authorise or waive any proposed breach of breach of the Notes or the Trust Deed (other than a proposed breach or 

 

	
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breach relating to the subject of a Reserved Matter) if, in the opinion of the Trustee, the interests of the Noteholders will not be materially prejudiced thereby.

Unless the Trustee agrees otherwise, any such authorisation, waiver or modification shall be notified to the Noteholders as soon as practicable thereafter.

	
            44.
 	
            Enforcement
 

The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Notes, but it shall not be bound to do so unless:

	
             
 	
            (a)
 	
            it has been so requested in writing by the holders of at least one quarter of the aggregate principal amount of the outstanding Notes or has been so directed by an Extraordinary Resolution; and
 

	
             
 	
            (b)
 	
            it has been indemnified or provided with security to its satisfaction.
 

No Noteholder may proceed directly against the Issuer unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing.

	
            45.
 	
            Notices
 

Notices to the Noteholders shall be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day after the date of mailing. 

	
            46.
 	
            Governing Law and Jurisdiction
 

	
            (a)
 	
            Governing law:  The Trust Deed and the Notes are governed by, and shall be construed in accordance with, English law.
 

	
            (b)
 	
            Jurisdiction:  The Issuer has in the Trust Deed (i) agreed for the benefit of the Trustee and the Noteholders that the courts of England and the Courts of the State of New York located in the City and County of New York or the United States District Court for the Southern District of New York shall have jurisdiction to settle any dispute (a “Dispute “) arising from or connected with the Notes; (ii) agreed that those courts are the most appropriate and convenient courts to settle any Dispute and, accordingly, that it will not argue that any other courts are more appropriate or convenient; and (iii) designated a person in England and New York to accept service of any process on its behalf. The Trust Deed also states that nothing contained in the
Trust Deed prevents the Trustee or any of the Noteholders from taking proceedings relating to a Dispute (“Proceedings “) in any other courts with jurisdiction and that, to the extent allowed by law, the Trustee or any of the Noteholders may take concurrent Proceedings in any number of jurisdictions.
 

 

	
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The Registrar:

The Bank of New York

101 Barclay Street

New York, NY 10286

United States of America

	
             
 	
            Fax:  
 	
            +1 212 298 1904
 

	
             
 	
            Attention:
 	
            McLean Sarrabo
 

 

The Principal Paying and Conversion Agent:

The Bank of New York 

One Canada Square

London E14 5AL

United Kingdom

	
             
 	
            Fax:  
 	
            +44 207 964 2536
 

	
             
 	
            Attention:
 	
            Corporate Trust Administration
 

 

Transfer Agent

The Bank of New York

101 Barclay Street

New York, NY 10286

United States of America

	
             
 	
            Fax:
 	
            +1 212 298 1904
 

	
             
 	
            Attention:
 	
            McLean Sarrabo
 

 

 

	
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                                   SCHEDULE 2
                     PROVISIONS FOR MEETINGS OF NOTEHOLDERS

1.      Definitions

        In this Trust Deed and the Conditions, the following expressions have
the following meanings:

        "Block Voting Instruction" means, in relation to any Meeting, a document
        in the English language issued by a Registrar:

        (a)     certifying. that each registered Holder of certain specified
                Notes (each a "Relevant Note") or a duly authorised person on
                its behalf has instructed the Registrar that the votes
                attributable to each Relevant Note held by it are to be cast in
                a particular way on each resolution to be put to the Meeting and
                in each case that, during the period of 48 hours before the time
                fixed for the Meeting, such instructions may not be amended or
                revoked;

        (b)     listing the total principal amount of the Blocked Notes and the
                Relevant Notes, distinguishing for each resolution between those
                in respect of which instructions have been given to vote for, or
                against, the resolution; and

        (c)     authorising a named individual or individuals to vote in respect
                of the Blocked Notes and the Relevant Notes in accordance with
                such instructions;

        "Chairman" means, in relation to any Meeting, the individual who takes
        the chair in accordance with paragraph 7 (Chairman);

        "Extraordinary Resolution" means a resolution passed at a Meeting duly
        convened and held in accordance with this Schedule by a majority of not
        less than [three quarters] of the votes cast;

        "Form of Proxy" means, in relation to any Meeting, a document in the
        English language available from the Registrar signed by a Noteholder or,
        in the case of a corporation, executed under its seal or signed on its
        behalf by a duly authorised officer and delivered to the Registrar not
        later than 48 hours before the time fixed for such Meeting, appointing a
        named individual or individuals to vote in respect of the Notes held by
        such Noteholder;

        "Meeting" means a meeting of Noteholders (whether originally convened or
        resumed following an adjournment);

        "Proxy" means, in relation to any Meeting, a person appointed to vote
        under a Block Voting Instruction or a Form of Proxy other than:

        (a)     any such person whose appointment has been revoked and in
                relation to whom the Registrar has been notified in writing of
                such revocation by the time which is 48 hours before the time
                fixed for such Meeting; and

                                       -1-

        (b)     any such person appointed to vote at a Meeting which has been
                adjourned for want of a quorum and who has not been re-appointed
                to vote at the Meeting when it is resumed;

        "Relevant Fraction" means:

        (a)     for all business other than voting on an Extraordinary
                Resolution, one tenth;

        (b)     for voting on any Extraordinary Resolution other than one
                relating to a Reserved Matter, more than half; and

        (c)     for voting on any Extraordinary Resolution relating to a
                Reserved Matter, two-thirds;

        provided, however, that, in the case of a Meeting which has resumed
        after adjournment for want of a quorum, it means:

                (i)     for all business other than voting on an Extraordinary
                        Resolution relating to a Reserved Matter, the fraction
                        of the aggregate principal amount of the outstanding
                        Notes represented or held by the Voters actually present
                        at the Meeting; and

                (ii)    for voting on any Extraordinary Resolution relating to a
                        Reserved Matter, one-third;

        "Reserved Matter" means any proposal:

        (a)     to change any date fixed for payment of principal or interest in
                respect of the Notes, to reduce the amount of principal or
                interest payable on any date in respect of the Notes or to alter
                the method of calculating the amount of any payment in respect
                of the Notes on redemption or maturity;

        (b)     to effect the exchange, conversion or substitution of the Notes
                for, or the conversion of the Notes into, shares, bonds or other
                obligations or securities of the Issuer or any other person or
                body corporate formed or to be formed (other than as permitted
                under Clause 6.3 of this Trust Deed);

        (c)     to change the currency in which amounts due in respect of the
                Notes are payable;

        (d)     to change the quorum required at any Meeting or the majority
                required to pass an Extraordinary Resolution; or

        (e)     to amend this definition;

        "Voter" means, in relation to any Meeting, a Proxy or (subject to
        paragraph 4 (Record Date)) a Noteholder; provided, however, that
        (subject to paragraph 4 (Record Date)) any Noteholder which has
        appointed a Proxy under a Block Voting Instruction or Form of Proxy
        shall not be a "Voter" except to the extent that such appointment has

                                      -2-

        been revoked and the Registrar notified in writing of such revocation at
        least 48 hours before the time fixed for such Meeting;

        "Written Resolution" means a resolution in writing signed by or on
        behalf of all holders of Notes who for the time being are entitled to
        receive notice of a Meeting in accordance with the provisions of this
        Schedule, whether contained in one document or several documents in the
        same form, each signed by or on behalf of one or more such Holders of
        the Notes;

        "24 hours" means a period of 24 hours including all or part of a day
        (disregarding for this purpose the day upon which such Meeting is to be
        held) upon which banks are open for business in both the place where the
        relevant Meeting is to be held and in each of the places where the
        Paying and Conversion Agents have their Specified Offices and such
        period shall be extended by one period or, to the extent necessary, more
        periods of 24 hours until there is included as aforesaid all or part of
        a day upon which banks are open for business as aforesaid; and

        "48 hours" means 2 consecutive periods of 24 hours.

2.      Issue of Block Voting Instructions and Forms Of Proxy

        The Holder of a Note may require the Registrar to issue a Block Voting
        Instruction by arranging (to the satisfaction of the Registrar) for such
        Note to be blocked in the Register not later than 48 hours before the
        time fixed for the relevant Meeting. The Holder of a Note may require
        the Registrar to issue a Block Voting Instruction by delivering to the
        Registrar written instructions not later than 48 hours before the time
        fixed for the relevant Meeting. Any Holder of a Note may obtain an
        uncompleted and unexecuted Form of Proxy from the Registrar. A Block
        Voting Instruction and a Form of Proxy cannot be outstanding
        simultaneously in respect of the same Note.

3.      Record Date

        The Issuer may fix a record date for the purposes of any Meeting or any
        resumption thereof following its adjournment for want of a quorum
        provided that such record date is not more than 10 days prior to the
        time fixed for such Meeting or (as the case may be) its resumption. The
        person in whose name a Note is registered in the Register on the record
        date at close of business in the city in which the Registrar has its
        Specified Office shall be deemed to be the Holder of such Note for the
        purposes of such Meeting and notwithstanding any subsequent transfer of
        such Note or entries in the Register.

4.      Convening of Meeting

        The Issuer or the Trustee may convene a Meeting at any time, and the
        Trustee shall be obliged to do so subject to its being indemnified
        and/or secured to its satisfaction upon the request in writing of
        Noteholders holding not less than [one tenth] of the aggregate principal
        amount of the outstanding Notes. Every Meeting shall be held on a date,
        and at a time and place, approved by the Trustee.

                                      -3-

5.      Notice

        At least 30 days' notice (exclusive of the day on which the notice is
        given and of the day on which the relevant Meeting is to be held)
        specifying the date, time and place of the Meeting shall be given to the
        Noteholders and the Paying and Conversion Agents and the Registrar (with
        a copy to the Issuer) where the Meeting is convened by the Trustee or,
        where the Meeting is convened by the Issuer, the Trustee. The notice
        shall set out the full text of any resolutions to be proposed unless the
        Trustee agrees that the notice shall instead specify the nature of the
        resolutions without including the full text and shall state that Notes
        may be blocked in the Register for the purposes of appointing Proxies
        under Block Voting Instructions until 48 hours before the time fixed for
        the Meeting and a Noteholder may appoint a Proxy either under a Block
        Voting Instruction by delivering written instructions to the Registrar
        or by executing and delivering a Form of Proxy to the Specified Office
        of the Registrar, in either case until 48 hours before the time fixed
        for the Meeting.

6.      Chairman

        An individual (who may, but need not, be a Noteholder) nominated in
        writing by the Trustee may take the chair at any Meeting but, if no such
        nomination is made or if the individual nominated is not present within
        15 minutes after the time fixed for the Meeting, those present shall
        elect one of themselves to take the chair failing which, the Issuer may
        appoint a Chairman. The Chairman of an adjourned Meeting need not be the
        same person as was the Chairman of the original Meeting.

7.      Quorum

        The quorum at any Meeting shall be at least two Voters representing or
        holding not less than the Relevant Fraction of the aggregate principal
        amount of the outstanding Notes; provided, however, that, so long as at
        least the Relevant Fraction of the aggregate principal amount of the
        outstanding Notes is represented by a single Note Certificate, a single
        Voter appointed in relation thereto or being the Holder of the Notes
        represented thereby shall be deemed to be two Voters for the purpose of
        forming a quorum.

8.      Adjournment for want of quorum

        If within 15 minutes after the time fixed for any Meeting a quorum is
not present, then:

        (a)     in the case of a Meeting requested by Noteholders, it shall be
                dissolved; and

        (b)     in the case of any other Meeting (unless the Issuer and the
                Trustee otherwise agree), it shall be adjourned for such period
                (which shall be not less than 14 days and not more than 42 days)
                and to such place as the Chairman determines (with the approval
                of the Trustee); provided, however, that:

        (i)     the Meeting shall be dissolved if the Issuer and the Trustee
                together so decide; and

        (ii)    no Meeting may be adjourned more than once for want of a quorum.

                                      -4-

9.      Adjourned Meeting

        The Chairman may, with the consent of, and shall if directed by, any
        Meeting adjourn such Meeting from time to time and from place to place,
        but no business shall be transacted at any adjourned Meeting except
        business which might lawfully have been transacted at the Meeting from
        which the adjournment took place.

10.     Notice following adjournment

        Paragraph 6 (Notice) shall apply to any Meeting which is to be resumed
        after adjournment for want of a quorum save that:

        (a)     10 days' notice (exclusive of the day on which the notice is
                given and of the day on which the Meeting is to be resumed)
                shall be sufficient; and

        (b)     the notice shall specifically set out the quorum requirements
                which will apply when the Meeting resumes.

        It shall not be necessary to give notice of the resumption of a Meeting
        which has been adjourned for any other reason.

11.     Participation

        The following may attend and speak at a Meeting:

        (a)     Voters;

        (b)     representatives of the Issuer and the Trustee;

        (c)     the financial advisers of the Issuer and the Trustee;

        (d)     the legal counsel to the Issuer and the Trustee and such
                advisers;

        (e)     the Registrar; and

        (f)     any other person approved by the Meeting or the Trustee.

12.     Show of hands

        Every question submitted to a Meeting shall be decided in the first
        instance by a show of hands. Unless a poll is validly demanded before or
        at the time that the result is declared, the Chairman's declaration that
        on a show of hands a resolution has been passed, passed by a particular
        majority, rejected or rejected by a particular majority shall be
        conclusive, without proof of the number of votes cast for, or against,
        the resolution. Where there is only one Voter, this paragraph shall not
        apply and the resolution will immediately be decided by means of a poll.

13.     Poll

        A demand for a poll shall be valid if it is made by the Chairman, the
        Issuer, the Trustee or one or more Voters representing or holding not
        less than one fiftieth of the aggregate principal amount of the
        outstanding Notes. The poll may be taken immediately or after such
        adjournment as the Chairman directs, but any poll demanded on the
        election of the Chairman or on any question of adjournment shall be

                                      -5-

        taken at the Meeting without adjournment. A valid demand for a poll
        shall not prevent the continuation of the relevant Meeting for any other
        business as the Chairman directs.

14.     Votes

        Every Voter shall have:

        (a)     on a show of hands, one vote; and

        (b)     on a poll, one vote in respect of each U.S.$100,000 in aggregate
                face amount of the outstanding Note(s) represented or held by
                him.

        Unless the terms of any Block Voting Instruction state otherwise, a
        Voter shall not be obliged to exercise all the votes to which he is
        entitled or to cast all the votes which he exercises in the same way. In
        the case of a voting tie the Chairman shall have a casting vote.

15.     Validity of Votes by Proxies

        Any vote by a Proxy in accordance with the relevant Block Voting
        Instruction or Form of Proxy shall be valid even if such Block Voting
        Instruction or Form of Proxy or any instruction pursuant to which it was
        given has been amended or revoked, provided that the Registrar has not
        been notified in writing of such amendment or revocation by the time
        which is 24 hours before the time fixed for the relevant Meeting. Unless
        revoked, any appointment of a Proxy under a Block Voting Instruction or
        Form of Proxy in relation to a Meeting shall remain in force in relation
        to any resumption of such Meeting following an adjournment; provided,
        however, that no such appointment of a Proxy in relation to a Meeting
        originally convened which has been adjourned for want of a quorum shall
        remain in force in relation to such Meeting when it is resumed. Any
        person appointed to vote at such a Meeting must be re-appointed under a
        Block Voting Instruction or Form of Proxy to vote at the Meeting when it
        is resumed.

16.     Powers

        A Meeting shall have power (exercisable only by Extraordinary
        Resolution), without prejudice to any other powers conferred on it or
        any other person:

        (a)     to approve any Reserved Matter;

        (b)     to approve any proposal by the Issuer for any modification,
                abrogation, variation or compromise of any provisions of this
                Trust Deed or the Conditions or any arrangement in respect of
                the obligations of the Issuer under or in respect of the Notes;

        (c)     (other than as permitted under Clause 6.3 of this Trust Deed) to
                approve the substitution of any person for the Issuer (or any
                previous substitute) as principal obligor under the Notes;

        (d)     to waive any breach or authorise any proposed breach by the
                Issuer of its obligations under or in respect of this Trust Deed

                                      -6-

                or the Notes or any act or omission which might otherwise
                constitute an Event of Default under the Notes;

        (e)     to remove any Trustee;

        (f)     to approve the appointment of a new Trustee;

        (g)     to authorise the Trustee (subject to its being indemnified
                and/or secured to its satisfaction) or any other person to
                execute all documents and do all things necessary to give effect
                to any Extraordinary Resolution;

        (h)     to discharge or exonerate the Trustee from any liability in
                respect of any act or omission for which it may become
                responsible under this Trust Deed or the Notes;

        (i)     to give any other authorisation or approval which under this
                Trust Deed or the Notes is required to be given by Extraordinary
                Resolution; and

        (j)     to appoint any persons as a committee to represent the interests
                of the Noteholders and to confer upon such committee any powers
                which the Noteholders could themselves exercise by Extraordinary
                Resolution.

17.     Extraordinary Resolution binds all Holders

        An Extraordinary Resolution shall be binding upon all Noteholders,
        whether or not present at such Meeting, and each of the Noteholders
        shall be bound to give effect to it accordingly. Notice of the result of
        every vote on an Extraordinary Resolution shall be given to the
        Noteholders and the Paying and Conversion Agents and the Registrar (with
        a copy to the Issuer and the Trustee) within 14 days of the conclusion
        of the Meeting.

18.     Minutes

        Minutes of all resolutions and proceedings at each Meeting shall be
        made. The Chairman shall sign the minutes, which shall be prima facie
        evidence of the proceedings recorded therein. Unless and until the
        contrary is proved, every such Meeting in respect of the proceedings of
        which minutes have been summarised and signed shall be deemed to have
        been duly convened and held and all resolutions passed or proceedings
        transacted at it to have been duly passed and transacted.

19.     Written Resolution

        A Written Resolution shall take effect as if it were an Extraordinary
Resolution.

20.     Further regulations

        Subject to all other provisions contained in this Trust Deed, the
        Trustee may without the consent of the Issuer or the Noteholders
        prescribe such further regulations regarding the holding of Meetings of
        Noteholders and attendance and voting at them as the Trustee may in its
        sole discretion determine.

                                      -7-

                                    EXECUTION

BMB MUNAI, INC.

By:

BNY CORPORATE TRUSTEE SERVICES LIMITED

By:

                                      -8-Exhibit 4.2

CONFORMED COPY

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of July 13, 2007, by and among BMB MUNAI, INC., a Nevada corporation (the “Company”), and BAYERISCHE HYPO-UND VEREINSBANK AG, as sole bookrunner (the “Bookrunner”), pursuant to that certain Placement Agreement, dated July 4, 2007 (the “Placement Agreement”), between the Company and the Bookrunner, which provides for, among other things, the issuance by the Company of U.S.$60,000,000 aggregate principal amount of the Company’s 5.0 per cent. Convertible Notes due 2012 (the “Initial
Securities”). The Initial Securities are issued under a trust deed, dated July 13, 2007 (as amended or supplemented from time to time, the “Trust Deed”), between the Company and BNY Corporate Trustee Services Limited, as trustee. Pursuant to the Trust Deed, the Company is required to, among other things, commence an offer (the “Initial Offer”) to the holders of the Initial Securities to exchange any and all of the Initial Securities for a like aggregate principal amount of debt securities of the Company (the “Notes”) that are substantially similar in all material respects to the Initial Securities except that the Notes will be governed by, and entitled to the benefits of, a New York law-governed trust indenture (as amended or supplemented from time to time, the “Indenture”) that is substantially similar in all material respects to the Trust Deed, except that it (i) will contemplate the issue of one or more global note(s), in the form attached to the Indenture, that will become eligible to be deposited with a custodian for The Depository Trust Company and/or a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, société anonyme, upon the date on which the Shelf Registration Statement becomes effective in accordance with this Agreement, (ii) will incorporate such other changes as are necessary to comply with the U.S. Trust Indenture Act of 1939, as amended (the “TIA”), and (iii) is eligible for qualification under the TIA. 

 

In order to induce the Bookrunner to enter into the Placement Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Placement Agreement. The terms “herein,” “hereof,” “hereto,” “hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this Agreement as a whole and not to any particular section, paragraph, sentence or other subdivision of this Agreement.

 

The Company agrees with the Bookrunner (i) for its benefit as Bookrunner and (ii) for the benefit of the beneficial owners from time to time of the Covered Securities (as defined herein) (each of the foregoing a “Holder” and, together, the “Holders”), as follows:

 

1.         Definitions. Capitalized terms used herein without definition shall have the respective meanings set forth in the Placement Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

(a)        “Additional Filing Deadline Date” has the meaning set forth in Section 2(e) hereof.

 

(b)        “additional interest” has the meaning set forth in Section 2(e) hereof.

 

(c)        “Additional Interest Accrual Period” has the meaning set forth in Section 2(e) hereof.

 

(d)        “Additional Interest Amount” has the meaning set forth in Section 2(e) hereof.

 

(e)        “Additional Interest Payment Date” means each January 13 and July 13 of each

 

year.

 

(f)        “Affiliate” means, with respect to any specified person, an “affiliate,” as defined in Rule 144, of such person.

 

(g)       “Amendment Effectiveness Deadline Date” has the meaning set forth in Section 2(d) hereof.

 

(h)       “Automatic Shelf Registration Statement” has the meaning ascribed to it in Rule 405.

 

(i)        “Bookrunner” has the meaning set forth in the preamble hereto.

 

(j)        “Business Day” means each day other than a Saturday or Sunday or any day on which commercial banking institutions are not required to be open in the State of New York.

 

(k)        “Claim” has the meaning set forth in Section 8(o) hereof.

 

(l)        “Common Stock” means the shares of common stock, U.S.$0.001 par value per share, of the Company.

 

(m)        “Covered Security” has the meaning set forth in Section 1(pp) hereof.

 

(n)        “Effectiveness Deadline Date” has the meaning set forth in Section 2(a) hereof.

 

(o)       “Effectiveness Period” means a period (subject to extension pursuant to Section 3(k) hereof) that terminates when there are no Registrable Securities outstanding.

 

(p)        “Event” has the meaning set forth in Section 2(e) hereof.

 

(q)        “Event Date” has the meaning set forth in Section 2(e) hereof.

 

(r)        “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

(s)        “Filing Deadline Date” has the meaning set forth in Section 2(a) hereof.

 

(t)        “Form S-1” means Form S-1 under the Securities Act.

 

(u)        “Form S-3” means Form S-3 under the Securities Act.

 

(v)        “Holder” has the meaning set forth in the preamble hereto.

 

(w)        “Holder Information” has the meaning set forth in Section 6(b) hereof.

 

	
             
  	
            (x)
 	
            “Indemnified Party” has the meaning set forth in Section 6(c) hereof.
 

 

	
             
  	
            (y)
 	
            “Indemnifying Party” has the meaning set forth in Section 6(c) hereof.
 

 

	
             
  	
            (z)
 	
            “Indenture” has the meaning set forth in the preamble hereto.
 

 

 

- 2 -

 

	
             
  	
            (aa)
 	
            “Initial Securities” has the meaning set forth in the preamble hereto.
 

 

	
             
  	
            (bb)
 	
            “Initial Offer” has the meaning set forth in the preamble hereto.
 

 

(cc)      “Initial Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof.

 

	
             
  	
            (dd)
 	
            “Issue Date” means July 13, 2007.
 

 

	
             
  	
            (ee)
 	
            “Material Event” has the meaning set forth in Section 3(k) hereof.
 

 

	
             
  	
            (ff)
 	
            “NASD Rules” has the meaning set forth in Section 3(u) hereof.
 

 

(gg)      “Note Closing Date” means the later of (i) completion of the offering of the Notes contemplated by the Placement Agreement and (ii) completion of the Initial Offer and issuance of the Notes pursuant to the Indenture.

 

	
             
  	
            (hh)
 	
            “Notes” has the meaning set forth in the preamble hereto.
 

 

(ii)       “Notice and Questionnaire” means a written questionnaire containing such information as the Company may reasonably request for use in connection with the Shelf Registration Statement or the Prospectus included therein and in any application to be filed with or under state securities laws, which Notice and Questionnaire shall be provided to the Holders no later than the Note Closing Date.

 

(jj)       “Notice Holder” means, on a given date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date, provided not all of such Holder’s Registrable Securities that have been registered for resale pursuant to a Notice and Questionnaire have been sold in accordance with a Shelf Registration Statement.

 

	
             
  	
            (kk)
 	
            “Placement Agreement” has the meaning set forth in the preamble hereof.
 

 

	
             
  	
            (ll)
 	
            “Proceeding” has the meaning set forth in Section 6(c) hereof.
 

 

(mm)   “Prospectus” means each prospectus relating to any Shelf Registration Statement, including all supplements and amendments to such prospectus, in each case in the form furnished pursuant to this Agreement by the Company to Holders or filed by the Company with the SEC pursuant to Rule 424 or as part of such Shelf Registration Statement, as the case may be, and in each case including all materials, if any, incorporated by reference or deemed to be incorporated by reference in such prospectus.

 

(nn)      “Record Date” means, (i) December 29, with respect to an Additional Interest Payment Date that occurs on January 13 and (ii) June 28, with respect to an Additional Interest Payment Date that occurs on July 13.

 

(oo)      “Record Holder” means, with respect to an Additional Interest Payment Date relating to a Registrable Security for which any Additional Interest Amount has accrued, a Notice Holder that was the holder of record of such Registrable Security at the close of business on the Record Date relating to such Additional Interest Payment Date.

 

- 3 -

 

(pp)      “Registrable Securities” means the Notes, until such Notes have been converted into the Underlying Common Stock, and, at all times, the Underlying Common Stock and any securities into or for which such Underlying Common Stock has been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split or similar event (each of the foregoing, a “Covered Security”) until, in the case of any such security, the earliest of:

 

(i)        the date on which such security has been effectively registered under the Securities Act and disposed of in accordance with the Registration Statement relating thereto;

 

(ii)       the date on which such security may be resold without restriction pursuant to Rule 144(k) or any successor provision thereto;

 

(iii)      the date on which such security (A) is not subject to the restrictions imposed by Rule 903(b)(3)(iii) or any successor provision thereto and (B) may be resold pursuant to Rule 144 or any successor provision thereto without being subject to the restrictions imposed by paragraphs (e), (f) and (h) of Rule 144 or any successor provisions thereto; provided that the requirements set forth in paragraph (c) of Rule 144 or any successor provision thereto are met as of such date; or

 

(iv)      the date on which such security has been publicly sold pursuant to Rule 144 or any successor provision thereto.

 

	
             
  	
            (qq)
 	
            “Registration Expenses” has the meaning set forth in Section 5 hereof.
 

 

(rr)       “Registration Statement” means each registration statement, under the Securities Act, of the Company that covers any of the Registrable Securities pursuant to this Agreement, including amendments and supplements to such registration statement and including all post-effective amendments to, all exhibits of, and all materials incorporated by reference or deemed to be incorporated by reference in, such registration statement, amendment or supplement.

 

(ss)      “Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(tt)       “Rule 144A” means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(uu)      “Rule 405” means Rule 405 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(vv)      “Rule 415” means Rule 415 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(ww)    “Rule 424” means Rule 424 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(xx)      “Rule 430B” means Rule 430B under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(yy)      “Rule 456” means Rule 456 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

- 4 -

 

 

(zz)      “Rule 457” means Rule 457 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

(aaa)    “Rule 903” means Rule 903 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

	
             
  	
            (bbb)
 	
            “SEC” means the U.S. Securities and Exchange Commission.
 

 

(ccc)    “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

(ddd)    “Shelf Registration Statement” means the Initial Shelf Registration Statement and any Subsequent Shelf Registration Statement.

 

(eee)    “Subsequent Shelf Registration Statement” has the meaning set forth in Section 2(b) hereof.

 

(fff)      “Subsequent Shelf Registration Statement Effectiveness Deadline Date” has the meaning set forth in Section 2(d) hereof.

 

	
             
  	
            (ggg)
 	
            “Suspension Notice” has the meaning set forth in Section 3(k) hereof.
 

 

	
             
  	
            (hhh)
 	
            “Suspension Period” has the meaning set forth in Section 3(k) hereof.
 

 

	
             
  	
            (iii)
 	
            “TIA” has the meaning set forth in the preamble hereto.
 

 

	
             
  	
            (jjj)
 	
            “Trust Deed” has the meaning set forth in the preamble hereto.
 

 

	
             
  	
            (kkk)
 	
            “Trustee” means the trustee under the Indenture.
 

 

(lll)      “Underlying Common Stock” means the Common Stock issuable upon conversion of the Notes.

 

	
             
  	
            2.
 	
            Shelf Registration.
 

 

(a)        The Company shall prepare and file, or cause to be prepared and filed, with the SEC, as soon as practicable but in any event by the date (the “Filing Deadline Date”) that is one hundred (100) days after the Issue Date, a Registration Statement (the “Initial Shelf Registration Statement”) for an offering to be made on a delayed or continuous basis pursuant to Rule 415 registering the resale from time to time by Holders thereof of all of the Registrable Securities (or, if registration of Registrable Securities not held by Notice Holders is not permitted by the rules and regulations of the SEC, then registering the resale from time to time by Notice Holders of their Registrable Securities). The Initial Shelf
Registration Statement shall provide for the registration of such Registrable Securities for resale by such Holders in accordance with any reasonable method of distribution elected by the Holders. In no event shall the Initial Shelf Registration Statement be filed with the SEC prior to the Note Closing Date. The Company shall use its best efforts to (i) cause the Initial Shelf Registration Statement to become effective under the Securities Act as promptly as practicable but in any event by the date (the “Effectiveness Deadline Date”) that is two hundred (200) days after the Issue Date and (ii) keep the Initial Shelf 

 

- 5 -

 

Registration Statement (and any Subsequent Shelf Registration Statement) continuously effective under the Securities Act until the expiration of the Effectiveness Period. At the time the Initial Shelf Registration Statement becomes effective under the Securities Act, each Holder that became a Notice Holder on or before the fifth Business Day immediately preceding the date of such effectiveness shall be named as a selling securityholder in the Initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities in accordance with applicable law.

 

(b)       If, for any reason, at any time during the Effectiveness Period any Shelf Registration Statement ceases to be effective under the Securities Act, or ceases to be usable for the purposes contemplated hereunder, the Company shall use its best efforts to promptly cause such Shelf Registration Statement to become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf Registration Statement), and in any event shall, within thirty (30) days of such cessation of effectiveness, (i) amend such Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of any order suspending the effectiveness of such Shelf Registration Statement or (ii) file an additional Registration Statement (a “Subsequent Shelf
Registration Statement”) for an offering to be made on a delayed or continuous basis pursuant to Rule 415 registering the resale from time to time by Holders thereof of all securities that are Registrable Securities as of the time of such filing (or, if registration of Registrable Securities not held by Notice Holders is not permitted by the rules and regulations of the SEC, then registering the resale from time to time by Notice Holders of their securities that are Registrable Securities as of the time of such filing). If a Subsequent Shelf Registration Statement is filed, the Company shall use its best efforts to (A) cause such Subsequent Shelf Registration Statement to become effective under the Securities Act as promptly as practicable after such filing, but in no event later than the Subsequent Shelf Registration Statement Effectiveness Deadline Date and (B) keep such Subsequent Shelf Registration Statement (or another Subsequent Shelf Registration
Statement) continuously effective until the end of the Effectiveness Period. Each such Subsequent Shelf Registration Statement, if any, shall provide for the registration of such Registrable Securities for resale by such Holders in accordance with any reasonable method of distribution elected by the Holders.

 

(c)        The Company shall supplement and amend any Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement, if required by the Securities Act or as reasonably requested by the Bookrunner or by the Trustee on behalf of the Holders of the Registrable Securities covered by such Shelf Registration Statement.

 

	
             
  	
            (d)
  

 

(i)        Each Holder of Registrable Securities agrees that, if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(d) and Section 3(k). Each Holder of Registrable Securities wishing to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus agrees to deliver a completed and executed Notice and Questionnaire to the Company prior to any attempted or actual distribution of Registrable Securities under a Shelf Registration Statement. If a Holder becomes a Notice Holder after the fifth Business Day immediately preceding the date the Initial Shelf Registration Statement becomes effective under the Securities Act, the Company shall, as promptly as practicable after the date such
Holder became a Notice Holder, and in any event, subject to clause (B) below, within the later of (x) ten (10) Business Days after 

 

- 6 -

 

such date or (y) ten (10) Business Days after the expiration of any Suspension Period that either (I) is in effect when such Holder became a Notice Holder or (II) is put into effect within five (5) Business Days after the date such Holder became a Notice Holder,

 

(A)       file with the SEC a supplement to the related Prospectus (or, if required by law, a post-effective amendment to the Shelf Registration Statement or a Subsequent Shelf Registration Statement), and all other document(s), in each case as is required or desirable so that such Notice Holder is named as a selling securityholder in a Shelf Registration Statement and the related Prospectus in such a manner as to permit such Notice Holder to deliver a Prospectus to purchasers of the Registrable Securities in accordance with applicable law; provided, however, that, if a post-effective amendment or a Subsequent Shelf Registration Statement is required by the rules and regulations of the SEC in order to permit resales by such Notice Holder, the
Company shall have up to thirty (30) days to file such post-effective amendment or Subsequent Shelf Registration Statement and the Company shall not be required to file more than one (1) post-effective amendment or Subsequent Shelf Registration Statement for such purpose in any ninety (90) day period;

 

(B)       if, pursuant to Section 2(d)(i)(A), the Company shall have filed a post-effective amendment to the Shelf Registration Statement or filed a Subsequent Shelf Registration Statement, the Company shall use its best efforts to cause such post-effective amendment or Subsequent Shelf Registration Statement, as the case may be, to become effective under the Securities Act as promptly as practicable, but in any event by the date (the “Amendment Effectiveness Deadline Date,” in the case of a post-effective amendment, and the “Subsequent Shelf Registration Statement Effectiveness Deadline Date,” in the case of a Subsequent Shelf Registration Statement) that is thirty (30) days after the date such post-effective amendment or
Subsequent Shelf Registration Statement, as the case may be, is required by this Section 2(d) to be filed with the SEC; provided, however, that if the Company receives from the SEC a “comment letter” in respect of such post-effective amendment or Subsequent Shelf Registration Statement, the applicable Amendment Effectiveness Deadline Date or Subsequent Shelf Registration Statement Effectiveness Deadline Date, as the case may be, shall be extended to the date that is ninety (90) days after the date such post-effective amendment or Subsequent Shelf Registration Statement, as the case may be, is required by this Section 2(d) to be filed with the SEC;

 

(C)       the Company shall provide such Notice Holder a reasonable number of copies of any documents filed pursuant to clause (A) above;

 

(D)       the Company shall notify such Notice Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment or Subsequent Shelf Registration Statement filed pursuant to clause (A) above;

 

(E)       if such Holder became a Notice Holder during a Suspension Period, or a Suspension Period is put into effect within five (5) Business Days after the date such Holder became a Notice Holder, the Company shall so inform such Notice Holder and shall take the actions set forth in clauses (A), (B), (C) and (D) above within five (5) Business Days after expiration of such Suspension 

 

- 7 -

 

Period in accordance with Section 3(k); and

 

(F)       if, under applicable law, the Company has more than one option as to the type or manner of making any such filing, the Company shall make the required filing or filings in the manner or of a type that is reasonably expected to result in the earliest availability of a Prospectus for effecting resales of Registrable Securities.

 

(ii)       Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder (regardless of when such Holder became a Notice Holder) shall be named as a selling securityholder in a Shelf Registration Statement or related Prospectus in accordance with the requirements of this Section 2(d) or Section 2(a), as applicable.

 

(e)        The parties hereto agree that the Holders of Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if:

 

(i)        the Initial Shelf Registration Statement has not been filed with the SEC on or prior to the Filing Deadline Date;

 

(ii)       the Initial Shelf Registration Statement has not become effective under the Securities Act on or prior to the Effectiveness Deadline Date;

 

(iii)      either a supplement to a Prospectus, a post-effective amendment or a Subsequent Shelf Registration Statement is required to be filed with the SEC and fails to be filed with the SEC within the prescribed period and in the manner set forth in Section 2(d) (the date such filing is required to be made being an “Additional Filing Deadline Date”) or, in the case of a post-effective amendment or a Subsequent Shelf Registration Statement, such post-effective amendment or Subsequent Registration Statement does not become effective under the Securities Act by the Amendment Effectiveness Deadline Date or the Subsequent Shelf Registration Statement Effectiveness Deadline Date, as the case may be;

 

(iv)      the Initial Shelf Registration Statement or any Subsequent Registration Statement is filed with the SEC and becomes effective under the Securities Act but shall thereafter cease to be effective (without being succeeded immediately by a new Registration Statement that is filed and immediately becomes effective under the Securities Act) or usable for the offer and sale of Registrable Securities in the manner contemplated by this Agreement for a period of time (including any Suspension Period) which shall exceed forty five (45) days in the aggregate in any three (3) month period or ninety (90) days in the aggregate in any twelve (12) month period; or

 

(v)       any Registration Statement or amendment thereto, at the time it becomes effective under the Securities Act, or any Prospectus relating thereto, at the time it is filed with the SEC or, if later, at the time the Registration Statement to which such Prospectus relates becomes effective under the Securities Act, shall fail to name each Holder as a selling securityholder in such a manner as to permit such Holder to sell its Registrable Securities pursuant to such Registration Statement and Prospectus in accordance with 

 

- 8 -

 

applicable law, which Holder was entitled, pursuant to the terms of this Agreement, to be so named (it being understood that, without limitation, naming such Holder in a manner that permits such Holder to sell only a portion of such Holder’s Registrable Securities referenced in such Holder’s Notice and Questionnaire shall be deemed to be an “Event” (as defined below) for purposes of this clause (v)).

 

Each of the events of a type described in any of the foregoing clauses (i) through (v) are individually referred to herein as an “Event,” and

 

	
             
 	
            (V)
 	
            the Filing Deadline Date, in the case of clause (i) above,
 

 

	
             
 	
            (W)
 	
            the Effectiveness Deadline Date, in the case of clause (ii) above,
 

 

(X)       the Additional Filing Deadline Date, the Amendment Effectiveness Deadline Date or the Subsequent Shelf Registration Statement Effectiveness Deadline Date, as the case may be, in the case of clause (iii) above,

 

(Y)       the date on which the duration of the ineffectiveness or unusability of the Shelf Registration Statement exceeds the number of days permitted by clause (iv) above, in the case of clause (iv) above, and

 

(Z)       the date the applicable Registration Statement or amendment thereto shall become effective under the Securities Act, or the date the applicable Prospectus is filed with the SEC or, if later, the time the Registration Statement to which such Prospectus relates becomes effective under the Securities Act, as the case may be, in the case of clause (v) above,

 

are each herein referred to as an “Event Date.”  Events shall be deemed to continue until the following dates with respect to the respective types of Events:

 

(A)       the date the Initial Shelf Registration Statement is filed with the SEC, in the case of an Event of the type described in clause (i) above;

 

(B)       the date the Initial Shelf Registration Statement becomes effective under the Securities Act, in the case of an Event of the type described in clause (ii) above;

 

(C)       the date a supplement to a Prospectus, a post-effective amendment or a Subsequent Shelf Registration Statement, whichever is required, is filed with the SEC (in the case of a supplement) or becomes effective under the Securities Act (in the case of a post-effective amendment or a Subsequent Shelf Registration Statement), in the case of an Event of the type described in clause (iii) above;

 

(D)       the date the Initial Shelf Registration Statement or the Subsequent Shelf Registration Statement, as the case may be, becomes effective and usable again, or the date another Subsequent Shelf Registration Statement is filed with the SEC pursuant to Section 2(b) and becomes effective, in the case of an Event of the type described in clause (iv) above; or

 

(E)       the date a supplement to the Prospectus is filed with the SEC, or the date a post-effective amendment to the Registration Statement becomes effective under the Securities Act, or the date a Subsequent Shelf Registration Statement becomes effective 

 

- 9 -

 

under the Securities Act, which supplement, post-effective amendment or Subsequent Shelf Registration Statement, as the case may be, names as selling securityholders, in such a manner as to permit them to sell their Registrable Securities pursuant to the Registration Statement and Prospectus supplement in accordance with applicable law, all Holders entitled as herein provided to be so named, in the case of an Event of the type described in clause (v) above.

 

Accordingly, commencing on (and including) any Event Date and ending on (but excluding) the next date on which there are no Events that have occurred and are continuing (an “Additional Interest Accrual Period”), the Company agrees to pay, as additional interest (“additional interest”) and not as a penalty, an amount (the “Additional Interest Amount”) at the rate described below, payable periodically on each Additional Interest Payment Date (or such earlier date as may be specified in the Indenture) to Record Holders, to the extent of, for each such Additional Interest Payment Date, the unpaid Additional Interest Amount that has accrued to (but excluding) such Additional Interest Payment Date (or, if the Additional
Interest Accrual Period shall have ended prior to such Additional Interest Payment Date, the day immediately after the last day of such Additional Interest Accrual Period). 

 

The Additional Interest Amount shall accrue at a rate per annum equal to one half of one percent (0.5%) for the ninety (90) day period beginning on, and including, the Event Date and thereafter at a rate per annum equal to one percent (1.0%) of (i) the aggregate principal amount of the Notes of which such Record Holders were holders of record at the close of business on the applicable Record Date or, without duplication, (ii) in the case of Underlying Common Stock, the aggregate principal amount of Notes in respect of which such Common Stock was issued of which such Record Holders were holders of record at the close of business on the applicable Record Date, as the case may be; provided, however, that:

 

(I)        no Additional Interest Amounts shall accrue as to any Covered Security from and after the earlier of (x) the date such Covered Security is no longer a Registrable Security and (y) the expiration of the Effectiveness Period (it being understood that this clause (I) shall not impair any right of any Holder to receive Additional Interest Amounts that have accrued prior to the earlier of (x) the date that such Covered Security is no longer a Registrable Security and (y) the expiration of the Effectiveness Period);

 

(II)       only those Holders (or their subsequent transferees) failing to be named as selling securityholders in the manner prescribed in Section 2(e)(v) above shall be entitled to receive any Additional Interest Amounts that have accrued solely with respect to an Event of the type described in Section 2(e)(v) above (it being understood that this clause (II) shall not impair any right of any Holder to receive Additional Interest Amounts that have accrued with respect to an Event other than an Event of the type described in Section 2(e)(v) above);

 

(III)      only those Holders (or their subsequent transferees) whose delivery of a Notice and Questionnaire gave rise to the obligation of the Company, pursuant to Section 2(d)(i), to file and, if applicable, make effective under the Securities Act the supplement, post-effective amendment or Subsequent Shelf Registration Statement referred to in Section 2(e)(iii) above shall be entitled to receive any Additional Interest Amounts that have accrued solely with respect to an Event of the type described in Section 2(e)(iii) above (it being understood that this clause (III) shall not impair any right of any Holder to receive Additional Interest Amounts that have accrued with respect to an Event other than an Event of the type described in Section 2(e)(iii) above); 

 

- 10 -

 

 

(IV)     only those Holders (or their subsequent transferees) who became Notice Holders prior to the date referred to in Section 2(e)(D) above shall be entitled to receive any Additional Interest Amounts that have accrued solely with respect to an Event of the type described in Section 2(e)(iv) above (it being understood that this clause (IV) shall not impair any right of any Holder to receive Additional Interest Amounts that have accrued with respect to an Event other than an Event of the type described in Section 2(e)(iv) above; and

 

(V)       if a Note ceases to be outstanding during an Additional Interest Accrual Period for which an Additional Interest Amount would be payable with respect to such Note, then the Additional Interest Amount payable hereunder with respect to such Note shall be prorated on the basis of the number of full days such Note is outstanding during such Additional Interest Accrual Period.

 

(i) The rate of accrual of the Additional Interest Amount with respect to any period shall not exceed the rate provided for in this Section 2(e) notwithstanding the occurrence of multiple concurrent Events and (ii) following the cure of all Events requiring the payment by the Company of Additional Interest Amounts to the Holders pursuant to this Section, the accrual of Additional Interest Amounts shall cease (without in any way limiting the effect of any subsequent Event requiring the payment of Additional Interest Amounts by the Company). All installments of additional interest shall be paid by wire transfer of immediately available funds to the account specified by the Notice Holder or, if no such account is specified, by mailing a check to such Notice Holder’s address shown in the register of the registrar for the Notes or for the Underlying Common Stock, as the case may be.

 

All of the Company’s obligations set forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such Registrable Security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(n)).

 

The parties hereto agree that the additional interest provided for in this Section 2(e) constitutes a reasonable estimate of the damages that may be incurred by Holders by reason of an Event, including, without limitation, the failure of a Shelf Registration Statement to be filed, become effective under the Securities Act, amended or replaced to include the names of all Notice Holders or available for effecting resales of Registrable Securities in accordance with the provisions hereof. 

 

(f)        The Trustee shall be entitled, on behalf of Holders, to seek any available remedy for the enforcement of this Agreement, including for the payment of any Additional Interest Amount; provided that any Additional Interest Amounts set forth herein shall be the exclusive monetary remedy available to the applicable Holders for any and all Events covered hereby.

 

3.         Registration Procedures. In connection with the registration obligations of the Company under Section 2 hereof, the Company shall:

 

(a)        Prepare and file with the SEC a Shelf Registration Statement or Shelf Registration Statements in the manner provided in this Agreement and use its best efforts to cause each such Shelf Registration Statement to become effective under the Securities Act and remain effective under the Securities Act as provided herein; provided that, before filing any Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the SEC, 

 

- 11 -

 

the Company shall furnish to the Bookrunner and counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) copies of all such documents proposed to be filed and reflect in each such document when so filed with the SEC such comments as the Bookrunner or such counsel reasonably shall propose within three (3) Business Days of the delivery of such copies to the Bookrunner and such counsel. Each Registration Statement that is or is required by this Agreement to be filed with the SEC shall be filed on Form S-3 if the Company is then eligible to use Form S-3 for the purposes contemplated by this Agreement, or, if the Company is not then so eligible to use Form S-3, shall be on Form S-1 or another appropriate form that is then available to the Company for the purposes contemplated by this Agreement. Each such Registration Statement that is filed on Form
S-3 shall constitute an Automatic Shelf Registration Statement if the Company is then eligible to file an Automatic Shelf Registration Statement on Form S-3 for the purposes contemplated by this Agreement. If, at the time any Registration Statement is filed with the SEC, the Company is eligible, pursuant to Rule 430B(b), to omit, from the prospectus that is filed as part of such Registration Statement, the identities of selling securityholders and amounts of securities to be registered on their behalf, then the Company shall prepare and file such Registration Statement in a manner as to permit such omission and to allow for the subsequent filing of such information in a prospectus pursuant to Rule 424(b) in the manner contemplated by Rule 430B(d).

 

(b)       Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement or Subsequent Shelf Registration Statement continuously effective until the expiration of the Effectiveness Period; cause the related Prospectus to be supplemented by any required Prospectus supplement and, as so supplemented, to be filed with the SEC pursuant to Rule 424; and comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by each Shelf Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented.

 

(c)        If the third anniversary of the initial effective date of any Registration Statement (within the meaning of Rule 415(a)(5) under the Securities Act) shall occur at any time during the Effectiveness Period, file with the SEC, prior to such third anniversary, a new Registration Statement covering the Registrable Securities, in the manner contemplated by, and in compliance with, Rule 415(a)(6), and use its best efforts to cause such new Registration Statement to become effective under the Securities Act as soon as practicable, but in any event within 180 days after such third anniversary. Each such new Registration Statement, if any, shall be deemed, for purposes of this Agreement, to be a Subsequent Shelf Registration Statement.

 

(d)       If, at any time during the Effectiveness Period, any Registration Statement shall cease to comply with the requirements of the Securities Act with respect to eligibility for the use of the form on which such Registration Statement was filed with the SEC (or if such Registration Statement constituted an Automatic Shelf Registration Statement at the time it was filed with the SEC and shall thereafter cease to constitute an Automatic Shelf Registration Statement, or if the Company shall have received from the SEC, a notice, pursuant to Rule 401(g)(2) under the Securities Act, of objection to the use of the form on which such Registration Statement was filed with the SEC), (i) promptly give notice to the Notice Holders and counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) and to
the Bookrunner and (ii) promptly file with the SEC a new Registration Statement under the Securities Act, or a post-effective amendment to such Registration Statement, to effect compliance with the Securities Act. The Company shall use its best efforts to cause such new Registration Statement or post-effective amendment to become effective under the Securities Act as soon as practicable and shall 

 

- 12 -

 

promptly give notice of such effectiveness to the Notice Holders and counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) and to the Bookrunner. Each such new Registration Statement, if any, shall be deemed, for purposes of this Agreement, to be a Subsequent Shelf Registration Statement.

 

(e)        As promptly as practicable, give notice to the Notice Holders, the Bookrunner and counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders):

 

(i)        when any Prospectus, Prospectus supplement, Shelf Registration Statement or post-effective amendment to a Shelf Registration Statement has been filed with the SEC and, with respect to a Shelf Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act,

 

(ii)       of any request, following the effectiveness of a Shelf Registration Statement under the Securities Act, by the SEC or any other governmental authority for amendments or supplements to such Shelf Registration Statement or the related Prospectus or for additional information,

 

(iii)      of the issuance by the SEC or any other governmental authority of any stop order suspending the effectiveness of any Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose,

 

(iv)      of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose,

 

(v)       after the effective date of any Shelf Registration Statement filed with the SEC pursuant to this Agreement, of the occurrence of (but not the nature of or details concerning) a Material Event, and

 

(vi)      of the determination by the Company that a post-effective amendment to a Shelf Registration Statement or a Subsequent Shelf Registration Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as required pursuant to Section 3(k)), state that it constitutes a Suspension Notice, in which event the provisions of Section 3(k) shall apply.

 

(f)        Use its best efforts to (i) prevent the issuance of, and, if issued, to obtain the withdrawal of, any order suspending the effectiveness of a Shelf Registration Statement and (ii) obtain the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case at the earliest possible moment, and provide prompt notice to each Notice Holder and the Bookrunner, and counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders), of the withdrawal or lifting of any such order or suspension.

 

(g)       If requested by the Bookrunner or any Notice Holder, as promptly as practicable incorporate in a Prospectus supplement or a post-effective amendment to a Shelf Registration Statement such information as the Bookrunner, such Notice Holder or counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) shall determine to be required to be included therein by applicable law and make any required filings of such 

 

- 13 -

 

Prospectus supplement or such post-effective amendment; provided, however, that the Company shall not be required to take any actions under this Section 3(g) that, in the written opinion of counsel for the Company, are not in compliance with applicable law.

 

(h)       As promptly as practicable, furnish to each Notice Holder, counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) and the Bookrunner, without charge, at least one (1) conformed copy of each Shelf Registration Statement and each amendment thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits (unless requested in writing to the Company by such Notice Holder, such counsel or the Bookrunner).

 

(i)        During the Effectiveness Period, deliver to each Notice Holder, counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) and the Bookrunner, in connection with any sale of Registrable Securities pursuant to a Shelf Registration Statement, without charge, as many copies of the Prospectus or Prospectuses relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Notice Holder or the Bookrunner may reasonably request; and the Company hereby consents (except during such periods that a Suspension Notice is outstanding and has not been revoked) to the use of such Prospectus and each amendment or supplement thereto by each Notice Holder, in connection with any offering and sale of the Registrable Securities covered
by such Prospectus or any amendment or supplement thereto in the manner set forth therein.

 

(j)        Prior to any public offering of the Registrable Securities pursuant to a Shelf Registration Statement, use its best efforts to register or qualify or cooperate with the Notice Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Notice Holder reasonably requests in writing (which request may be included in the Notice and Questionnaire); use its best efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period in connection with such Notice Holder’s offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption
therefrom) and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the relevant Shelf Registration Statement and the related Prospectus; provided, however, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified; (ii) take any action that would subject it to general service of process in suits, other than those arising out of the offering or sale of Registrable Securities or arising in connection with this Agreement, in any jurisdiction where it is not now so subject; or (iii) take any action that would subject it to taxation in any jurisdiction where it is not then so subject.

 

(k)       Upon: (A) the occurrence or existence of any pending corporate development (a “Material Event”) that, in the reasonable discretion of the Company, makes it appropriate to suspend the availability of any Shelf Registration Statement and the related Prospectus; (B) the issuance by the SEC of a stop order suspending the effectiveness of any Shelf Registration Statement or the initiation of proceedings with respect to any Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act; or (C) the occurrence of any event or the existence of any fact as a result of which any Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements 

 

- 14 -

 

therein, in the light of the circumstances under which they were made, not misleading,

 

(i)        in the case of clause (A) or (C) above, subject to the next sentence, as promptly as practicable, prepare and file, if necessary pursuant to applicable law, a post-effective amendment to such Shelf Registration Statement or a supplement to such Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Shelf Registration Statement and Prospectus so that such Shelf Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and so that such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Shelf Registration Statement, subject to the next sentence, use its best efforts to cause it to become effective under the Securities Act as promptly as practicable, and

 

(ii)       give notice to the Notice Holders and counsel for the Holders and for the Bookrunner (or, if applicable, separate counsel for the Holders) and to the Bookrunner that the availability of the Shelf Registration Statement is suspended (a “Suspension Notice”) (and, upon receipt of any Suspension Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to such Shelf Registration Statement until such Notice Holder’s receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above or until such Notice Holder is advised in writing by the Company that the Prospectus may be used).

 

The Company will use its best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as soon as, in the reasonable discretion of the Company, such suspension is no longer appropriate, (y) in the case of clause (B) above, as promptly as is practicable, and (z) in the case of clause (C) above, as soon as, in the reasonable judgment of the Company, the Shelf Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The period during which the availability of the Shelf
Registration Statement and any Prospectus may be suspended (the “Suspension Period”) without the Company incurring any obligation to pay additional interest pursuant to Section 2(e) shall not exceed forty five (45) days in the aggregate in any three (3) month period or ninety (90) days in the aggregate in any twelve (12) month period. The Effectiveness Period shall be extended by the number of days from and including the date of the giving of the Suspension Notice to and including the date on which the Notice Holder received copies of the supplemented or amended Prospectus provided in clause (i) above, or the date on which it is advised in writing by the Company that the Prospectus may be used and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus.

 

(l)        Make available for inspection during normal business hours by representatives for the Notice Holders and any underwriters participating in any disposition pursuant to any Shelf Registration Statement and any broker-dealers, attorneys and accountants retained by such Notice Holders or any such underwriters, all relevant financial and other records and pertinent corporate 

 

- 15 -

 

documents and properties of the Company and its subsidiaries, and cause the appropriate officers, directors and employees of the Company and its subsidiaries to make available for inspection during normal business hours all relevant information reasonably requested by such representatives for the Notice Holders, or any such underwriters, broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar “due diligence” examinations; provided, however, that such persons shall, at the Company’s request, first agree in writing with the Company that any information that is reasonably and in good faith designated by the Company in writing as confidential at the time of delivery of such information shall be kept confidential by such
persons and shall be used solely for the purposes of exercising rights under this Agreement, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of governmental or regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of any Shelf Registration Statement or the use of any Prospectus referred to in this Agreement) or necessary to defend or prosecute a claim brought against or by any such persons (e.g., to establish a “due diligence” defense), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by any such person or (iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a
confidentiality agreement or is not otherwise under a duty of trust to the Company; provided further, that the foregoing inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the counsel, referred to in Section 5, for the Holders in connection with Shelf Registration Statements.

 

(m)      Comply with all applicable rules and regulations of the SEC; and make generally available to its securityholders earnings statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act), which statements shall cover a period of twelve (12) months commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of each Shelf Registration Statement (within the meaning of Rule 158(c) under the Securities Act), and which statements shall be so made generally available to the Company’s securityholders as follows: (i) with respect to an earnings statement which will be contained in one report on Form 10-K (or any other form as may then be available for such purpose),
such earnings statement shall be made so generally available no later than the due date by which the Company is required, pursuant to the Exchange Act, to file such report with the SEC; and (ii) with respect to an earnings statement which will be contained in any combination of reports on Form 10-K or Form 10-Q (or any other form(s) as may then be available for such purpose), such earnings statement shall be made so generally available no later than the due date by which the Company is required, pursuant to the Exchange Act, to file the last of such reports which together constitute such earnings statement.

 

(n)       Cooperate with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold pursuant to a Shelf Registration Statement, which certificates shall not bear any restrictive legends, and cause such Registrable Securities to be in such denominations as are permitted by the Indenture and registered in such names as such Notice Holder may request in writing at least two (2) Business Days prior to any sale of such Registrable Securities.

 

(o)       Provide a CUSIP number (and, in the case of the Notes, ISIN and Common Code numbers) for all Registrable Securities covered by a Shelf Registration Statement not later than the effective date of the Initial Shelf Registration Statement and, in the case of the Notes, provide 

 

- 16 -

 

the Trustee with certificates for the Notes that are in a form eligible for deposit with The Depository Trust Company or, if requested by the Bookrunner or Holders of a majority of the then outstanding Notes, Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, société anonyme, and take all other action necessary to enable Holders of the Notes to hold their interests in the Notes in book-entry form through such clearance system.

 

(p)       Cooperate and assist in any filings required to be made with the National Association of Securities Dealers, Inc.

 

(q)       Upon the filing of the Initial Shelf Registration Statement, and upon the effectiveness under the Securities Act of the Initial Shelf Registration Statement, announce the same, in each case by release through a reputable national newswire service, subject to applicable law.

 

(r)        In connection with any underwritten offering of Registrable Securities, take all actions and enter into such customary agreements (including, if requested, an underwriting agreement in customary form) as are necessary, or reasonably requested by the Holders of a majority of the Registrable Securities being sold, in order to expedite or facilitate disposition of such Registrable Securities; and in such connection:

 

(i)        the Company shall make such representations and warranties to the Holders of such Registrable Securities and the underwriters, if any, in form, substance and scope as would be customarily made by the Company to underwriters in similar offerings of securities;

 

(ii)       the Company shall obtain opinions of counsel of the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the counsel to the Holders of the Registrable Securities being sold) addressed to each selling Holder and the underwriters, if any, covering the matters that would be customarily covered in opinions requested in sales of securities;

 

(iii)      the Company shall obtain “comfort letters” and updates thereof from the Company’s independent certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in any Shelf Registration Statement) addressed to the underwriters, if any, and the selling Holders of Registrable Securities (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts), such letters to be in customary form and covering matters of the type that would customarily be covered in “comfort letters” to underwriters in connection with similar underwritten offerings;

 

(iv)      the Company shall, if an underwriting agreement is entered into, cause any such underwriting agreement to contain indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 6 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section; and

 

(v)       the Company shall deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority of the Registrable Securities being sold;

 

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the above to be done at each closing under any underwriting or similar agreement as and to the extent required thereunder.

 

(s)        Cause the Indenture to be qualified under the TIA not later than the effective date of the Initial Shelf Registration Statement; and, in connection therewith, cooperate with the Trustee to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use its best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner.

 

(t)        Use its best efforts to cause the Underlying Common Stock to be listed on the American Stock Exchange LLC.

 

(u)       In the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or “participate in a public offering” (within the meaning of the Conduct Rules (the “NASD Rules”) of the National Association of Securities Dealers, Inc.) thereof, whether as a Holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such NASD Rules, including, without limitation, by: (i) if such NASD Rules, including NASD Rule 2720, shall so require, engaging a “qualified independent underwriter” (as
defined in NASD Rule 2720) to participate in the preparation of the Shelf Registration Statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereof and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield or price, as the case may be, of such Registrable Securities; (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof; and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the NASD Rules.

 

4.         Holder’s Obligations. Each Holder agrees, by acquisition of the Registrable Securities, that no Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to a Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(d) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice
Holder and the distribution of such Registrable Securities as the Company may from time to time reasonably request. Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the Holder Information of such Holder furnished in writing by or on behalf of such Holder to the Company does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements in such Holder Information, in the light of the circumstances under which they were made, not misleading.

 

5.         Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance by the Company of its obligations under Section 2 and Section 3 of this Agreement whether or not any of the Shelf Registration Statements are filed or declared effective under 

 

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the Securities Act. Such fees and expenses (“Registration Expenses”) shall include, without limitation, (i) all registration and filing fees and expenses (including, without limitation, fees and expenses (x) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (y) of compliance with federal securities laws and state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel for the Holders in connection with Blue Sky qualifications of the Registrable Securities under the laws of such jurisdictions as the Notice Holders of a majority of the Registrable Securities being sold pursuant to a Shelf Registration Statement may designate), (ii) all printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company and printing Prospectuses), (iii) all duplication and mailing expenses relating to copies of any Shelf Registration Statement or Prospectus delivered to any Holders hereunder, (iv) all fees and disbursements of counsel for the Company, (v) reasonable fees and disbursements of one counsel for all of the sellers of Registrable Securities (selected by the Holders of a majority of the Registrable Securities being sold, which counsel shall be reasonably satisfactory to the Company) in connection with the review of the Shelf Registration Statement and all other documents referred to in this Agreement, (vi) all fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock and (vii) Securities Act liability insurance obtained by the Company in its sole discretion. In addition, the Company shall pay the internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the fees and expenses incurred in connection with the listing by the Company of the Registrable Securities on any securities exchange or quotation system on which similar securities of the Company are then listed and the fees and expenses of any person, including, without limitation, special experts, retained by the Company. If the Company shall, pursuant to Rule 456(b), defer payment of any registration fees due under the Securities Act with respect to any Registration Statement, the Company agrees that it shall pay the fees applicable to such Registration Statement within the time required by Rule 456(b)(1)(i) (without reliance on the proviso to Rule 456(b)(1)(i)) and in compliance with Rule 456(b) and Rule 457(r).

 

	
             
  	
            6.
 	
            Indemnification, Contribution.
 

 

(a)        The Company agrees to indemnify, defend and hold harmless the Bookrunner, each Holder, each person (a “Controlling Person”), if any, who controls the Bookrunner or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the respective officers, directors, partners, employees, representatives and agents of the Bookrunner, the Holders or any Controlling Person (each, an “Indemnified Party”), from and against any loss, damage, expense, liability, claim or any actions in respect thereof (including the reasonable cost of investigation) which such Indemnified Party may incur or become subject to under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, damage, expense, liability, claim or action arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement or Prospectus, including any document incorporated by reference therein, or in any amendment or supplement thereto or in any preliminary prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in any Shelf Registration Statement or in any amendment or supplement thereto or necessary to make the statements therein not misleading, or arises out of or is based upon any omission or alleged omission to state a material fact necessary in order to make the statements made in any Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, in the light of the circumstances under which such statements were made, not misleading, and the Company shall reimburse, as incurred, the Indemnified Parties for any
legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, damage, expense, liability, claim or action in respect thereof; provided, however, that the Company shall not be required to provide any 

 

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indemnification pursuant to this Section 6(a) in any such case insofar as any such loss, damage, expense, liability, claim or action arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission of a material fact contained in, or omitted from, and in conformity with information furnished in writing by or on behalf of the Bookrunner or a Holder to the Company expressly for use in, any Shelf Registration Statement or any Prospectus; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party.

 

(b)       Each Holder, severally and not jointly, agrees to indemnify, defend and hold harmless the Company, its directors, officers, employees, representatives and agents and any person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Company Indemnified Party”) from and against any loss, damage, expense, liability, claim or any actions in respect thereof (including the reasonable cost of investigation) which such Company Indemnified Party may incur or become subject to under the Securities Act, the Exchange Act or otherwise, insofar as such loss, damage, expense, liability, claim or action arises out of or is based upon (A) any untrue statement or alleged untrue statement of a material fact contained in,
and in conformity with information (the “Holder Information”) furnished in writing by or on behalf of such Holder to the Company expressly for use in, any Shelf Registration Statement or Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such Holder Information, which material fact was not contained in such Holder Information, and which material fact was either required to be stated in any Shelf Registration Statement or Prospectus or necessary to make such Holder Information not misleading, (B) a sale, by such Holder pursuant to a Shelf Registration Statement in or with respect to which such Holder is named as a selling securityholder, of Registrable Securities during a Suspension Period, provided that the Company shall have theretofore provided such Holder a Suspension Notice in accordance with Section 3(k), or (C) a public sale of Registrable Securities
by such Holder without delivery, if required by the Securities Act, of the most recent applicable Prospectus provided to such Holder by the Company pursuant to Section 3(i) or Section 2(d)(i)(C), provided the Company shall have theretofore made available to or provided such Holder copies of such Prospectus in a timely manner so as to permit such delivery; and, subject to the limitation set forth in the immediately preceding clause, each Holder shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, damage, expense, liability, claim or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons. In no event shall the liability of any selling Holder of Registrable Securities hereunder be greater in amount than the dollar amount of the
proceeds received by such Holder upon the sale, pursuant to the Shelf Registration Statement, of the Registrable Securities giving rise to such indemnification obligation.

 

(c)        If any action, suit or proceeding (each, a “Proceeding”) is brought against any person in respect of which indemnity may be sought pursuant to either Section 6(a) or Section 6(b), such person (the “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (the “Indemnifying Party”) in writing of the institution of such Proceeding and the Indemnifying Party shall assume the defense of such Proceeding; provided, however, that the omission to so notify such Indemnifying Party shall not relieve such Indemnifying Party from any
liability which it may have to such Indemnified Party or otherwise. Such Indemnified Party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless the employment of such counsel shall have been authorized in writing by such Indemnifying Party in connection with the defense of such Proceeding or such Indemnifying Party shall not have 

 

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employed counsel to have charge of the defense of such Proceeding within thirty (30) days of the receipt of notice thereof or such Indemnified Party shall have reasonably concluded upon the written advice of counsel that there may be one or more defenses available to it that are different from, additional to or in conflict with those available to such Indemnifying Party (in which case such Indemnifying Party shall not have the right to direct that portion of the defense of such Proceeding on behalf of the Indemnified Party, but such Indemnifying Party may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Indemnifying Party), in any of which events such reasonable fees and expenses shall be borne by such Indemnifying Party and paid as incurred (it being understood, however, that such Indemnifying Party shall not
be liable for the expenses of more than one separate counsel in any one Proceeding or series of related Proceedings together with reasonably necessary local counsel representing the Indemnified Parties who are parties to such action). An Indemnifying Party shall not be liable for any settlement of such Proceeding effected without the written consent of such Indemnifying Party, but if settled with the written consent of such Indemnifying Party, such Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested an Indemnifying Party to reimburse such Indemnified Party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then such Indemnifying Party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than sixty (60) Business Days after receipt by such Indemnifying Party of the aforesaid request, (ii) such Indemnifying Party shall not have fully reimbursed such Indemnified Party in accordance with such request prior to the date of such settlement and (iii) such Indemnified Party shall have given such Indemnifying Party at least thirty (30) days’ prior notice of its intention to settle. No Indemnifying Party shall, without the prior written consent of any Indemnified Party, effect any settlement of any pending or threatened Proceeding in respect of which such Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault or culpability or a failure to act by or on behalf of such Indemnified
Party.

 

(d)       If the indemnification provided for in this Section 6 is unavailable to an Indemnified Party under Section 6(a) or Section 6(b), or insufficient to hold such Indemnified Party harmless, in respect of any losses, damages, expenses, liabilities, claims or actions referred to therein, then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, damages, expenses, liabilities, claims or actions (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and by the Holders or the Bookrunner, on the other hand, from the offering of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Holders or the Bookrunner, on the other hand, in connection with the statements or omissions which resulted in such losses, damages, expenses, liabilities, claims or actions, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and of the Holders or the Bookrunner, on the other hand, shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Holders or the Bookrunner and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the 

 

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losses, damages, expenses, liabilities, claims and actions referred to above shall be deemed to include any reasonable legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any Proceeding.

 

(e)        The Company, the Holders and the Bookrunner agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in Section 6(d) above. Notwithstanding the provisions of this Section 6, no Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities giving rise to such contribution obligation and sold by such Holder were offered to the public exceeds the amount of any damages which it has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ respective obligations to contribute pursuant to this Section 6 are several in proportion to the respective amount of Registrable Securities they have sold pursuant to a Shelf Registration Statement, and not joint. The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

(f)        The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder or the Bookrunner or any person controlling any Holder or the Bookrunner, or the Company, or the Company’s officers or directors or any person controlling the Company and (iii) the sale of any Registrable Security by any Holder.

 

	
             
  	
            7.
 	
            Information Requirements.
 

 

(a)        The Company covenants that, if at any time before the end of the Effectiveness Period it is not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder of Registrable Securities and take such further action as any Holder of Registrable Securities may reasonably request in writing (including, without limitation, making such representations as any such Holder may reasonably request), all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemptions provided by Rule 144, Rule 144A, Regulation S and Regulation D under the Securities Act and customarily taken in connection with sales pursuant to such exemptions. Upon the written request of any Holder, the Company shall
deliver to such Holder a written statement as to whether the Company has complied with the reporting requirements of the Exchange Act, unless such a statement has been included in the Company’s most recent report filed with the SEC pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities (other than the Common Stock) under any section of the Exchange Act.

 

(b)       The Company shall file the reports required to be filed by it under the Exchange Act and shall comply with all other requirements set forth in the instructions to Form S-3 in order to allow the Company to be eligible to file registration statements on Form S-3 (or Form S-1 if the Company is not eligible to use Form S-3). The Company shall use its best efforts to remain eligible, pursuant to Rule 430B(b), to omit, from the prospectus that is filed as part of a Registration Statement, the identities of selling securityholders and amounts of securities to be 

 

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registered on their behalf.

 

	
             
  	
            8.
 	
            Miscellaneous.
 

 

(a)        Remedies. The Company acknowledges and agrees that any failure by the Company to comply with its obligations under this Agreement may result in material irreparable injury to the Bookrunner and the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Bookrunner or any Holder may obtain such relief as may be required to specifically enforce the Company’s obligations under this Agreement. The Company further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. Notwithstanding the foregoing two sentences, this Section 8(a) shall not apply to the subject matter referred to in and contemplated by
Section 2(e), as limited by Section 2(f).

 

(b)       No Conflicting Agreements. The Company is not, as of the date hereof, a party to, nor shall it, on or after the date of this Agreement, enter into, any agreement with respect to the Company’s securities that conflicts with the rights granted to the Holders in this Agreement. The Company represents and warrants that the rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company’s securities under any other agreements. The Company will not take any action with respect to the Registrable Securities that would adversely affect the ability of any of the Holders to include such Registrable Securities in a registration undertaken pursuant to this Agreement. The Company represents and covenants that it has not
granted, and shall not grant, to any of its securityholders (other than the Holders in such capacity) the right to include any of the Company’s securities in any Shelf Registration Statement filed pursuant to this Agreement.

 

(c)        Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of outstanding Registrable Securities; provided, however, that, no consent is necessary from any of the Holders in the event that this Agreement is amended, modified or supplemented for the purpose of curing any ambiguity, defect or inconsistency that does not adversely affect the rights of any Holders. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders of Registrable Securities may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Shelf Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. Each Holder of Registrable Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 8(c), whether or
not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Registrable Securities or is delivered to such Holder.

 

(d)       Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, by telecopier, by courier guaranteeing overnight delivery or by first-class mail, return receipt requested, and shall be deemed given (A) when made, if made by hand delivery, (B) upon confirmation, if made by telecopier, (C) one (1) 

 

- 23 -

 

Business Day after being deposited with such courier, if made by overnight courier or (D) on the date indicated on the notice of receipt, if made by first-class mail, to the parties as follows:

 

(i)        if to a Holder, at the most current address given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto;

 

	
             
  	
            (ii)
 	
            if to the Company, to:
 

 

BMB Munai, Inc.

202, Dostyk Avenue, 4th Floor

Business Centre “Forum”

050051, Almaty

Kazakhstan

Fax: +732 72 375 131

Attention: Askar Tashtitov

 

and

 

BMB Munai, Inc.

324 South 400 West, Suite 225

Salt Lake City, Utah 84101

United States of America

Fax: +1 801 355 2990

Attention: Adam Cook

 

	
             
  	
            (iii)
 	
            if to the Bookrunner, to:
 

 

Investment Markets and Investment Banking

Bayerische Hypo-und Vereinsbank AG

Moor House

120 London Wall

London EC2Y 5ET

	
             
 	
            Fax:
 	
            +44 (0)207 826 1614
 

Attention: Equity Capital Markets

 

or to such other address as such person may have furnished to the other persons identified in this Section 8(d) in writing in accordance herewith.

 

(e)        Majority of Registrable Securities. For purposes of determining what constitutes Holders of a majority of Registrable Securities, as referred to in this Agreement, a majority shall constitute a majority in aggregate principal amount of Registrable Securities, treating each relevant holder of shares of Underlying Common Stock of the Notes as a holder of the aggregate principal amount of Notes in respect of which such Common Stock was issued.

 

(f)        Approval of Holders. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its “affiliates” (as such term is defined in Rule 405 under the Securities Act) (other than Holders of Registrable Securities, if such Holders are deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

 

- 24 -

 

(g)       Third Party Beneficiaries. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Bookrunner, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. The Trustee shall be entitled to the rights granted to it pursuant to this Agreement.

 

(h)       Successors and Assigns. Any person who purchases any Covered Security from any Holder shall be deemed, for purposes of this Agreement, to be an assignee of such Holder. This Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of each of the parties hereto and shall inure to the benefit of and be binding upon each Holder of any Covered Security.

 

(i)        Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement.

 

(j)        Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(k)       Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

(l)        Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

 

(m)      Entire Agreement. This Agreement is intended by the parties hereto as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Registrable Securities. Except as provided in the Placement Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and undertakings among the parties with respect to such registration rights. No party hereto shall have any
rights, duties or obligations other than those specifically set forth in this Agreement.

 

(n)       Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities or obligations under Section 4, Section 5 or Section 6 hereof and the obligations to make payments of and provide for additional interest under Section 2(e) hereof to the extent such additional interest accrues prior to the end of the Effectiveness Period and to the extent any overdue additional interest accrues in accordance with the last paragraph of such Section 2(e), each of which shall remain in effect in accordance with its terms.

 

- 25 -

 

(o)       Submission to Jurisdiction. Except as set forth below, no claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement (“Claim”) may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company hereby consents to the jurisdiction of such courts and personal service with respect thereto. The Company hereby consents to personal jurisdiction, service and venue in any court in which any Claim
arising out of or in any way relating to this Agreement is brought by any third party against the Bookrunner. THE COMPANY HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT. The Company agrees that a final judgment in any such Proceeding brought in any such court shall be conclusive and binding upon the Company and may be enforced in any other courts in the jurisdiction of which the Company is or may be subject, by suit upon such judgment.

 

[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]

 

- 26 -

 

                        IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

Very truly yours,

 

BMB MUNAI, INC.

 

By:______________
Name:____________
Title:_____________ 

 

Accepted and agreed to as of the date first above written:

 

BAYERISCHE HYPO-UND VEREINSBANK AG

 

	
             
 	
            By:______________
Name:____________
Title:_____________ 
 	
            
 

 

 

	
             
 	
            By:______________
Name:____________
Title:_____________

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