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LAW OF THE REPUBLIC OF KAZAKHSTAN

of February 20, 2006 No. 126-III ZRK

About project financing and securitization

(as amended on 03-07-2019)

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

Chapter 1. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

18) uniformity of rights to claim - compliance of rights to claim to the general objective criterion determined by the prospectus of bond issue;

19) the customer - physical person or legal entity, the state on behalf of the Government or local executive body, and also state bodies authorized by them on the instructions of which the basic agreement is implemented;

20) authorized body - the state body performing state regulation, control and supervision of the financial market and the financial organizations;

21) affiliirovanny persons - the physical persons or legal entities (except for the state bodies performing control and supervising functions within the powers conferred to them) having opportunity directly and (or) indirectly to determine decisions and (or) to exert impact on accepted with each other (one of persons) decisions, including owing to the concluded bargain.

Article 2. Legislation of the Republic of Kazakhstan on project financing and securitization

1. The legislation of the Republic of Kazakhstan on project financing and securitization is based on the Constitution of the Republic of Kazakhstan and consists of the Civil code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.

2. The legislation of the Republic of Kazakhstan on the security market and on joint-stock companies extends to the relations connected with transactions of project financing and securitization and activities of special finance company if other is not established by this Law.

3. If the international treaty ratified by the Republic of Kazakhstan establishes other rules, than those which contain in this Law that are applied rules of the international treaty.

Chapter 2. Originator and special finance company

Article 3. Requirements to originator

1. Originator is legal entity, founders (the single founder) of which completely paid the size of the authorized capital or completely paid the shares of originator acquired by them according to the foundation agreement.

2. Originator has the right to participate in implementation of several transactions of securitization at the same time.

3. Originator shall have the audit report the last year prior to the conclusion of the transaction of securitization.

Article 4. Creation and activities of special finance company

1. The special finance company can be created by originator or the other person for participation in the transaction of project financing or securitization in form of business of joint-stock company or limited liability partnership.

The authorized capital of special finance company is created only by money.

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