AGREEMENT

BETWEEN THE GOVERNMENT OF HUNGARY AND THE GOVERNMENT OF THE KYRGYZ REPUBLIC ON THE HUNGARIAN - KYRGYZ DEVELOPMENT FUND

The Government of Hungary, and the Government of the Kyrgyz Republic, hereinafter referred to as the Parties, based on the mutual interest in deepening and expanding trade, investment and financial relations between economic entities of the States of the Parties, taking into account the necessity to mobilize additional financial resources to ensure sustainable socio-economic development of the Kyrgyz Republic, in accordance with article 3 of the Agreement between the Government of Hungary and the Government of the Kyrgyz Republic on economic cooperation, signed on July 11, 2017 in Mauerbach, and the Memorandum between the Government of Hungary Represented by the Ministry of Foreign Affairs and Trade and the Government of the Kyrgyz Republic represented by the Ministry of Finance of the Kyrgyz Republic on the Hungarian - Kyrgyz Development Fund, signed on September 29, 2020 in Budapest (hereinafter: the Memorandum), have agreed as follows:

Article 1. Establishment of the Hungarian-Kyrgyz Development Fund

The Parties establish the Hungarian-Kyrgyz Development Fund (hereinafter referred to as the Fund), which will operate in accordance with the provisions of the present agreement (hereinafter referred to as the Agreement) and its Articles of Incorporation (Appendix 1, hereinafter referred to as Articles of Incorporation) which is an integral part of the Agreement. The Fund's headquarter is located in Bishkek (the Kyrgyz Republic).

The Fund is managed by the Board of the Fund and the Management Board of the Fund.

Article 2. The goals and objectives of the Fund

The Fund was established in order to promote economic cooperation between Hungary and the Kyrgyz Republic, modernization and economic development of the Kyrgyz Republic, and the effective use of the opportunities provided by the Agreement between the Government of Hungary and the Government of the Kyrgyz Republic on economic cooperation, signed on July 11, 2017 in Mauerbach. The goals, functions, structure and functioning of the Fund, as well as the competence and authorities of its management bodies are determined by the Articles of Incorporation.

Article 3. Directions and principles of activity

The Fund finances self-supporting projects in priority sectors of the economy of the Kyrgyz Republic by providing loans, participating in capital and using other financial instruments in relations with economic entities registered and operating in the territory of the Kyrgyz Republic, including the aspects of the following areas that fall under the purview of the Parties:

The Fund cooperates with international organizations, corporations and development institutions in order to implement projects on the territory of the Kyrgyz Republic, as well as provides technical assistance for projects supported by the Fund.

Article 4. Capital

The authorized capital of the Fund is the equivalent of 16 000 000 (sixteen million) US dollars. The Hungarian Government expresses its intention to consider increasing the capital of the Fund to the 50 000 000 (fifty million) US dollars included in the Memorandum, taking into account the projects implemented by the Fund. The contribution to the authorized capital in US dollars is made in the following order.

The amount of US dollars 16,000,000 (sixteen million) shall be transferred by the Hungarian Party as a donor contribution to a special account in the National Bank of the Kyrgyz Republic (hereinafter: the Account of the Fund) until 30 September 2021, after this Agreement entered into force. The manner and conditions of use of the funds by the Fund transferred to the Account of the Fund shall be determined by the institutions authorized by the Parties.

Article 5. Legal capacity

Tire Fund, as a subject of international law, has international legal capacity.

At the territory of the States of the Parties, the Fund enjoys legal capacity under the laws and regulation of the States of the Parties, which is necessary for the implementation of its goals and objectives.

The Fund enjoys the rights of a legal entity and has the right to, inter alia:

The Fund submits to the Parties annual report on the implementation of activities aimed at achieving the goals and objectives of the Fund.

Article 6. Selected aspects of activity

The applicable legislation of each States of the Parties shall apply to the Fund in the part that does not contradict this Agreement.

The Fund's activities on the territory of the States of the Parties are determined by:

In case of their absence or in the part not regulated by the mentioned documents, the legislation of each of the States of the Parties on the territory of which such activity is carried out. The laws and regulations of the States of the Parties governing the procedures for the establishment, authorization, regulation and termination of the activities of organizations shall not apply to the Fund.

The income, assets and other assets of the Fund, as well as operations and transactions carried out in the territory of the Parties in accordance with the Articles of Incorporation, shall be exempt from all taxes, including income taxes, levies, duties and other compulsory payments to the budget, except incurred by the Fund's clients in transactions and cooperation with the Fund.

Exemption from taxes, including income tax, fees, duties and other compulsory payments to the budget, shall not apply to the staff of the Fund.

Liabilities or securities issued by the Fund, as well as dividends or interest, regardless of who owns them, shall not be subject to any tax in the States of the Parties.

Article 7. Amendments

This Agreement and the Articles of Incorporation, which form an integral part of this Agreement, may be amended jointly by the Parties. Amendments shall be the subject of a separate protocol and shall enter into force on the date of receipt by the Parties of the last written notification through diplomatic channels of the completion of the internal procedures necessary for their entry into force.

Article 8. Disputes and disagreements

Disagreements and disputes related to the application or interpretation of the provisions of this Agreement and the Articles of Incorporation, and arising from the activities of the Fund shall be settled by the Parties through consultations and negotiations.

Article 9. Final provisions

This Agreement and the Articles of Incorporation in its appendix 1 thereto shall enter into force on the 30th day after the date of receipt of the last written notification through diplomatic channels by the Parties of the completion of the internal procedures necessary for its entry into force.

In witness whereof, the undersigned, being duly authorized thereto by their respective Governments, have signed this Agreement.

Signed in Bishkek on 8th of April, 2021 in two original copies, in the English and Russian languages. All texts being equally authentic. In the event of a dispute over the interpretation of the Agreement and the Articles of Incorporation, the English text shall prevail.