Matthew Sapte UK and Middle East LLP Partner One Fleet Place London EC4M 7WS [email protected] D: +44 20 7246 7629 DX 242 M: +44 7795 618325 dentons.com

PRIVATE AND CONFIDENTIAL

International Swaps and Derivatives Association Inc 10 East 53rd Street, 9th Floor New York, New York 10022 United States of America

Our ref: MDS

24 April 2020

Dear Sir/Madam

International Financial Institutions – English law drawdown legal memorandum – Eurasian Development Bank (the "Memorandum")

1 Introduction

1.1 Basis of instructions

We have acted as English legal advisers to the International Swaps and Derivatives Association Inc ("ISDA") in connection with your letter of Request for Advice dated 21 August 2019 ("Request for Advice") on certain issues with respect to the enforceability of the termination, bilateral close-out netting and multibranch netting provisions of the ISDA Master Agreements (as defined below) and Transfer Annex (as defined below) when entered into with the Eurasian Development Bank ("EDB").

This memorandum supplements the memorandum provided by Mayer Brown entitled International Financial Institutions – English law base memorandum dated 28 August 2019 (the "English law base memorandum"). This Memorandum assumes familiarity with and incorporates the English law base memorandum.

1.2 Documents covered by this Memorandum

This Memorandum relates to the following template, unexecuted documents, which are expressed to be governed by English law (the "Relevant Documents"):

(a) 1992 ISDA Master Agreement (Multicurrency – Cross Border) and the ISDA 2002 Master Agreement (together the "ISDA Master Agreements"); and

(b) the 1995 ISDA Credit Support Annex (Bilateral Form – Transfer) (the "Transfer Annex").

1.3 Defined terms

1.3.1 Words defined in the Relevant Documents have the same meanings in this Memorandum unless expressly defined.

Larraín Rencoret ► Hamilton Harrison & Mathews ► Mardemootoo Balgobin ► HPRP ► Zain & Co. ► Delany Law ► Dinner Martin ► Maclay Murray & Spens ► Gallo Barrios Pickmann ► Muñoz ► Cardenas & Cardenas ► Lopez Velarde ► Rodyk ► Boekel ► OPF Partners

Dentons is a global legal practice providing client services worldwide through its member firms and affiliates. Dentons UK and Middle East LLP is a limited liability partnership registered in England and Wales under no. OC322045. It is authorised and regulated by the Regulation Authority and the of . A list of its members is open for inspection at its registered office: One Fleet Place, London EC4M 7WS. Any reference to a "partner" means a person who is a partner, member, consultant or employee with equivalent standing and qualifications in one of Dentons' affiliates. Please see dentons.com for Legal Notices. 67401029.6

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1.3.2 In this Memorandum:

Beneficiaries means ISDA for its benefit and the benefit of its members.

Close-out Netting Memorandum means Part III (Close-out Netting under the ISDA Master Agreement) and Part V (Enforceability in the absence of insolvency proceedings) of the Allen & Overy LLP Memorandum of law for ISDA of 12 March 2019 and headed “Validity and Enforceability under English Law of Close-out Netting under the 2002 and 1992 ISDA Master Agreements”.

Collateral Memorandum means Part IV.3 (Questions relating to the English Transfer Annex) of the Allen & Overy LLP Memorandum of law for ISDA of 30 December 2015 and headed "Validity and Enforceability under English Law of Collateral Arrangements under the ISDA Credit Support Documents".

Financial Collateral Directive means Directive 2002/47/EC of the European Parliament and Council of 6 June 2002 on financial collateral arrangements.

Kazakh legal opinion means the Kazakhstan legal opinion dated (or about) the date of this opinion issued by Dentons Kazakhstan LLP.

1.3.3 References to this Memorandum are references to the whole of this memorandum and any part of it.

1.4 Insolvency Proceedings

For the purposes of this Memorandum we have considered the types of insolvency proceedings referred to in Part III.1 (4) of the Close-out Netting Memorandum, being:

(a) winding up or liquidation under the Insolvency Act 1986, which may be compulsory or voluntary;

(b) administration under the Insolvency Act 1986;

(c) statutory arrangement with creditors, which may be a voluntary arrangement under the Insolvency Act 1986 or a scheme of arrangement under the Companies Act 2006; and

(d) administrative receivership.

Where references in this Memorandum are made to insolvency proceedings, we refer to the any of these proceedings.

1.5 Documents reviewed

For this Memorandum we have reviewed copies of the following:

(a) the Relevant Documents;

(b) an English translation of the Agreement establishing EDB (Astana, 12 January 2006) (the "Establishment Agreement"); and

(c) an English translation of the Charter of the EDB (in the form annexed to the Establishment Agreement) dated 12 January 2006 (the "Bank Charter", and together with the Establishment Agreement, the "Constitutional Documents").

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In our view these are the only documents we need to review to give this Memorandum.

1.6 Scope and purpose of the memorandum

1.6.1 This Memorandum is confined to matters of English law (as applied by the English courts) as at today's date. We express no opinion on the laws of any other jurisdiction.

1.6.2 We give this Memorandum on the basis of and subject to the assumptions set out in Schedule 1 (Assumptions and Qualifications).

1.6.3 No person may rely on this Memorandum except for the Beneficiaries. They may rely on it only:

(a) in connection with their use of the Relevant Documents with EDB; and

(b) on condition that:

(i) it is interpreted in accordance with, and our obligations and liabilities to the Beneficiaries in connection with it are governed by, English law;

(ii) any dispute arising from it is subject to the exclusive jurisdiction of the English courts.

1.6.4 No person may, without our written consent:

(a) assign, or hold the benefit of this Memorandum on trust for, any other person; or

(b) (subject to paragraph 1.6.5) disclose this Memorandum, or any copy of it, to any other person.

1.6.5 Subject to paragraph 1.6.6, a Beneficiary may disclose this Memorandum to:

(a) any person to whom disclosure is required by law, court order or the mandatory rules or regulations of any competent supervisory or regulatory body; or

(b) the officers, employees, auditors and professional advisers of any Beneficiary.

1.6.6 The following conditions apply to any disclosure under paragraph 1.6.5:

(a) the disclosure is made only to inform the recipient of the terms of the Memorandum, but not so the recipient may rely on it in any way; and

(b) we accept no responsibility or legal liability to the recipient.

2 Background - Eurasian Development Bank

2.1 The EDB was established to promote economic growth in its member states. The EDB was established pursuant to its Constitutional Documents on 12 January 2006 by the Presidents of Russia and Kazakhstan. Subsequent to the establishment of the EDB in 2006, the Republics of Armenia and Tajikistan became full members of the EDB in 2009, the Republic of Belarus became a full member in 2010 and the Kyrgyz Republic became a full member in 2011. Therefore currently the full members of the EDB are Russia, Kazakhstan, Armenia, Tajikistan, Belarus and Kyrgyzstan.

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2.2 The Bank Charter sets out the constitution of EDB. Article 3 of the Bank Charter contains the articles relating to the status and the seat of EDB. In particular:

2.2.1 Article 3(1) provides that EDB is an international organisation and subject to international law having legal capacity, in particular to enter into international treaties in accordance with the scope of its powers pursuant to its Constitutional Documents;

2.2.2 Article 3(2) provides that the EDB may exercise the rights of a legal entity in the member states, in particular:

(a) the rights to enter into any transactions not contradicting the Bank Charter; and

(b) to act in court and arbitral proceedings. In any proceedings taken in any state that is a member of EDB, EDB is granted the same procedural rights that are granted to legal entities in that state;

2.2.3 Article 3(4) provides that the seat of EDB will be Almaty in the Republic of Kazakhstan;

2.2.4 Article 3(6) provides that EDB may also establish branches, representative offices and/or subsidiary companies pursuant to resolution of its Council and subject to approval by its member states. Currently the EDB has a branch in St Petersburg and representative offices in Nur-Sultan, Bishkek, Dushanbe, Minsk, Moscow and Yerevan.

2.3 The EDB also manages the Eurasian Fund for Stabilization and Development ("EFSD"). The EFSD was established in 2009 by the governments of Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia and Tajikistan.

3 Questions considered

Pursuant to the Request for Advice, we have been asked to provide opinions on the following questions:

(a) What is the status of EDB under English law and does it have separate legal personality?

(b) Would the English courts recognise EDB as having legal capacity/legal power to enter into and perform its obligations under the Relevant Documents and one or more Transactions under the Relevant Documents?

(c) In order to assist counterparties in conducting their as to signatory authority on behalf of EDB, please identify the organ(s) of EDB that, based on publically available constitutive documents of EDB, have authority to conduct EDB's business.

(d) Confirm whether the analysis in paragraphs 7(c) to (h) of the English law base memorandum on the validity and enforceability of the Relevant Documents apply equally to EDB?

4 Analysis and conclusions

4.1 What is the status of EDB under English law and does it have separate legal personality?

4.1.1 For the purposes of the English law base memorandum and this Memorandum, the "legal personality" of an IFI refers to its legal standing, in principle under English law to contract, acquire and dispose of property, and sue and be sued before the English court, in its own name.

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4.1.2 We are not aware of any English legislation which confers legal personality on EBD. Therefore EBD should be categorised as a Non-UK Legislation IFI in the same manner as that set out in paragraph 7(a)(ii) of the English law base memorandum. Accordingly EDB will derive legal personality as a matter of English law from the operation of comity if EDB had legal personality conferred on it under the laws of a recognised foreign state (if that state is either a member of EDB, or that state where EDB has its seat). This matter is addressed from a Kazakhstan law perspective in paragraph 2.3 of the Kazakh legal opinion.

4.2 Would the English courts recognise EDB as having legal capacity to enter into and perform its obligations under the Relevant Documents?

4.2.1 Paragraph 7(b) of the English law base memorandum considers whether English courts are competent to decide whether a Non-UK Legislation IFI has the legal capacity to enter into and perform its obligations under the Relevant Documents and one or more Transactions under the Relevant Documents.

4.2.2 Given that EDB is a Non-UK Legislation IFI, our view is that, for the reasons set out in paragraph 7(b) of the English law base memorandum, English courts are not competent to decide the issue of whether EDB has such legal capacity.

4.3 In order to assist counterparties in conducting their diligence as to signatory authority on behalf of EDB, please identify the organ(s) of EDB that, based on publically available constitutive documents of EDB, have authority to conduct EDB's business.

4.3.1 We refer you to paragraph 2.4 of the Kazakh legal opinion.

4.4 Please advise on the validity and enforceability under English law of an English law governed ISDA Master Agreement, including the early termination and close-out netting provisions against EDB in the absence of insolvency proceedings in England in relation to EDB.

4.4.1 The conclusions reached in paragraph 7(c) of the English law base memorandum would apply (mutatis mutandis and in all material respects) to EDB in the absence of insolvency proceedings in England in relation to EDB.

4.5 Please advise on the validity and enforceability under English law of a Transfer Annex (in the case of a Transfer Annex forming part of a 2002 Agreement, subject to amendments set out in Annex 15 to the 2002 ISDA Master Agreement Protocol), against EDB in the absence of insolvency proceedings in England in relation to EDB.

4.5.1 The conclusions reached in paragraph 7(d) of the English law base memorandum would apply (mutatis mutandis and in all material respects) to EDB in the absence of insolvency proceedings in England in relation to EDB.

4.5.2 However when considering paragraph 7(d) of the English law base memorandum, note that EDB is not expressly referred to in Article 1.2(b) of the Financial Collateral Directive and therefore does not fall within one of the categories (other than that of non-natural person) listed in Article 1.2 of the Financial Collateral Directive.

4.6 Could EDB be subject to insolvency proceedings in England?

4.6.1 The conclusions reached in paragraph 7(e) of the English law base memorandum would apply (mutatis mutandis and in all material respects) to EDB.

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4.6.2 In particular, note that:

(a) Article 29 of the Bank Charter provides for a process for temporary suspension of EDB's operations; and

(b) Article 30 of the Bank Charter provides a process for the termination of operations and winding up of EDB. In particular Article 30(4) provides an order of distribution of the assets of EDB in the case of Termination of Operations and Winding-Up. It is not clear whether with the temporary suspension of operations contemplated by Article 29 or a permanent termination of operations or winding up contemplated by Article 30 would constitute an Event of Default under Section 5(a) of the ISDA Master Agreement unless such agreement had been specifically amended to make reference to this Article.

4.7 If EDB were subject to insolvency proceedings in England would the early termination and close-out netting provisions of the ISDA Master Agreement and Paragraph 6 of the Transfer Annex be enforceable against it?

4.7.1 The conclusions reached in paragraph 7(f) of the English law base memorandum would apply (mutatis mutandis and in all material respects) to EDB if it was the subject of insolvency proceedings in England.

4.8 If EDB were subject to insolvency proceedings under the insolvency law of a foreign state, would the courts recognise the foreign proceedings and/or enforce a judgement of a foreign insolvency proceeding in respect of it?

4.8.1 The conclusions reached in paragraph 7(g) of the English law base memorandum would apply (mutatis mutandis and in all material respects) to EDB if it was subject to insolvency proceedings under the law of a foreign state.

4.9 Assuming EDB is not subject to insolvency proceedings in England, would the early termination and close-out netting provisions of the ISDA Master Agreement and Paragraph 6 of the related Transfer Annex be valid and enforceable against EDB as a matter of English law, even if EDB is able to claim immunity because of its status as a public international law entity?

4.9.1 A general consideration of immunities is set out in paragraph 7(h) of the English law base memorandum. For the purposes of this Memorandum, we will only focus on those aspects of immunity that are most directly relevant to the enforceability of the early termination and close-out netting provisions of the ISDA Master Agreement and Paragraph 6 of the Transfer Annex against an IFI. That is, immunity from execution of a judgment against its property and assets and immunity from jurisdiction (that is, from all forms of legal process) more generally.

4.9.2 As set out in paragraph 7(h) of the English law base memorandum, immunities may be conferred upon IFIs by specific English legislation. However we are not aware of any such legislation that would confer any such immunity on EDB.

4.9.3 Article 31 of the Bank Charter sets out the immunities and privileges which apply to EDB, and Article 33 of the Bank Charter sets out the basis on which immunities and privileges may be waived. In particular:

(a) Article 31(1) provides that EDB shall enjoy immunity from every legal process, except in cases not arising out of or in connection with the exercise of its powers; and that actions

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may be brought against EDB only in a court of competent jurisdiction, in a state in which EDB has its principal or branch office or where it has appointed an agent to accept service of process; and

(b) Article 33 provides that the Council of EDB may waive its immunities and privileges where such waiver would, in its opinion, be in the best interests of EDB.

This matter is addressed from a Kazakhstan law perspective in more detail in paragraph 2.5 of the Kazakh legal opinion.

4.9.4 However the operation of the early termination and close-out netting provisions in order to determine a net close-out amount under Section 6(e) of the ISDA Master Agreement and Paragraph 6 of the Transfer Annex following an Event of Default in relation to EDB would not require the involvement of the English court. Therefore, even if EDB has immunity from execution and jurisdiction, this should not interfere with the operation of the early termination and close-out netting provisions of the ISDA Master Agreement and Paragraph 6 of the Transfer Annex.

4.9.5 Accordingly, if the operation of the early termination and close-out netting provisions in the ISDA Master Agreement and Paragraph 6 of the Transfer Annex was challenged in the English courts, we expect that any claim to immunity would not prevent the operation of those provisions from being upheld.

Yours faithfully

Dentons UK and Middle East LLP

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Schedule 1– Assumptions and Qualifications

The opinions given in this Memorandum are subject to the assumptions, qualifications and discussions set out in the Close-out Netting Memorandum, the Collateral Memorandum and the English law base memorandum, and to the assumptions and qualifications set out below. We have made no independent investigation of the accuracy of any of these assumptions.

1 The description of EDB in paragraph 2 of this Memorandum is accurate and not misleading in any material respect.

2 EDB has been duly established and is validly existing under the Constitutional Documents.

3 All copy documents supplied to us (including the Constitutional Documents in the form made available on EDB's website as of 14 April 2020) are true copies of complete, genuine and up to date original documents, and remain in full force and effect. In addition, all translations of such documents are accurate, and there are no inconsistencies between the original versions and their translations.

4 We have only examined and relied on the documents listed in paragraph 1.5 of this Memorandum. We have made no further enquiries. There is no matter or fact and no additional document which is material and which was not revealed to us by our examination of the documents referred to in paragraph 1.5 of this Memorandum.

5 There are no official records of the negotiation of the Constitutional Documents which have any material effect on the matters in this Memorandum.

6 There are no decisions of foreign courts or tribunals relating to the Constitutional Documents which are inconsistent with the matters referred to in this Memorandum.

7 The counterparty to the Relevant Documents and each Transaction entered into thereunder:

(a) is duly organised and existing, has the power to enter into, and to execute, deliver (where applicable) and perform its obligations under such documents and transactions and has taken all necessary action to authorise the execution and delivery of such documents and transactions; and

(b) is not a holder of shares in EDB.

8 The purposes and functions of EDB are those referred to in the Constitutional Documents and EDB operates in a manner in which is within their parameters and consistent with those purposes and functions. The entry into and performance of EDB's obligations under the Relevant Documents and the Transactions under the Relevant Documents is consistent with and within the parameters of and duly authorised in accordance with: the Constitutional Documents and, where applicable internal approvals and EDB's purposes and functions and any principles of public international law.

9 EDB is not:

(a) operating as a department of the government of any of its member states, and each Transaction entered into under the Relevant Documents is a commercial transaction for the purposes of Section 3(1) of the State Immunity Act 1978; and

(b) a public authority, a financial institution subject to prudential supervision, or a central counterparty, settlement agent or clearing house (or similar institution) and does not act in a

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trust or representative capacity in each case as referred to in Article 1.2 of the Financial Collateral Directive.

10 Sanctions in effect in the United Kingdom may prohibit persons bound by them from having:

(a) certain types of dealing with specified companies and individuals; or

(b) certain dealings with specified countries.

11 If party has to perform or does perform any of its obligations under a Relevant Document in a jurisdiction other than England and Wales, the English courts:

(a) may give effect to any overriding mandatory provisions of the law of the place of performance of those obligations, insofar as those provisions render performance unlawful; and

(b) shall have regard to the law of the place of performance of those obligations in relation to the manner of performance and the steps to be taken in the event of defective performance.

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