Exhibit (5)(A)
FORM OF FISCAL AGENCY AGREEMENT
REPUBLIC OF HUNGARY
FISCAL AGENCY AGREEMENT (the "Agreement") dated as of December 15,
2004, between the Republic of Hungary (the "Republic"), and Citibank, N.A.,
London (the "Fiscal Agent", "Registrar", or "Agent") .
1. The Debt Securities. The Republic is issuing and selling, pursuant
to an Underwriting Agreement described in Schedule I hereto (the "Underwriting
Agreement"), the debt securities as described in Schedule I and substantially in
the form of Exhibit I attached hereto (each a "Debt Security", and collectively,
the "Debt Securities"). The Debt Securities may be issued in the form and in the
denominations specified in Schedule I hereto and integral multiples thereof.
The Debt Securities may have such letters, numbers or other marks of
identification or endorsements not referred to herein placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or with
the rules of any securities exchange or governmental agency or as may,
consistently herewith, be determined by the authorized signatory of the Republic
specified in Schedule I hereto (the "Republic Authorized Signatory"), as
conclusively evidenced by his execution of the Debt Securities.
The Debt Securities will be issued in the form of one or more fully
registered global debt securities (the "Global Debt Securities") which will be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York (the "Depository" or "DTC") and registered in the name of Cede & Co., the
Depository's nominee. Beneficial interests in the Global Debt Securities will be
represented through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants in the
Depository ("participants"). Investors may elect to hold interests in the Global
Debt Securities through either the Depository (in the United States) or
Euroclear Bank S.A./N.V., Brussels Office, as operator of the Euroclear System
("Euroclear") or Clearstream Banking, societe anonyme ("Clearstream,
Luxembourg") (in Europe), if they are participants of such systems, or
indirectly through organizations which are participants in such systems.
Euroclear and Clearstream, Luxembourg will hold interests on behalf of their
participants through customers' securities accounts in Euroclear's and
Clearstream, Luxembourg's names on the books of their respective depositaries,
which in turn will hold such interests in customers' securities accounts in such
depositaries' names on the books of the Depository. Except as set forth in
Condition 8 of the Debt Securities, the Global Debt Securities may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.
So long as the Depository or its nominee is the registered owner of
the Global Debt Securities, the Depository or such nominee, as the case may be,
will be considered the sole owner or holder or the Debt Securities represented
by the Global Debt Securities for all purposes under this Agreement. Except as
provided in Condition 8 of the Debt Securities, owners of
beneficial interests in the Global Debt Securities will not be entitled to have
Debt Securities represented by the Global Debt Securities registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the owners or holders
thereof under this Agreement.
Interest will be payable quarterly on each "Interest Payment Date", as
defined in the Debt Securities, to holders of record on each "Record Date", as
defined in the Debt Securities. Notwithstanding anything to the contrary
provided herein, any payment of principal or interest or additional amounts, if
any, falling due on a day which is not a business day for the Fiscal Agent will
be payable on the next succeeding business day and no interest shall accrue for
such intervening period, provided however that if that next succeeding business
day falls in the next calendar month, such payment of principal or interest will
be payable on the first preceding business day. Except as otherwise provided
below, interest will be paid by check mailed to each holder of record on the
relevant Record Date at the address of such person as shown on the Debt Security
register. Any record holder of Debt Securities, the aggregate principal amount
of which equals or exceeds U.S. $1,000,000, may, by written notice to the Fiscal
Agent no later than the Record Date therefor, elect to receive, and the Fiscal
Agent shall pay, the interest payment in respect of such Debt Securities by wire
transfer in same-day funds to a bank account maintained by such holder in the
United States.
2. Appointment as Agent. The Republic hereby appoints the Fiscal Agent
as its Paying Agent and Registrar for the Debt Securities to perform such duties
as are hereinafter set forth.
3. Duties as Paying Agent. The Republic hereby authorizes and directs
the Fiscal Agent, and the Fiscal Agent hereby agrees, to calculate interest on
the Global Debt Securities in the manner provided in the Global Debt Securities,
to make payments of the principal of and interest, and additional amounts, if
any, on the Global Debt Securities in the manner provided in the Global Debt
Securities and in accordance with the regular procedures established by the
Depository for the Global Debt Securities specified in Schedule I hereto. If the
Debt Securities are issued in definitive form, the Republic hereby authorizes
and directs the Fiscal Agent, and the Fiscal Agent hereby agrees, to make
payments on behalf of the Republic in the City and State of New York or London
of principal of and interest and additional amounts, if any, on the Debt
Securities in the manner provided in the Debt Securities. The Republic will
ensure that, no later than 10:00 a.m. (New York time) on the second Business Day
prior to each date on which any payment in respect of the Debt Securities
becomes payable by the Republic under this Section, the Fiscal Agent shall
receive from the bank paying on behalf of the Republic an irrevocable payment
confirmation that such payment will be made to the Fiscal Agent. The Republic
shall deposit with the Fiscal Agent at its bank in The City of New York at 10:00
a.m. New York time on the payment date in U.S. dollar denominated Federal funds
sums sufficient for such payments of principal of and interest and additional
amounts, if any, on the Debt Securities. However, unless and until the full
amount of any such payment has been made to the Fiscal Agent or unless and until
the Fiscal Agent is satisfied that such payment will be made, neither it nor the
Paying Agent shall be bound to make payments in respect of the Debt Securities
as aforesaid. If the Agent makes any such payment on behalf of the Republic
under this Section 3, the Republic shall be liable on demand by the Agent to pay
to the Agent the amount so paid out, together with interest thereon at such a
rate as the Agent may certify as the aggregate of 1% per annum and the cost of
funding any such payment made by it (as reasonably determined by the Agent).
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The Fiscal Agent shall not be liable for any interest on any such
monies held by it under this Agreement and any money held by it need not be
segregated except as required by law.
In the event that any holder of Debt Securities shall deliver to the
Republic written notice of a default and/or an event of acceleration, as
provided in the Debt Securities, the Republic shall, by telefax, relay such
notice to the Fiscal Agent. Such notice shall be confirmed in writing by the
Republic, as promptly as possible, to the Fiscal Agent. In the event that any
holder of Debt Securities shall deliver to the Fiscal Agent notice of a default
and/or an event of acceleration, the Fiscal Agent shall relay such notice to the
Republic as promptly as possible by telefax and post pursuant to Section 10
hereof.
If the Debt Securities are issued in definitive form the Republic
shall appoint a paying agent in the City and State of New York.
The Agent shall, at the request of any holder of the Debt Securities,
issue Voting Certificates and Block Voting Instructions in a form and manner
which comply with the provisions of Schedule II (Provisions for Meetings of the
Holders of the Debt Securities) hereto (except that it shall not be required to
issue the same less than 48 hours before the time fixed for any Meeting provided
for therein). The Agent shall keep a full record of Voting Certificates and
Block Voting Instructions issued by it and shall give to the Republic, not less
than 24 hours before the time appointed for any Meeting, full particulars of all
Voting Certificates and Block Voting Instructions issued by it in respect of
such Meeting.
The Fiscal Agent shall promptly forward to the Republic a copy of any
notice or communication addressed to the Republic by any holder of the Debt
Securities which is received by the Fiscal Agent.
The Fiscal Agent shall, upon and in accordance with instructions of
the Republic received at least 10 days before the proposed publication date,
arrange for the publication at the expense of the Republic of any notice which
is to be given to the holders of the Debt Securities and shall supply a copy
thereof to each Euroclear, Clearstream, Luxembourg and any stock exchange on
which the Debt Securities may be listed.
With respect to the Debt Securities in definitive form, upon request
by the Republic, as soon as practicable (and in any event within three months)
after each interest payment date, the Fiscal Agent shall notify the Republic (on
the basis of the information available to it) of the number of any Debt
Securities in definitive form against surrender of which payment has been made
and of the number of any Debt Securities in definitive form which have not yet
been surrendered for payment.
The Agent shall also perform any other duties of the Paying Agent
specified in the Debt Securities.
The Debt Securities shall not be amended to change or increase the
duties of the Agent without the Fiscal Agent's prior written consent, which
consent may not be unreasonably withheld.
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The Fiscal Agent shall comply with all United States backup
withholding tax and information reporting requirements under the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder
applicable to payments under, or with respect to, the Debt Securities (including
the collection of Internal Revenue Service Forms W-8 or W-9 and the filing of
Forms 1099 with respect to such payments).
4. Duties as Registrar and Fiscal Agent. The Fiscal Agent, as
Registrar, shall keep at its office in London a register of the names and
addresses of the holders of Debt Securities and nominal value of the Debt
Securities held by them and in which transfers of Debt Securities shall be
registered.
The Debt Securities shall be executed on behalf of the Republic
manually or by the facsimile signature of the Republic Authorized Signatory and
shall bear the facsimile of the written, printed or stamped name of the Republic
thereon imprinted. The Fiscal Agent may rely, in good faith, on Debt Securities
bearing the signature of an individual who was at any time the Republic
Authorized Signatory which signature shall bind the Republic, notwithstanding
that such individual shall have ceased to hold such office prior to the
authentication and delivery of such Debt Securities. The Republic will deliver
to the Fiscal Agent a certificate of authorization for the Republic Authorized
Signatory.
The Fiscal Agent shall authenticate and deliver on original issuance
the aggregate principal amount of the Debt Securities to or upon the order of
the Republic Authorized Signatory, registered in the name of Cede & Co. and in
the denominations as requested by the Underwriters named in the Underwriting
Agreement (the "Underwriters"). The Debt Securities shall be dated the date of
their authentication by the Fiscal Agent. Thereafter, the Fiscal Agent is
authorized from time to time to authenticate and deliver Debt Securities upon
transfers or exchanges thereof or in exchange for mutilated Debt Securities or
in lieu of destroyed, stolen or lost Debt Securities.
Transfers of the Debt Securities shall be effected in compliance with
Condition 8 of the Debt Securities.
In the event that a Global Debt Security is exchanged for certificated
Securities in definitive registered form, pursuant to Condition 8 of the Debt
Security, such Debt Securities may be exchanged or transferred for one another
only in accordance with such procedures as may be, from time to time, adopted by
the Republic so as to comply with the Securities Act and the rules and
regulations promulgated thereunder.
If the Debt securities are issued in definitive form the Republic
shall appoint a transfer agent in the City and State of New York.
The Republic may from time to time deliver to the Fiscal Agent Debt
Securities in definitive form for cancellation, whereupon the Fiscal Agent shall
cancel such Debt Securities in definitive form. In addition, the Republic may
from time to time procure the delivery to the Fiscal Agent of a Global Debt
Security with instructions to cancel a specified aggregate principal amount of
Debt Securities represented by it (which instructions shall be accompanied by
confirmation from Euroclear or Clearstream, Luxembourg that Debt Securities
having such
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aggregate principal amount may be cancelled), whereupon the Fiscal
Agent shall procure that there is noted on the schedule to such Global Debt
Security the aggregate principal amount of Debt Securities so cancelled and the
remaining principal amount of such Global Debt Security (which shall be the
previous principal amount thereof less the aggregate principal amount of the
Debt Securities so cancelled) and shall procure the signature of such notation
on its behalf.
The Fiscal Agent shall also perform any other duties of Registrar
specified in the Debt Securities.
The Debt Securities shall not be amended to change or increase the
duties of the Fiscal Agent as Registrar without such Agent's prior written
consent. Such consent shall not be unreasonably withheld.
5. Terms of Acceptance of Appointments. The Fiscal Agent hereby
accepts its appointments as Paying Agent and Registrar under this Agreement upon
the further terms and conditions hereinafter set forth:
(a) the Agent undertakes to perform only such duties as are
specifically set forth in this Agreement or are incorporated into this
Agreement by reference to the Debt Securities;
(b) no provisions of this Agreement shall relieve the Agent from
liability for its own negligent action or willful default, or its own
willful misconduct except that:
(1) the duties of the Agent shall be limited as provided in
paragraph (a) of this Section; and
(2) in the absence of bad faith on the part of the Agent, the
Agent may conclusively rely upon and be protected in acting or
refraining from acting upon certificates or opinions conforming to the
requirements of this Agreement as to the truth of the statements and
the correctness of opinions expressed therein;
(c) the Agent may rely in good faith and shall be protected in acting
on any instruction, resolution, certificate, opinion, notice, request,
order, appraisal, report, information, Debt Security or other paper or
document reasonably believed by it to be genuine and to have been signed by
the authorized party or parties;
(d) the Agent may consult with counsel or other professional advisers
selected by it (who may be counsel for the Republic) and an opinion of such
counsel or adviser shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such opinion;
(e) the Agent, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities with the same rights it would have if
it was not Paying Agent or Registrar and may engage or be interested in any
financial or other transaction with the Republic, and may act on, or as
depository, trustee or agent for, any committee or body of holders of Debt
Securities or other obligations of the Republic, as freely as if it was not
an Agent or such aforementioned person;
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(f) in acting under this Agreement, the Agent is acting solely as
agent of the Republic, does not assume any obligation or relationship of
agency or trust for or with any of the owners or holders of the Debt
Securities and does not assume any responsibility for the correctness of
the recitals in the Debt Securities, except that (i) all funds held by the
Agent as Paying Agent for payment of principal of or interest on the Debt
Securities shall be held in trust for the benefit of the holders of Debt
Securities entitled thereto subject to the provisions of the following
paragraph (g) and (ii) the provisions of Section 6 hereof are for the
benefit of the holders of Debt Securities;
(g) any moneys deposited with the Fiscal Agent, as Paying Agent, for
the payment of the principal of and interest and additional amounts, if
any, on any Debt Security remaining unclaimed for two years after such
principal of or interest on or additional amounts on such Debt Security
shall have become due and payable shall be repaid, and notice of the
existence of such funds shall be given to the Republic by the Fiscal Agent,
and the holder of such Debt Security shall thereafter, as an unsecured
general creditor, look only to the Republic for any payment to which such
holder may be entitled;
(h) all Debt Securities (i) surrendered to the Fiscal Agent, as
Registrar, for exchange or transfer or (ii) paid by the Fiscal Agent, as
Paying Agent, shall be canceled by the Fiscal Agent and kept by the Fiscal
Agent in accordance with its customary procedures, and, upon request of the
Republic, evidence of such cancellation (and any subsequent destruction)
shall be promptly forwarded by the Fiscal Agent to the Republic, and the
registered owner thereof shall be stricken from the register of Debt
Securities held by the Fiscal Agent;
(i) notwithstanding any other provision of this Agreement to the
contrary, under no circumstances shall the Agent be liable to the Republic
or any other party to this Agreement for any consequential loss (being loss
of business, goodwill or opportunity or profit) even if advised of the
possibility of such loss or damage.
(j) whenever in the administration of this Agreement, the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may rely in good faith upon a
certificate signed by a Republic Authorized Signatory and delivered to the
Agent; and
(k) the duties and obligations of the Agent shall be determined solely
by the express provisions of this Agreement, and the Agent shall be liable
only for the performance of such duties and obligations as are specifically
set forth in this Agreement, and no implied covenants or obligations shall
be read into this Agreement with respect to the Agent.
6. Resignation and Removal; Appointment of Successor. The Agent may
resign at any time by giving written notice to the Republic of its resignation,
specifying the date on which its resignation shall become effective (which shall
not be less than 90 days after the date on which notice is received, unless the
Republic shall agree in writing to a shorter period);
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and the Republic may remove the Agent at any time by giving at least 30 days'
notice pursuant to Section 10 hereof to the Fiscal Agent, specifying the date on
which such removal shall become effective, but in each case only in accordance
with the following provisions:
(a) any resignation or removal of the Agent shall be effective only
upon appointment by the Republic of a qualified successor paying agent and
registrar and the latter's acceptance thereof;
(b) if the Agent shall resign, be removed or become incapable of
acting as Paying Agent or Registrar for any cause, the Republic shall
promptly appoint a successor paying agent or registrar;
(c) any successor paying agent and registrar appointed by the Republic
shall be a reputable financial institution legally qualified to act as such
successor and having an established place of business in London, and the
City and State of New York;
(d) every successor paying agent or registrar appointed hereunder
shall execute and deliver to the Republic and to the retiring paying agent
or registrar an instrument accepting such appointment, which shall set
forth its agreement to be bound by the terms hereof, and thereupon the
resignation or removal of the retiring paying agent or registrar shall
become effective and the successor, without further act or deed, shall
become vested with all the rights, powers, trusts and duties of the
retiring paying agent or registrar. Such retiring paying agent or registrar
shall, at the direction of the Republic and upon payment of its
compensation and expenses then unpaid, promptly deliver to its successor
all sums held hereunder together with all records, unissued Debt Security
certificates and other documents necessary or appropriate in connection
with the performance of the duties of the successor paying agent or
registrar under this Agreement;
(e) The Republic shall give, or cause to be given, notice of each
resignation and each removal of a paying agent or registrar and each
appointment of a successor paying agent or registrar by publishing such
notice in English in London in the Financial Times and in New York in The
Wall Street Journal (U.S. Edition). If at any time publication in any such
newspaper is not practicable, notices will be valid if published in an
English language newspaper with general circulation in the respective
market regions as the Republic shall determine. Any such notice shall be
deemed to have been given on the date of such publication or, if published
more than once on different dates, on the first date on which publication
is made; and
(f) The Republic agrees with the Fiscal Agent that, if on the day
falling 30 days before the expiry of any notice given under Section 6, the
Republic has not appointed a replacement Agent, then the Agent shall be
entitled, on behalf of the Republic, to appoint in its place a reputable
financial institution and the Republic shall not unreasonably object to
such appointment, and if the Republic objects to such appointment, the
Fiscal Agent may petition a court of competent jurisdiction to make such
appointment.
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7. Merger, Consolidation and Sale of Fiscal Agent. In the event of any
merger or consolidation of the Fiscal Agent into another corporation or the sale
of all or substantially all the Fiscal Agent's corporate trust business, the
corporation resulting from such merger or consolidation, or the transferee in
the case of any such sale, shall be the paying agent and registrar hereunder
without further act or deed; provided, however, that such corporation shall be
otherwise qualified and eligible under this Agreement.
8. Compensation and Indemnification. The Republic agrees (1) to pay
the Fiscal Agent reasonable compensation for its services as Paying Agent and
Registrar under this Agreement, and to reimburse it upon its request in writing
for all reasonable costs and expenses incurred by the Agent in accordance with
any provision of this Agreement, such compensation and the further terms of such
reimbursement to be mutually agreed upon from time to time by separate written
agreements, and (2) to indemnify the Agent for, and to hold it harmless against
any loss, liability or expense incurred by it without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or acting pursuant to this Agreement or the Debt Securities,
including the reasonable costs and expenses (including counsel fees) of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder or under the Debt
Securities. The obligations of the Republic under this Section 8 shall survive
payment of all of the Debt Securities or the resignation or removal of the Agent
or the termination or expiry of this Agreement. None of the provisions contained
in this Agreement shall require the Agent to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its
duties.
9. Appointment of Agent for Service. The Republic hereby appoints the
Embassy of the Republic of Hungary, Office of the Trade Commissioner, 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent (the
"Authorized Agent") upon which process may be served in any action arising out
of or based on this Agreement or the Debt Securities which may be instituted in
any State or Federal court in New York, New York by the holder of a Debt
Security of which the Fiscal Agent is acting as fiscal agent hereunder, and the
Republic expressly accepts the jurisdiction of any such court in respect of any
such action. Such appointment shall be irrevocable so long as any Debt
Securities remain outstanding unless and until a successor agent shall have been
appointed as the Republic's Authorized Agent and such successor Authorized Agent
shall have accepted such appointment. The Republic will take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment or appointments in full force and effect
as aforesaid. Service of process upon the Authorized Agent at the address
indicated in this Section 9, or at such other address in the Borough of
Manhattan, The City of New York, as may be the address of the Authorized Agent
at the time of such service, and written notice of such service to the Republic
(mailed or delivered to the Republic at the address set forth in Section 10
hereof) shall be deemed, in every respect, effective service of process upon the
Republic. Upon receipt of such service of process, the Authorized Agent shall
advise the Republic promptly in writing by telefax of its receipt thereof, but
the failure to so advise shall have no effect on the validity or timeliness of
any such service. Notwithstanding the foregoing, any action against the Republic
arising out of or based on the Debt Securities may also be instituted by the
holder of a Debt Security in any competent court in the Republic of Hungary. The
Republic hereby waives irrevocably, to the fullest extent permitted by law, any
immunity from jurisdiction to which it
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might otherwise be entitled in any action arising out of or based on this
Agreement or the Debt Securities which may be instituted as provided in this
Section in any State or Federal court in New York, New York, or in any competent
court in the Republic of Hungary. Such waiver constitutes only a limited and
specific waiver for the purposes of this Agreement and the Debt Securities and
under no circumstances shall it be interpreted as a general waiver by the
Republic or a waiver with respect to proceedings not arising out of or based on
this Agreement or the Debt Securities. Neither such appointment nor such waiver
shall be interpreted to include the waiver of any immunity with respect to: (i)
actions brought against the Republic under U.S. State or Federal securities
laws; (ii) present or future "premises of the mission" as defined in the Vienna
Convention on Diplomatic Relations signed in 1961; (iii) "Consular premises" as
defined in the Vienna Convention on Consular Relations signed in 1963; (iv) any
other property or assets used solely or mainly for official state purposes in
the Republic or elsewhere; or (v) military property or military assets or
property or assets of the Republic related thereto.
10. Notices. Any notice given pursuant to any of the provisions of
this Agreement shall be delivered:
(a) to the Republic at:
Government Debt Management Agency Ltd.
Csalogany u. 9-11
X-0000 Xxxxxxxx
Xxxxxxx
Attention: Xx. Xxxxxx Xxxxx
Telephone: x00-0-000-0000
Telecopier: x00-0-000-0000
(b) to the Fiscal Agent at the address specified in Schedule I hereto,
or at such other address as may be specified in writing to the other party.
11. Governing Law and Counterparts. This Agreement shall be construed
in accordance with the laws of the State of New York, without regard to the
conflicts of law principles of such State (other than Section 5-1401 of the
General Obligation Law of the State of New York), except with respect to its
authorization and execution by the Republic, which shall be governed by the laws
of the Republic of Hungary. This Agreement may be executed in any number of
counterparts each of which will be considered to be an original.
12. Amendments. This Agreement may be amended by written agreement of
the parties hereto, without the consent of the registered holders of the Debt
Securities, for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or in regard to matters
or questions arising under this Agreement as such parties may deem necessary or
desirable and that shall not be inconsistent with the Debt Securities and shall
not, as solely determined by the Republic, adversely affect the interests of the
holders of Debt Securities.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date specified in Schedule I hereto.
On behalf of the Republic of Hungary
By: ____________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer of the Government Debt
Management Agency Ltd. of the Republic of
Hungary as attorney for the Republic of
Hungary represented by its Minister of Finance
Citibank, N.A., London
By:__________________________
Name:
Title:
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SCHEDULE I
================================================================================
Date of Agreement: December 15, 2004
Name of Fiscal Agent: Citibank, N.A.
Address for Notices: 0 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Bond Agency
Fax: (x00) 00 0000 0000
Tel: (x00) 00 0000 0000
Republic Authorized Signatory: Xx. Xxxxxx Xxxxxxx
Description of Debt
Securities:
Aggregate principal amount: U.S. $100,000,000
Form of Debt Securities: Fully registered global bonds
Depository: Depository Trust Company,
New York, New York
Denominations: U.S. $1,000 and integral
multiples thereof
Interest rate: Floating
Currency of payment of interest: U.S. Dollars
Maturity: December 15, 2006
Description of Underwriting Agreement:
Date of Underwriting Agreement: December 8, 2004
Names of parties: The Republic and the several
Underwriters named in
Schedule I thereto
================================================================================
SCHEDULE II
PROVISIONS FOR MEETINGS OF THE HOLDERS OF THE DEBT SECURITIES
1. Definitions
In this Agreement and the Conditions of the Debt Securities, the following
expressions have the following meanings:
"Block Voting Instruction" means, in relation to any Meeting, a document in
the English language issued by the Agent:
(a) certifying that certain specified Debt Securities (the "deposited Debt
Securities") have been deposited with the Agent (or to its order at a
bank or other depositary) or blocked in an account with a clearing
system and will not be released until the earlier of:
(i) the conclusion of the Meeting; and
(ii) the surrender to the Agent, not less than 48 hours before the
time fixed for the Meeting (or, if the Meeting has been
adjourned, the time fixed for its resumption), of the receipt for
the deposited or blocked Debt Securities and notification thereof
by the Agent to the Republic;
(b) certifying that the depositor of each deposited Debt Security or a
duly authorized person on its behalf has instructed the Agent that the
votes attributable to such deposited Debt Security are to be cast in a
particular way on each resolution to be put to the Meeting and that,
during the period of 48 hours before the time fixed for the Meeting,
such instructions may not be amended or revoked;
(c) listing the total number and (if in definitive form) the certificate
numbers of the deposited Debt Securities, distinguishing for each
resolution between those in respect of which instructions have been
given to vote for, or against, the resolution; and
(d) authorizing a named individual or individuals to vote in respect of
the deposited Debt Securities in accordance with such instructions;
"Chairman" means, in relation to any Meeting, the individual who takes the
chair in accordance with paragraph 7 (Chairman);
"Conditions" mean the terms and conditions of the Debt Securities,
substantially in the form of Exhibit I and as modified from time to time in
accordance with their terms, and any reference to a numbered "Condition" is
to the correspondingly numbered provision thereof;
"Extraordinary Resolution" means:
(a) in relation to any Reserved Matter:
(i) a resolution passed at a Meeting duly convened and held in
accordance with this Schedule by a majority consisting of not
less than 75% of the aggregate principal amount of all
outstanding Debt Securities; or
(ii) a resolution in writing signed by or on behalf of holders of not
less than 75% of the aggregate principal amount of all
outstanding Debt Securities; and
(b) in relation to any other matter:
(i) a resolution passed at a Meeting duly convened and held in
accordance with this Schedule by a majority consisting of not
less than 66.67% of the aggregate principal amount of the
outstanding Debt Securities which are represented at that
Meeting; or
(ii) a resolution in writing signed by or on behalf of holders of not
less than 66.67% of the aggregate principal amount of all
outstanding Debt Securities;
"Meeting" means a meeting of holders of the Debt Securities (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 other than:
(a) any such person whose appointment has been revoked and in relation to
whom the Fiscal Agent has been notified in writing of such revocation
by the time which is 48 hours before the time fixed for such Meeting;
and
(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, one more than half; and
(c) for voting on any Extraordinary Resolution relating to a Reserved
Matter, three quarters;
provided, however, that, in the case of a Meeting which has resumed after
adjournment for want of a quorum it means:
(a) 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
2
Debt Securities represented or held by the Voters actually present at
the Meeting; and
(b) for voting on any Extraordinary Resolution relating to a Reserved
Matter, one quarter;
"Reserved Matter" means any proposal to:
(a) change any date, or the method for determining the date, fixed for
payment of principal or interest in respect of the Debt Securities, to
reduce the amount of principal or interest payable on any date in
respect of the Debt Securities or to alter the method of calculating
the amount of any payment in respect of the Debt Securities on
redemption or maturity or the date for any such payment;
(b) effect the exchange or substitution of the Debt Securities for, or the
conversion of the Debt Securities into, shares, bonds or other
obligations or securities of the Republic or any other person or body
corporate formed or to be formed;
(c) reduce or cancel the principal amount of the Debt Securities;
(d) vary the currency or place of payment in which any payment in respect
of the Debt Securities is to be made;
(e) amend the status of the Debt Securities;
(f) amend the obligation of the Republic to pay additional amounts under
Condition 2;
(g) amend the Events of Default or the Events of Acceleration set out in
Condition 4;
(h) amend the law governing the Debt Securities, the courts to the
jurisdiction to which the Republic has submitted in the Debt
Securities, the Republic's obligation to maintain an agent for service
of process in the United States or the Republic's waiver of immunity,
in respect of actions or proceedings brought by any holder of the Debt
Securities set out in Condition 6 and 7;
(i) modify the provisions contained in this Schedule concerning the quorum
required at any Meeting or any adjournment thereof or concerning the
majority required to pass an Extraordinary Resolution or the
percentage of votes required for the taking of any action;
(j) change the definition of "Extraordinary Resolution" or "outstanding"
in the conditions of the Debt Securities and/or in this Schedule.
(k) instruct any holder of the Debt Securities or committee appointed on
behalf of all holders of the Debt Securities pursuant to paragraph 17
of this Schedule to withdraw, settle or compromise any proceeding or
claim being asserted pursuant to Condition 4;
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(l) confer upon any committee appointed pursuant to paragraph 17 of this
Schedule any powers or discretions which the holder of the Debt
Securities could themselves exercise by Extraordinary Resolution; or
(m) amend this definition;
"Voter" means, in relation to any Meeting, the bearer of a Voting
Certificate, a Proxy or the bearer of a Debt Security in definitive form
who produces such Debt Security in definitive form at the Meeting;
"Voting Certificate" means, in relation to any Meeting, a certificate in
the English language issued by the Agent and dated in which it is stated:
(a) that certain specified Debt Securities (the "deposited Debt
securities") have been deposited with the Agent (or to its order at a
bank or other depositary) or blocked in an account with a clearing
system and will not be released until the earlier of:
(i) the conclusion of the Meeting; and
(ii) the surrender of such certificate to the Agent; and
(b) that the bearer of such certificate is entitled to attend and vote at
the Meeting in respect of the deposited Debt Securities;
"24 hours" means a period of 24 hours including all or part of a day upon
which banks are open for business in both of the places where the relevant
Meeting is to be held and in each of the places where the Agent has its
address, as specified in Schedule I, (disregarding for this purpose the day
upon which such Meeting is to be held) 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 Voting Certificates And Block Voting Instructions
The holder of a Debt Security may obtain a Voting Certificate from the
Agent or require the Agent to issue a Block Voting Instruction by
depositing such Debt Security with the Agent or arranging for such Debt
Security to be (to its satisfaction) held to its order or under its control
or blocked in an account with a clearing system not later than 48 hours
before the time fixed for the relevant Meeting. A Voting Certificate or
Block Voting Instruction shall be valid until the release of the deposited
Debt Securities to which it relates. So long as a Voting Certificate or
Block Voting Instruction is valid, the bearer thereof (in the case of a
Voting Certificate) or any Proxy named therein (in the case of a Block
Voting Instruction) shall be deemed to be the holder of the Debt Securities
to which it relates for all purposes in connection with the Meeting. A
Voting Certificate and a Block Voting Instruction cannot be outstanding
simultaneously in respect of the same Debt Security.
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3. References To Deposit/Release Of Debt Securities
Where Debt Securities are represented by the Global Debt Securities or are
held in definitive form within a clearing system, references to the
deposit, or release, of Debt Securities shall be construed in accordance
with the usual practices (including blocking the relevant account) of such
clearing system.
4. Validity Of Block Voting Instructions
A Block Voting Instruction shall be valid only if it is deposited at the
address of the Fiscal Agent, as specified in Schedule I, or at some other
place approved by the Fiscal Agent, at least 24 hours before the time fixed
for the relevant Meeting or the Chairman decides otherwise before the
Meeting proceeds to business. If the Fiscal Agent requires, a notarised
copy of each Block Voting Instruction and satisfactory proof of the
identity of each Proxy named therein shall be produced at the Meeting, but
the Fiscal Agent shall not be obliged to investigate the validity of any
Block Voting Instruction or the authority of any Proxy.
5. Convening Of Meeting
The Republic may convene a Meeting at any time, and shall be obliged to do
so upon the request in writing of holders of the Debt Securities holding
not less than one tenth of the aggregate principal amount of the
outstanding Debt Securities delivered at the address of the Fiscal Agent,
as specified in Schedule I.
6. Notice
At least 21 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 holders of the
Debt Securities and the Agent (with a copy to the Republic). The notice
shall set out the full text of any resolutions to be proposed and shall
state that the Debt Securities may be deposited with, or to the order of,
the Agent for the purpose of obtaining Voting Certificates or appointing
Proxies not later than 48 hours before the time fixed for the Meeting.
7. Chairman
An individual (who may, but need not, be a holder of the Debt Securities)
nominated in writing by the Republic 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 Republic may
appoint a Chairman. The Chairman of an adjourned Meeting need not be the
same person as was the Chairman of the original Meeting.
8. 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 Debt
5
Securities; provided, however, that, so long as at least the Relevant
Fraction of the aggregate principal amount of the outstanding Debt
Securities is represented by the Global Debt Security, a single Proxy
representing the holder thereof shall be deemed to be two Voters for the
purpose of forming a quorum.
9. 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 holder of the Debt Securities,
it shall be dissolved; and
(b) in the case of any other Meeting, 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; provided, however,
that:
(i) the Meeting shall be dissolved if the Republic so decides; and
(ii) no Meeting may be adjourned more than once for want of a quorum.
10. 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.
11. 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.
12. Participation
The following may attend and speak at a Meeting:
(a) Voters;
(b) representatives of the Republic and the Fiscal Agent;
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(c) the financial advisers of the Republic;
(d) the legal counsel to the Republic and the Fiscal Agent; and
(e) any other person approved by the Meeting.
13. Show Of Hands
Except where the proviso to paragraph 8 (Quorum) applies, 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.
14. Poll
A demand for a poll shall be valid if it is made by the Chairman, the
Republic or one or more Voters representing or holding not less than one
fiftieth of the aggregate principal amount of the outstanding Debt
Securities. 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 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.
15. 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. dollars 1,000 in aggregate
face amount of the outstanding Debt Securities represented or held by
him.
In the case of a voting tie the Chairman shall have a casting vote.
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.
16. Validity Of Votes By Proxies
Any vote by a Proxy in accordance with the relevant Block Voting
Instruction shall be valid even if such Block Voting Instruction or any
instruction pursuant to which it was given has been amended or revoked,
provided that the Fiscal Agent 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 in relation to a Meeting shall remain in force
in relation to any
7
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 Proxy to vote at the Meeting when it is resumed.
17. Powers
A Meeting shall have power (exercisable 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 Republic for any modification,
abrogation, variation or compromise of any of the Conditions or any
arrangement in respect of the obligations of the Republic under or in
respect of the Debt Securities;
(c) to approve the substitution of any person for the Republic (or any
previous substitute) as principal obligor under the Debt Securities;
(d) to waive any breach or authorize any proposed breach by the Republic
of its obligations under or in respect of the Debt Securities or any
act or omission which might otherwise constitute an event of default
under the Debt Securities;
(e) to authorize the Fiscal Agent or any other person to execute all
documents and do all things necessary to give effect to any
Extraordinary Resolution;
(f) to give any other authorization or approval which is required to be
given by Extraordinary Resolution; and
(g) to appoint any person or persons (whether holder of the Debt
Securities or not) as a committee or committees to represent the
interests of the holder of the Debt Securities (in any discussions
with the Republic or any other creditors of the Republic in connection
with any Event of Default, Event of Acceleration, any proposed
restructuring of the Debt Securities or other indebtedness of the
Republic or otherwise) and to confer upon a committee or committees
(appointed pursuant to this paragraph or Condition 5) any powers or
discretions which the holder of the Debt Securities could themselves
exercise by Extraordinary Resolution.
18. Extraordinary Resolution Binds All Holders
An Extraordinary Resolution shall be binding upon all holders of the Debt
Securities whether or not present at such Meeting and each of the holder of
the Debt Securities 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 holder of the Debt Securities and the Agent (with a copy to the
Republic) within 14 days of the conclusion of the Meeting.
8
19. Minutes
Minutes shall be made of all resolutions and proceedings at each Meeting.
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
summarized 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.
20. Outstanding Debt Securities
For the purposes of (i) ascertaining the right to attend and vote at any
Meeting, and (ii) Conditions 4 and 5, those Debt Securities (if any) which
are for the time being held by any person (including but not limited to the
Republic) for the benefit of the Republic or by any public body owned or
controlled, directly or indirectly, by the Republic shall (unless and until
ceasing to be so held) be deemed not to remain outstanding.
9
EXHIBIT I
FORM OF NOTE
REPUBLIC OF HUNGARY
FLOATING RATE NOTES DUE 2006
This Debt Security is a Global Debt Security within the meaning of the Fiscal
Agency Agreement and is registered in the name of Cede & Co., as the nominee of
The Depository Trust Company, a New York Corporation ("DTC"). This Debt Security
may not be exchanged in whole or in part for a debt security registered, and no
transfer of this Debt Security in whole or in part may be registered, in the
name of any person other than DTC or a nominee thereof, except in the limited
circumstances described in the Conditions referred to within this Debt Security.
Unless this certificate is presented by an authorized representative of DTC, to
the Republic of Hungary or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co., or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co., or to such other entity as is requested by an
authorized representative of DTC), any transfer, pledge or other use hereof for
value or otherwise by or to any person is wrongful inasmuch as the registered
owner hereof, Cede & Co. has an interest herein.
PAYABLE AS TO PRINCIPAL AND INTEREST IN LAWFUL MONEY OF
THE UNITED STATES OF AMERICA
FULLY REGISTERED NOTES
***100,000,000.00***
CUSIP No. 000000XX0
COMMON CODE No. 020817780
REGISTERED No. _________
REGISTERED HOLDER: Cede & Co., or its registered assigns
PRINCIPAL SUM OF ONE HUNDRED MILLION DOLLARS
00
XXX XXXXXXXX XX XXXXXXX (the "Republic"), for value received, hereby promises to
pay to the registered owner specified above or registered assigns on the 15th
day of December, 2006, upon presentation and surrender of this Global Debt
Security, the principal sum specified above in lawful money of the United States
of America at the office of Citibank, N.A. in London or The City of New York,
New York, and to pay interest thereon in like money in the manner provided in
the Conditions endorsed hereon from December 15, 2004, or from the most recent
interest payment date to which interest has been paid, or duly provided for,
such interest to be payable quarterly at the floating rate calculated as
provided in the Conditions endorsed hereon on the 15th day of March, on the 15th
day of June, on the 15th day of September, and on the 15th day of December in
each year (each an "Interest Payment Date") until the principal of this Global
Debt Security shall have been paid, the first of such payments of interest to
become due and payable on the 15th day of March, 2005. Notwithstanding anything
to the contrary provided herein, any payment of principal or interest falling
due on a day which is not a business day for the Fiscal Agent (as defined in the
Fiscal Agency Agreement between the Republic and Citibank, N.A., London, dated
as of December 15, 2004) will be payable on the next succeeding business day and
no interest shall accrue for the intervening period, provided however that if
that next succeeding business day falls in the next calendar month, such payment
of principal or interest will be payable on the first preceding business day.
The interest so payable on any such Interest Payment Date will be paid to the
person in whose name this Global Debt Security is registered at the close of
business on the fifteenth day (whether or not such day is a business day)
preceding such Interest Payment Date (each a "Record Date").
This Global Debt Security is a direct, unconditional, unsecured and
general obligation of the Republic. This Global Debt Security ranks and will
rank at least equally in right of payment with all other unsecured and
unsubordinated payment obligations of the Republic outstanding at the date of
issue of this Global Debt Security or issued thereafter, except for such
obligations as may be preferred by mandatory provisions of applicable law. This
Global Debt Security will be backed by the full faith and credit of the
Republic. The Republic will give no preference to one obligation over another on
the basis of priority of issue date or currency of payment.
This Global Debt Security is not redeemable prior to maturity at the
option of the Republic or of the registered holders thereof.
This Global Debt Security is subject to the Conditions endorsed on the
reverse hereof and shall not be valid or enforceable for any purpose unless
authenticated by the manual signature of the Fiscal Agent. This Global Debt
Security shall be dated the date of its authentication by the Fiscal Agent.
11
IN WITNESS WHEREOF, the Republic has caused this Global Debt Security
to be duly executed by the facsimile signature of Xx. Xxxxxx Xxxxxxx and a
facsimile of the written, printed or stamped name of the Republic to be hereon
imprinted.
On behalf of the Republic of Hungary
By: ____________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer of the Government Debt
Management Agency Ltd. of the Republic of
Hungary as attorney for the Republic of Hungary
represented by its Minister of Finance
FISCAL AGENT'S CERTIFICATE
OF AUTHENTICATION
This is a permanent global debt security evidencing
the Debt Securities
referred to in the aforementioned
Fiscal Agency Agreement
Citibank, N.A.
By: _________________________
AUTHORIZED SIGNATURE
DATED:
--------------------------------------------------------------------------------
12
THE CONDITIONS WITHIN REFERRED TO
1. This Global Debt Security is one of the permanent global securities
evidencing a duly authorized issue of Floating Rate Notes due 2006 of the
Republic (each a "Debt Security" and, collectively and including this Global
Debt Security, the "Debt Securities"), limited in aggregate principal amount to
U.S. $100,000,000 and issued under the Fiscal Agency Agreement dated as of
December 15, 2004 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Fiscal Agency Agreement"), between the
Republic, and Citibank, N.A., London, as fiscal agent (the "Fiscal Agent" or
"Agent"), to which Fiscal Agency Agreement reference is hereby made for a
statement of the respective rights, duties, limitations of rights, obligations
and immunities thereunder of the Republic, the Agent and the holders of the Debt
Securities. The Debt Securities are issuable as fully registered Debt Securities
without coupons in denominations of $1,000 and integral multiples of $1,000 in
lawful money of the United States of America.
The Republic may from time to time, without the consent of the holders
of the Debt Securities, create and issue further debt securities having the same
terms and conditions as the Debt Securities in all respects (or in all respects
except for the first payment of interest) so as to form a single series with the
Debt Securities.
2. All payments made in respect of this Global Debt Security,
including payments of principal and interest, to a holder that is not a resident
of the Republic, shall be made by the Republic without withholding or deduction
for or on account of any present or future taxes, duties, levies or other
governmental charges of whatever nature, imposed or levied by the Republic or by
any political subdivision or taxing authority therein or thereof ("Taxes"). If
the Republic is required by law to deduct or withhold any such amounts, it will
pay such additional amounts (including any deduction or withholding with respect
to additional amounts) to the holder hereof who is not a resident of Hungary as
may be necessary so that every net payment of the principal of and interest on
this Global Debt Security paid to such holder after making all such deductions
and withholdings shall equal the amount provided for in this Global Debt
Security to be then due and payable, except that there will be no additional
amounts paid with respect to this Global Debt Security to the holder hereof if
such Taxes:
(i) would not have been imposed but for some present or former
connection (or a connection of a fiduciary, shareholder or other
related party) of the holder with the Republic, including the
holder being or having been a citizen or resident of the Republic
or being or having been engaged in a trade or business or present
in the Republic or having, or having had, a permanent
establishment in the Republic;
(ii) are imposed on a payment to an individual and is required to be
made pursuant to the European Council Directive 2003/48/EC or any
other directive implementing the conclusions of the EU Council of
Finance Ministers meeting of November 26 and 27, 2000 on the
taxation of savings income or any law implementing or complying
with, or introduced in order to conform to, such Directive;
(iii) are imposed because the holder presents a Debt Security in
definitive form for payment more than thirty (30) days after the
date on which the payment became due and payable;
(iv) constitute an estate, inheritance, gift, sales, transfer or
personal property tax or any similar tax, assessment or
governmental charge;
(v) are payable other than by withholding;
(vi) would not have been imposed but for the failure to comply with
certification, information or other reporting requirements
concerning the holder's nationality, residence or identity (or
the nationality, residence or identity of the beneficial owner of
this Global Debt Security), if such holder's compliance is
required by the laws of the Republic or of any political
subdivision or taxing authority of the Republic to avoid or
reduce such tax and if such compliance is not materially more
onerous (in form, in procedure and in the substance of
information disclosed) than comparable information or other
reporting requirements imposed under United States tax law;
(vii) are required to be withheld by any paying agent from a payment
on this Global Debt Security if such payment can be made without
such withholding by another paying agent; or
(viii) are imposed as a result of any combination of the items listed
above.
Furthermore, no additional amounts shall be paid with respect to any
Debt Security to a holder who is a fiduciary or partnership or other than the
sole beneficial owner of such payment to the extent that the settlors with
respect to such fiduciary, partner or beneficial owner, as the case may be,
would not have been entitled to payment of such additional amounts if they held
this Global Debt Security themselves.
In the event that the Republic is required to deduct or withhold Taxes
with respect to a holder, the Republic will make such deduction or withholding
and remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Republic will furnish such holder, upon
request, within a reasonable period of time after the date of the payment of any
Taxes due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by the Republic.
3. As long as any Debt Security remains outstanding, the Republic will
not allow any Security Interest to be established on any of the Republic's or
the National Bank of Hungary's assets or revenues, present or future, in order
to secure (i) any Public External Indebtedness of the Republic having an
original maturity of at least one year; or (ii) any Public External Indebtedness
of the National Bank of Hungary having an original maturity of at least one year
and incurred on or prior to December 31, 1998, unless the debt securities are
secured equally and rateably to this external indebtedness.
14
For these purposes:
"External Indebtedness" means any obligation in respect of existing or
future Indebtedness denominated or payable, or at the option of the holder
thereof payable, in a currency other than the lawful currency of the Republic of
Hungary. If at any time the lawful currency of the Republic of Hungary becomes
the Euro, then External Indebtedness shall also include Indebtedness expressed
in or payable or optionally payable in Euro, if (i) such Indebtedness was issued
after the date on which the Euro became the lawful currency of the Republic of
Hungary, and (ii) more than 50% of the aggregate principal amount of such
Indebtedness was initially placed outside the Republic of Hungary.
"Public External Indebtedness" means External Indebtedness which: (i)
is in the form of, or represented by, bonds, notes or other similar securities;
and (ii) is, or may be, quoted, listed or ordinarily purchased and sold on any
stock exchange, automated trading system or over-the-counter or other securities
market.
"Indebtedness" means any indebtedness of any Person (whether incurred
as principal or surety) for money borrowed.
"Person" means any individual, company, corporation, firm,
partnership, joint venture, association, organization, state or agency of a
state or other entity, whether or not having separate legal personality.
"Security Interest" means any lien, pledge hypothecation, mortgage,
security interest, charge or other encumbrance or arrangement which has a
similar legal and economic effect, and, without limitation, anything analogous
to any of the foregoing under the laws of any jurisdiction.
4. An "Event of Default" means any of the following:
(i) the Republic fails to pay the principal of or interest on any of
the Debt Securities for more than 30 days after payment is due;
or
(ii) the Republic does not perform any of its other covenants under
any of the Debt Securities for more than 60 days after the holder
of the Debt Security has given written notice of the breach to
the Republic at the Fiscal Agent's corporate trust office.
An "Event of Acceleration" means any of the following:
(i) any action, condition or any other thing which at any time is
required to be taken, fulfilled or done in order: (A) to enable
the Republic lawfully to enter into, exercise its rights and
perform and comply with its obligations under and in respect of
the Debt Securities, (B) to ensure that those obligations are
legal, valid, binding and enforceable and (C) subject to their
official translation into the Hungarian language, to make the
Debt Securities admissible in evidence in the courts of the
Republic of Hungary,
15
is not taken, fulfilled or done within 30 days of receipt by the
Republic of written notice thereof; or
(ii) it becomes illegal for the Republic to perform any of its
obligations under the Debt Securities or if these obligations
become invalid and not remedied by the Republic within 30 days'
written notice thereof.
If an Event of Default or an Event of Acceleration occurs, all of the
Debt Securities may, by written notice addressed and delivered by the holders of
at least 25% of the aggregate principal amount of the outstanding Debt
Securities to the Republic at the office of the Fiscal Agent, be declared to be
immediately due and payable, unless prior to such date the Republic shall have
remedied the Event of Default or Event of Acceleration for all the Debt
Securities.
If the Fiscal Agent receives notice in writing from holders of at
least 50% in aggregate principal amount of the outstanding Debt Securities
and/or a resolution is passed at a meeting of the holders of the Debt
Securities, duly convened and held in accordance with the Fiscal Agency
Agreement, to the effect that the Event(s) of Default and/or Event(s) of
Acceleration giving rise to a declaration of acceleration made pursuant to the
conditions above is or are cured or is or are waived by them following any such
declaration and that such holders request the Fiscal Agent to rescind the
relevant declaration, the Fiscal Agent shall, by notice in writing to the
Republic and the holders, rescind the relevant declaration whereupon it shall be
rescinded and shall have no further effect.
The Republic is not obliged to provide investors with periodic
evidence that there are no Events of Default and/or Events of Acceleration.
Please also note that the Fiscal Agency Agreement does not provide for the
holders to be notified of the existence of an Event of Default or an Event of
Acceleration or for any right to examine the Debt Securities register.
5. The Fiscal Agency Agreement contains provisions for convening
meetings of holders of the Debt Securities to consider matters relating to the
Debt Securities, including, without limitation, the modification of any
provision of the terms of the Debt Securities. Any such modification may be made
if, having been approved in writing by the Republic, it is sanctioned by an
Extraordinary Resolution. Such a meeting may be convened by the Republic and
shall be convened by the Fiscal Agent upon the request in writing of holders
holding not less than 10% of the aggregate principal amount of the outstanding
Debt Securities. The quorum at any meeting of holders convened to vote on an
Extraordinary Resolution will be two or more persons holding or representing not
less than 50% of the aggregate principal amount of the outstanding Debt
Securities or, at any adjourned meeting of holders, two or more persons being or
representing holders, whatever the aggregate principal amount of the outstanding
Debt Securities held or represented; provided, however, that any proposals
relating to a Reserved Matter may only be sanctioned by an Extraordinary
Resolution passed at a meeting of holders at which two or more persons holding
or representing not less than 75% of the aggregate principal amount of the
outstanding Debt Securities or, at any adjourned meeting, 25% of the aggregate
principal amount of the outstanding Debt Securities form a quorum. Any
Extraordinary Resolution duly passed at any such meeting shall be binding on all
the holders of the Debt Securities, whether present or not.
16
If a resolution is brought in writing, 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 holders.
For these purposes:
"Extraordinary Resolution" means:
(i) in relation to any Reserved Matter:
(x) a resolution passed at a meeting of holders duly convened
and held in accordance with the Fiscal Agency Agreement by a
majority consisting of not less than 75% of the aggregate
principal amount of all outstanding Debt Securities; or
(y) a resolution in writing signed by or on behalf of holders of
not less than 75% of the aggregate principal amount of all
outstanding Debt Securities; and
(ii) in relation to any other matter:
(x) a resolution passed at a meeting of holders duly convened
and held in accordance with the Fiscal Agency Agreement by a
majority consisting of not less than 66.67% of the aggregate
principal amount of the outstanding Debt Securities which
are represented at that meeting; or
(y) a resolution in writing signed by or on behalf of holders of
not less than 66.67% of the aggregate principal amount of
all outstanding Debt Securities.
"Reserved Matter" means any proposal to:
(i) change any date, or the method for determining the date, fixed
for payment of principal or interest in respect of the Debt
Securities, to reduce the amount of principal or interest payable
on any date in respect of the Debt Securities or to alter the
method of calculating the amount of any payment in respect of the
Debt Securities on redemption or maturity or the date for any
such payment;
(ii) effect the exchange or substitution of the Debt Securities for,
or the conversion of the Debt Securities into, shares, bonds or
other obligations or securities of the Republic or any other
person or body corporate formed or to be formed;
(iii) reduce or cancel the principal amount of the Debt Securities;
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(iv) vary the currency or place of payment in which any payment in
respect of the Debt Securities is to be made;
(v) amend the status of the Debt Securities;
(vi) amend the obligation of the Republic to pay additional amounts
under Condition 2;
(vii) amend the Events of Default or the Events of Acceleration set
out in Condition 4;
(viii) amend the law governing the Debt Securities, the courts to the
jurisdiction to which the Republic has submitted in the Debt
Securities, the Republic's obligation to maintain an agent for
service of process in the United States or the Republic's waiver
of immunity, in respect of actions or proceedings brought by any
holder of the Debt Securities set out in Conditions 6 and 7;
(ix) modify the provisions contained in this Schedule concerning the
quorum required at any meeting of holders of the Debt Securities
or any adjournment thereof or concerning the majority required to
pass an Extraordinary Resolution or the percentage of votes
required for the taking of any action;
(x) change the definition of "Extraordinary Resolution" or
"outstanding" in these conditions of the Debt Securities and/or
in the Fiscal Agency Agreement;
(xi) instruct any holder of the Debt Securities or committee appointed
on behalf of all holders of the Debt Securities pursuant to the
Fiscal Agency Agreement to withdraw, settle or compromise any
proceeding or claim being asserted pursuant to Condition 4;
(xii) confer upon any committee appointed pursuant to the Fiscal
Agency Agreement any powers or discretions which the holder of
the Debt Securities could themselves exercise by Extraordinary
Resolution; or
(xiii) amend this definition.
The holders of the Debt Securities may, by a resolution passed at a
meeting of holders duly convened and held in accordance with the Fiscal Agency
Agreement by a majority of at least 50% in aggregate principal amount of the
Debt Securities then outstanding, or by notice in writing to the Fiscal Agent
signed by or on behalf of the holders of at least 50% in aggregate principal
amount of the Debt Securities then outstanding, appoint any persons as a
committee to represent the interests of the holders if any of the following
events shall have occurred:
(i) an Event of Default or an Event of Acceleration;
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(ii) any event or circumstance which would, with the giving of notice,
lapse of time, the issuing of a certificate and/or fulfillment of
any other requirement provided for in Condition 4 become an Event
of Default or an Event of Acceleration; or
(iii) any public announcement by the Republic, to the effect that the
Republic is seeking or intends to seek a restructuring of the
Debt Securities (whether by amendment, exchange offer or
otherwise).
Such committee in its discretion may, among other things, (i) engage
legal advisers and financial advisers to assist it in representing the interests
of the holders of the Debt Securities, (ii) adopt such rules as it considers
appropriate regarding its proceedings and (iii) enter into discussions with the
Republic and/or other creditors of the Republic. The Republic shall pay any
reasonably incurred fees and expenses of any such committee (including, without
limitation, the fees and expenses of the committee's legal advisers and
financial advisers, if any) within 30 days of the delivery to the Republic of a
reasonably detailed invoice and supporting documentation.
For the purposes of (i) ascertaining the right to attend and vote at
any meeting of the holders of the Debt Securities and (ii) Conditions 4 and 5,
those Debt Securities (if any) which are for the time being held by any person
(including but not limited to the Republic) for the benefit of the Republic or
by any public body owned or controlled, directly or indirectly, by the Republic
shall (unless and until ceasing to be so held) be deemed not to remain
outstanding.
6. As more fully set forth in the Fiscal Agency Agreement, the
Republic has appointed the Embassy of the Republic of Hungary, Office at the
Trade Commissioner, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as its authorized agent upon which process may be served in any action arising
out of or based on the Debt Securities which may be instituted in any Federal or
State court in New York, New York by the holder of any Debt Security, and the
Republic hereby expressly accepts the jurisdiction of any such court in respect
of any such action. Such appointment shall be irrevocable so long as any of the
Debt Securities remain outstanding, unless and until a successor shall have been
appointed by the Republic as its authorized agent for such purpose and such
successor authorized agent shall have accepted such appointment. Notwithstanding
the foregoing, any action arising out of or based on the Debt Securities may be
instituted by the holder of any Debt Security in any competent court in the
Republic of Hungary. The Republic hereby waives irrevocably, to the fullest
extent permitted by law, any immunity from jurisdiction to which it might
otherwise be entitled in any such action which may be instituted by the holder
of any Debt Security in Federal or State court in New York, New York or in any
competent court in the Republic of Hungary. This waiver is intended to be
effective upon execution of this Global Debt Security without further act by the
Republic before any such court, and introduction of this Global Debt Security
into evidence shall be final and conclusive evidence of such waiver. Such waiver
constitutes only a limited and specific waiver for the purposes of the Debt
Securities and under no circumstances shall it be interpreted as a general
waiver by the Republic or a waiver with respect to proceedings unrelated to the
Debt Securities. Neither such appointment nor such waiver shall be interpreted
to include the waiver of any immunity with respect to: (i) actions brought
against the Republic under U.S. State or Federal securities laws; (ii) present
or future "premises of the mission" as defined in the Vienna
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Convention on Diplomatic Relations signed in 1961; (iii) "Consular premises" as
defined in the Vienna Convention on Consular Relations signed in 1963; (iv) any
other property or assets used solely or mainly for official state purposes in
the Republic or elsewhere; or (v) military property or military assets or
property or assets of the Republic related thereto.
7. This Global Debt Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of law principles of such State (other than Section 5-1401 of the
General Obligation Law of the State of New York), except with respect to its
authorization and execution by the Republic, which shall be governed by the laws
of the Republic of Hungary.
8. Except as set forth in this Condition 8, the Debt Securities are
issuable only as fully registered global securities, without coupons, each
registered in the name of DTC, a nominee thereof or a successor to DTC or a
nominee thereof, and
(i) no Global Debt Security may be transferred, except in whole and
not in part, and only to DTC, one or more nominees of DTC or one
or more respective successors of DTC and its nominees; and
(ii) no Global Debt Security may be exchanged for any Debt Security
other than another Global Debt Security.
Notwithstanding any other provisions of the Fiscal Agency Agreement or
this Global Debt Security, a Global Debt Security may be transferred to, or
exchanged for registered Debt Securities registered in the name of, a person
other than DTC, a nominee of DTC or a successor of DTC or its nominee if:
(i) DTC (a) notifies the Republic that it is unwilling or unable to
continue as depository for such Global Debt Security or (b)
ceases to be a clearing agency registered under the Securities
Exchange Act of 1934 at a time when it is required to be, and in
either such case (a) or (b) a successor depository is not
appointed by the Republic within 90 days after receiving such
notice or becoming aware that DTC is no longer so registered;
(ii) the Republic, in its sole discretion, instructs the Fiscal Agent
in writing that a Global Debt Security shall be so transferable
and exchangeable; or
(iii) there shall have occurred and be continuing an Event of Default
and/or Event of Acceleration with respect to the Debt Securities
evidenced by this Global Debt Security.
Registered Debt Securities issued in exchange for this Global Debt
Security will be registered in such names, and issued in such denominations (of
$1,000 and integral multiples thereof), as an authorized representative of DTC
shall request.
9. The Republic will maintain for the Debt Securities (i) a Paying
Agent and Registrar in the City of London, England or The City and State of New
York, and (ii) if the Debt Securities are issued in definitive form, a transfer
agent and paying agent in The City and State
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of New York. The Republic will cause the Registrar to maintain a register in
which shall be entered the names and addresses of the holders of the Debt
Securities of this issue and the particulars of the Debt Securities held by them
respectively and in which, subject to Condition 8 above, transfers of the Debt
Securities shall be registered. Such Paying Agent and Registrar in England shall
be Citibank, N.A., London, unless and until the Republic appoints a different
Paying Agent or Registrar (if applicable) in the same city. The Republic will
appoint a transfer agent and paying agent as or when required in The City and
State of New York. The holders of the Debt Securities may serve notices and
demands with respect to the Debt Securities at the office of any Paying Agent
and Registrar maintained pursuant to this Condition. In addition, all notices of
the Republic will be published in English in London in the Financial Times and
in New York in The Wall Street Journal (U.S. Edition). If at any time
publication in any such newspaper is not practicable, notices will be valid if
published in such English language newspaper with general circulation in the
respective market regions as the Republic shall determine. Any such notice shall
be deemed to have been given on the date of such publication or, if published
more than once on different dates, on the first date on which publication is
made.
10. Subject to Condition 8 above, this Global Debt Security is
transferable upon presentation for such purpose at the aforesaid office,
accompanied by a written instrument of transfer in form approved by the Republic
executed by the registered holder hereof or by his duly authorized attorney,
whereupon this Global Debt Security will be canceled and one or more Debt
Securities of this issue for an equal aggregate principal amount will be
delivered to the transferee.
11. Subject to Condition 8 above, Debt Securities of this issue upon
presentation for such purpose at the office of the Registrar referred to in
Condition 9, accompanied by a written instrument of transfer in form approved by
the Republic executed by the registered holder or by his duly authorized
attorney, may be exchanged for an equal aggregate principal amount of other
fully registered Debt Securities of this issue in other authorized
denominations.
12. Subject to Condition 8 above, the Republic will make transfers and
exchanges of Debt Securities of this issue as aforesaid upon compliance by the
holders of the Debt Securities with such reasonable regulations as may be
prescribed by the Republic, and the Republic shall not be entitled to make any
charge in respect to transfers and exchanges of Debt Securities of this issue,
other than in respect of transfer taxes, if any. Each Debt Security issued upon
any such transfer or exchange shall be dated the date of its authentication by
the Fiscal Agent.
13. Interest on the Debt Securities of this issue shall be computed at
a rate equal to the three-month USD LIBOR plus 0.03% per annum on the basis of
the actual number of days in the applicable Interest Period (as defined herein)
divided by 360.
The term "three-month USD LIBOR" means, with respect to any Interest
Determination Date:
(a) the rate for three-month deposits in United States dollars
commencing on the second London banking day succeeding the
Interest Determination
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Date, that appears on the Telerate Page 3750 (as described below)
as of 11:00 a.m., London time, on the Interest Determination
Date; or
(b) if no rate appears on the particular Interest Determination Date
on the Telerate Page 3750, the rate calculated by the Calculation
Agent (as described below) as the arithmetic mean of at least two
offered quotations obtained by the Calculation Agent after
requesting the principal London offices of each of four major
reference banks in the London interbank market to provide the
Calculation Agent with its offered quotation for deposits in
United States dollars for the period of three months, commencing
on the second London banking day succeeding the Interest
Determination Date, to prime banks in the London interbank market
at approximately 11:00 a.m., London time, on that Interest
Determination Date and in a principal amount that is
representative for a single transaction in United States dollars
in that market at that time; or
(c) if fewer than two offered quotations referred to in clause (b)
are provided as requested, the rate calculated by the Calculation
Agent as the arithmetic mean of the rates quoted at approximately
11:00 a.m., New York time, on the particular Interest
Determination Date by three major banks in The City of New York
selected by the Calculation Agent for loans in United States
dollars to leading European banks for a period of three months
commencing on the second London banking day succeeding the
Interest Determination Date, and in a principal amount that is
representative for a single transaction in United States dollars
in that market at that time; or
(d) if the banks so selected by the Calculation Agent are not quoting
as mentioned in clause (c), three-month USD LIBOR in effect
immediately prior to the particular Interest Determination Date.
"Telerate Page 3750" means the display on Telerate (or any successor
service) on such page (or any other page as may replace such page on such
service) or such other service or services as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying the
London interbank rates major banks for United States dollars.
"London banking day" means a day on which commercial banks are open
for business, including dealings in United States dollars, in London, England.
"Interest Determination Date" for any Interest Period shall be the
second London banking day preceding the first day of such Interest Period. The
term "Interest Period" refers to the period from and including December 15, 2004
to but excluding the first Interest Payment Date and each successive period from
and including an Interest Payment Date to but excluding the next Interest
Payment Date.
Citibank, N. A., acting through its London office, shall serve as the
"Calculation Agent" for the Notes. In the absence of willful default, bad faith
or manifest error, the Calculation Agent's determination of three-month USD
LIBOR and its calculation of the applicable
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interest rate for each Interest Period shall be final and binding. The
Calculation Agent shall make available the interest rates for current and
preceding Interest Periods by delivery of such notice through such medium as
available to participants in DTC, Euroclear and Clearstream, Luxemburg, or any
successor thereof, and in accordance with applicable respective rules and
procedures as long as the Debt Securities are held in global form. In the event
that the Debt Securities are held in definitive form, the interest rates for
current and preceding Interest Periods will be published in the manner described
above in Condition 9. The Republic shall have the right to replace the
Calculation Agent with the London office of another leading commercial bank or
investment bank in New York. If the appointed office of the Calculation Agent is
unable or unwilling to continue to act as the Calculation Agent or fails to
determine the interest rate for any Interest Period, the Republic shall appoint
the London office of such other leading commercial bank or investment bank in
New York as may be approved in writing by the Fiscal Agent.
Unless other arrangements are made, payments of interest on this
Global Debt Security will be made by check drawn on a bank or trust company in
The City and State of New York payable to the order of the registered holder,
or, in the case of joint holders, to the order of all such joint holders or to
such person as the joint holders may request in writing, provided that payment
of principal will be made only upon prior presentation and surrender of this
Global Debt Security at the office of a Paying Agent of the Republic referred to
in Condition 9. Such check shall be mailed to the address of the registered
holder as such address shall appear on the register maintained by the Registrar
pursuant to Condition 9 hereof, or, in the case of joint holders, to such
registered address of that joint holder who is first named in the register as
one of such joint holders or to such address specified in the aforementioned
request of such joint holders. The registered holder hereof or his legal
personal representatives will be regarded as exclusively entitled to the
principal moneys hereby secured, and in the case of joint registered holders of
this Global Debt Security the said principal monies shall be deemed to be owing
to them on joint account. Any holder of Debt Securities, the aggregate principal
amount of which equals or exceeds U.S. $1,000,000, may, by written notice to the
Paying Agent no later than the Record Date therefor, elect to receive the
interest payment in respect of such Debt Securities by wire transfer in same-day
funds to a bank account maintained by such holder in the United States. The Debt
Securities do not have the benefit of any sinking fund obligations.
14. Claims for payment of the principal amount of this Debt Security
shall become void ten years after such principal amount became due and payable.
Claims for payment of interest on this Debt Security shall become void five
years after relevant interest payment date on which the interest became due and
payable.
15. In case any Debt Security shall at any time become mutilated or
destroyed or stolen or lost, and such Debt Security, or evidence of the loss,
theft or destruction thereof (together with the indemnity hereinafter referred
to and such other documents or proof as may be required in the premises) shall
be delivered to the Registrar referred to in Condition 9 above, a new Debt
Security of like tenor and date will be issued by the Republic in exchange for
the Debt Security so mutilated, or in lieu of the Debt Security so destroyed or
stolen or lost, but, in the case of any destroyed or stolen or lost Debt
Security, only upon receipt of evidence satisfactory to the Republic that such
Debt Security was destroyed or stolen or lost, and, upon receipt also of
indemnity satisfactory to the Republic. All expenses and reasonable charges
associated with
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procuring such indemnity and with the preparation, authentication and delivery
of a new Debt Security shall be borne by the owner of the Debt Security
mutilated, destroyed, stolen or lost.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants in UNIF GIFT MIN ACT-______Custodian_______
common (Cust) (Minor)
TEN ENT-as tenants by Under Uniform Gifts to Minors Act________
the entireties (State)
JT TEN-as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list
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TRANSFER
For Value Received the undersigned hereby sells, assigns and transfers
unto
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[name and address including zip code and social security number or other
identifying number of assignee] the within Debt Security, hereby irrevocably
constituting and appointing
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attorney to transfer the Debt Security on the register kept at the office of the
Registrar of the Republic for such purpose in the Borough of Manhattan, The City
of New York and State of New York, United States of America or London, with full
power of substitution
dated this _______ day of __________, ____. ______________________
Signature
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Debt Security in every particular without
alteration or enlargement or any change whatsoever and must be guaranteed by a
commercial bank or trust company having its principal office or correspondent in
The City of New York or by a member of the New York Stock Exchange.
25
