Exhibit (5)(C)
FORM OF UNDERWRITING AGREEMENT
REPUBLIC OF HUNGARY
New York, New York
December 8, 2004
DEUTSCHE BANK SECURITIES INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Dear Sirs:
The Republic of Hungary (the "Republic") proposes to sell to Deutsche
Bank Securities Inc., and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited (the
"Underwriters") $100,000,000 principal amount of its Floating Rate Notes due
2006 (the "Offered Securities") pursuant to the provisions of a Fiscal Agency
Agreement dated as of December 15, 2004 (the "Fiscal Agency Agreement"), between
the Republic and Citibank, N. A., London, as fiscal agent (the "Fiscal Agent").
The terms which follow, when used in this Agreement, shall have the
meanings indicated:
"Act" means the Securities Act of 1933.
"Basic Prospectus" means the prospectus included in the Registration
Statement in the form filed with the Commission, as amended or supplemented
to the date of this Agreement, but excluding any amendments or supplements
related solely to an offering of a series of debt securities other than the
Offered Securities.
"Commission" means the Securities and Exchange Commission.
"Effective Date" means the latest date that the Registration Statement
and any post-effective amendment or amendments thereto became or becomes
effective.
"Execution Time" means the date and time that this Agreement is
executed and delivered by the parties hereto.
"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.
"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.
"preliminary prospectus" means the preliminary form (in the form dated
December 7, 2004) of the Prospectus used in connection with the offering of
the Offered Securities, including, without limitation, the Basic Prospectus
and any preliminary prospectus supplement.
"Prospectus" means the Basic Prospectus together with the prospectus
supplement.
"prospectus supplement" means the final prospectus supplement dated
the date hereof filed with the Commission pursuant to Rule 424,
specifically relating to the Offered Securities.
"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.
"Registration Statement" means the registration statement referred to
in Section 1(a)(i) below, as amended at the Execution Time and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule
430A.
"Release" means Release No. 33-6424 under the Act relating to delayed
offerings by foreign governments or political subdivisions thereof.
"Rule 415", "Rule 424" and "Rule 430A" refer to such rules under the
Act as applicable to registration statements subject to Schedule B under
the Act in accordance with the Release and, to the extent any such rule is
not directly applicable, mean the
2
provisions thereunder as made applicable by the Release.
"Rule 430A Information" means information with respect to the Offered
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
1. Representations and Warranties. (a) The Republic represents and
warrants to, and agrees with, each Underwriter as set forth in this Section
1(a).
(i) The Republic meets the requirements for use of Schedule B
under the Act, is a "seasoned foreign government" within the meaning
of the Release, has filed with the Commission a registration statement
(file number 333-10126), including a form of Basic Prospectus, for
registration under the Act of the offering and sale of the Offered
Securities, and has filed with the Commission post-effective
amendments No. 1 and No. 2 to such registration statement. If at any
time prior to completion of the distribution of the Offered Securities
the Republic files with the Commission one or more new amendments to
such registration statement or uses a preliminary prospectus, the
Republic will promptly notify the Underwriters of such case and will,
without charge, supply to the Underwriters prior to any such filing or
distribution as many copies as the Underwriters may from time to time
reasonably request of an amended registration statement or preliminary
prospectus, as the case may be. Such registration statement, as so
amended, has become effective. Although the Basic Prospectus may not
include all the information with respect to the Offered Securities and
the offering thereof required by the Act and the rules thereunder to
be included in the prospectus, the Basic Prospectus includes all such
information as required by the Act and the rules thereunder as
applicable pursuant to the Release to be included therein as of the
Effective Date. The Republic will hereafter file with the Commission
pursuant to the Release and Rules 415 and 424(b)(2) or (5) either (x)
a prospectus supplement to the Basic Prospectus or (y) an amendment to
such Registration Statement, including such prospectus supplement. In
the case of clause (x), the Republic has included in such Registration
Statement, as amended at the most recent Effective Date, the
information required for such procedure pursuant to the Release. Prior
to the termination of the offering of the Offered Securities, the
Republic will not file any amendment of the Registration Statement or
supplement (including the Prospectus or any preliminary prospectus) to
the Basic Prospectus unless the Republic has furnished the
Underwriters a copy for their review prior to filing and will not file
any such proposed amendment or supplement to which the Underwriters
reasonably object, unless the Republic is otherwise advised by its
U.S. counsel that such filing is required under the Act. As filed,
such prospectus supplement or such amendment and prospectus supplement
shall include all such required information with respect to the
Offered Securities and the offering thereof.
(ii) On the Effective Date, the Registration Statement did or
will, and, when the Prospectus is first filed in accordance with Rule
424(b) and on the Closing Date (as defined in Section 3), the
Prospectus (as supplemented at the
3
time of the Closing Date) will, comply in all material respects with
the applicable requirements of the Act, the rules thereunder and the
Release; on the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date, the Prospectus did not and, on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus (as
supplemented in the case of the Closing Date) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Republic makes no representations or warranties as
to the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the
Republic by or on behalf of any Underwriter specifically for inclusion
in the Registration Statement or the Prospectus (or any supplement
thereto).
(iii) The issuance and sale of the Offered Securities will have
been duly authorized, and, when duly executed, authenticated, issued
and delivered as will be provided in the Fiscal Agency Agreement and
paid for in accordance with the terms hereof, the offered Securities
will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Republic, the payment and
performance of which will be backed by the full faith and credit of
the Republic; the Offered Securities will rank at least equally in
right of payment with all other unsecured and unsubordinated
obligations of the Republic, except for such obligations as may be
preferred by mandatory provisions of applicable law. The Republic will
give no preference to one obligation over another on the basis of
priority of issue date, or currency of payment; and the Offered
Securities, when issued and delivered, will conform to the description
thereof contained in the Prospectus.
(iv) This Agreement has been duly authorized, executed and
delivered by the Republic; this Agreement is, and the Fiscal Agency
Agreement and the Offered Securities will be upon the due execution,
authentication, issue and delivery thereof, as the case may be, and
payment therefor by the Underwriters, enforceable against the Republic
according to its terms; this Agreement, the Fiscal Agency Agreement
and the Offered Securities contain no express provision which is
contrary to the laws of the Republic or public policy of the Republic.
(v) None of the execution or delivery by the Republic of this
Agreement, the Fiscal Agency Agreement or the Offered Securities, the
performance of its obligations hereunder or thereunder or the
fulfillment by the Republic of the terms hereof or thereof requires,
under the laws of the Republic, any publication, waiver, consent,
filing, registration, authorization or approval.
(vi) None of the execution or delivery by the Republic of this
Agreement, the Fiscal Agency Agreement or the Offered Securities, the
4
performance by the Republic of its obligations hereunder or
thereunder, or the fulfillment by the Republic of the respective terms
hereof or thereof, will violate any provision of the laws of the
Republic as in effect on the date hereof or, to the best knowledge of
the Legal Advisor (as defined herein), violate any order, rule or
regulations of any Court, regulatory body, or administrative body or
other governmental body of the Republic.
(vii) The Republic is not in default under the provisions of any
agreement or of any instrument evidencing or relating to any
outstanding Public External Indebtedness; and neither the execution
and delivery of, nor the compliance with, this Agreement, the Fiscal
Agency Agreement or the Offered Securities or the covenants contained
herein or therein will conflict with, or constitute a breach or a
default under, any such agreement or instrument to which the Republic
is a party or by which it is bound.
(viii) Except as set forth in the Registration Statement, the
Prospectus and the preliminary prospectus, to the best of its
knowledge, the Republic: is not involved in any litigation relating to
claims or amounts which would challenge the validity or enforceability
of this Agreement, the Fiscal Agency Agreement or the Offered
Securities or the transactions contemplated thereby, and there is no
legal or governmental action, suit or proceeding pending or, to the
best of the Republic's knowledge, threatened, to which the Republic is
or may be subject that, if determined adverse to the Republic, would
have a material adverse effect on the affairs and financial condition
of the Republic.
(ix) The Republic is a member of the International Monetary Fund
and the International Bank for Reconstruction and Development.
(x) The Republic is not a party to any agreement with the United
States of America relating in any way to the immunity of the Republic
from jurisdiction of courts, suit, execution upon a judgment,
attachment prior to judgment or in aid of execution upon a judgment or
any other legal process other than in respect of premises, properties
or assets set forth in Section 13.
(xi) It is not necessary in order to ensure the enforceability or
admissibility in evidence of this Agreement, the Fiscal Agency
Agreement or the Offered Securities that this Agreement, the Fiscal
Agency Agreement or the Offered Securities or any other document be
filed or recorded in the Republic or that any Hungarian tax be paid on
or in respect of the execution of this Agreement, the Fiscal Agency
Agreement or for the issuance of the offered Securities.
(b) Each Underwriter severally represents and warrants to, and agrees
with, the Republic as set forth in this Section 1(b):
(i) It has not offered, sold or delivered, and it will not offer,
sell or deliver, directly or indirectly, any of the Offered Securities
or distribute the
5
Registration Statement, the Prospectus or any preliminary prospectus
or any other material relating to the offering of the offered
Securities or the Republic, in or from any jurisdiction except under
circumstances that will, to the best of its knowledge and belief,
result in compliance with the applicable laws and regulations thereof
(including, without limitation, any prospectus delivery requirements).
(ii) Except for registration under the Act and compliance with
the rules and regulations thereunder and the qualification of the
Offered Securities for offer and sale under the laws of such
jurisdictions as the Underwriters may designate pursuant to Section
5(d), the Republic shall not have any responsibility for, and each
Underwriter severally agrees with the Republic that each such
Underwriter and its respective affiliates will obtain any consent,
approval or authorization required by them for the purchase, offer,
sale or delivery by them of any of the Offered Securities under the
laws and regulations in force in any jurisdiction to which they are
subject or in or from which they make such purchase, offer, sale or
delivery of any of the offered Securities.
(iii) Other than the Registration Statement, the Prospectus and
any preliminary prospectus, no other material or communication that
may be used in connection with the offering of the offered Securities
(the "Other U.S. Offering Materials") has been filed under the Act.
Accordingly, each Underwriter severally represents to and agrees with
the Republic that it has not delivered or distributed and will not
deliver or distribute within the United States or to any U.S. person
(as such terms are defined in Regulation S under the Act) any Other
U.S. Offering Materials, except as permitted by the Act.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Republic
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Republic, at a purchase price of 100% of the
principal amount thereof, plus accrued interest, if any, on the Offered
Securities from December 15, 2004, to the Closing Date, the principal amount of
the Offered Securities set forth opposite such Underwriter's name in Schedule I
hereto.
3. Delivery and Payment. The Offered Securities will be represented by
one or more definitive global securities in registered form, which will be
deposited by or on behalf of the Republic with The Depository Trust Company
("DTC"), ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ or its designated
custodian. Delivery of and payment for the Offered Securities shall be made at
10:00 a.m., New York City time at the offices of Cravath, Swaine & ▇▇▇▇▇ LLP,
Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, on December 15,
2004, which date and time may be postponed by agreement between the Underwriters
and the Republic or as provided in Section 10 hereof (such date and time of
delivery and payment for the Offered Securities being herein called the "Closing
Date"). Delivery of the Offered Securities shall be made to the Underwriters
through the facilities of DTC for the respective accounts of the several
Underwriters (including their accounts at Euroclear System and Clearstream
Banking, societe anonyme) against payment by the several Underwriters of the
6
purchase price thereof to, or upon the order of, the Republic by wire transfer
in immediately available funds. Delivery of the other documents, certificates
and opinions provided for in Section 7 shall be made on the Closing Date.
The certificate or certificates for the Offered Securities shall be
registered in the name of the nominee of DTC and in such denominations as the
Underwriters may request not less than two full business days in advance of the
Closing Date. The Republic will cause the certificate or certificates
representing the Offered Securities to be made available to the Underwriters for
inspection in New York, New York, not later than 1:00 p.m. on the business day
prior to the Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Agreements. The Republic agrees with the several Underwriters that:
(a) The Republic will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, to become effective as soon as reasonably practicable thereafter.
Prior to the termination of the offering of the Offered Securities, the
Republic will not file any amendment of the Registration Statement or
supplement (including the Prospectus or any preliminary prospectus) to the
Basic Prospectus unless the Republic has furnished the Underwriters a copy
for their review prior to filing and will not file any such proposed
amendment or supplement to which the Underwriters reasonably object, unless
the Republic is otherwise advised by its U.S. counsel that such filing is
required under the Act. Subject to the foregoing sentence, the Republic
will cause the Prospectus, properly completed, and any supplement thereto
to be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed by such Rule and will provide
evidence satisfactory to the Underwriters of such timely filing. The
Republic will promptly advise the Underwriters (i) when the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to
Rule 424(b), (iii) when, prior to termination of the offering of the
Offered Securities, any amendment to the Registration Statement shall have
been filed or become effective, (iv) of any request by the Commission for
any amendment of the Registration Statement or supplement to the Prospectus
or for any additional information, (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(vi) of the receipt by the Republic of any notification with respect to the
suspension of the qualification of the Offered Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Republic will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued or suspended, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then
7
supplemented pursuant to the prospectus supplement would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the respective rules thereunder, the Republic promptly will (i)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (ii)
supply any supplemented Prospectus to the Underwriters in such quantities
as they may reasonably request.
(c) The Republic will endeavor to qualify the Offered Securities for
offer and sale under the securities or "Blue Sky" laws of the relevant
jurisdictions as the Underwriters shall reasonably request and, except as
otherwise agreed between the Underwriters and the Republic, to pay all
expenses (including reasonable fees and disbursements of counsel) in
connection with such qualification and in connection with the determination
of the eligibility of the Offered Securities for investment under the laws
of such jurisdictions as the Underwriters may reasonably designate;
provided, however, that the Republic shall not be obligated to file any
general or unlimited consent to service of process or qualify as a foreign
corporation, legal person or similar entity or as a dealer in securities in
any other jurisdiction in which it is not now so qualified and shall not be
required to take any action which would subject it to general or unlimited
service of process in any jurisdiction.
(d) The Republic will make generally available to holders of the
Offered Securities, as soon as practicable, a statement in reasonable
detail in the English language of revenues and expenditures of the Republic
covering the first full fiscal year of the Republic beginning after the
date of this Agreement, which will satisfy the provisions of Section 11(a)
of the Act.
(e) So long as any of the Offered Securities are outstanding, the
Republic will furnish to the Underwriters copies of all reports and
financial statements filed with the Commission in connection with the
Offered Securities.
(f) During the period commencing at the Execution Time and ending one
week following the Closing Date, the Republic will not offer or sell in the
United States, or announce the offering in the United States of, any
securities without the prior written consent of the Underwriters.
(g) The Republic will furnish to the Underwriters and counsel for the
Underwriters, without charge, a signed copy of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
preliminary prospectus and the Prospectus and any supplement thereto as the
Underwriters may reasonably request.
6. Expenses. Except as otherwise agreed by the Underwriters and the
Republic, and subject to such expense caps as they have agreed, whether or not
the transactions
8
contemplated hereunder are consummated or this Agreement is terminated, the
Underwriters will pay all costs and expenses incidental to the performance of
the obligations of the Republic hereunder, including, without limiting the
generality of the foregoing, (i) all such costs and expenses incidental to the
preparing, printing, filing and distributing of the Registration Statement
(including all exhibits thereto), any preliminary prospectus, the Prospectus and
any amendments thereof or supplements thereto, provided, however, that the
Underwriters will pay only the Commission registration fees applicable to the
amount that the registered securities are reduced as a result of the sale of the
Offered Securities, (ii) all such costs and expenses relating to the Fiscal
Agency Agreement, (iii) any such fees charged by securities rating services for
rating the Offered Securities, (iv) transportation and other expenses incurred
in connection with presentations to prospective purchasers of the Offered
Securities and (v) the out-of-pocket expenses of the Republic, provided,
however, that the Republic will pay all its own legal fees. Except as provided
in this Section 6 and in Section 8 hereof, the Underwriters will pay all their
own costs and expenses, including the fees of the United States and Hungarian
counsel, if any.
7. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Offered Securities shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Republic contained herein as of the time of the execution of this
Agreement and the Closing Date, to the accuracy in all material respects of the
statements of the Republic made in any certificates issued pursuant to the
provisions hereof, to the performance by the Republic of its obligations
hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b) and in accordance with Section 5(a) of this Agreement; no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened; and any request of the Commission for additional information
shall have been complied with to the satisfaction of the Underwriters.
(b) The Republic shall have furnished to the Underwriters the written
opinion of the Legal Department of the Government Debt Management Agency
Ltd. (the "Legal Advisor"), satisfactory to the Underwriters, dated the
Closing Date, to the effect that:
(i) the Offered Securities have been duly authorized in
accordance with the laws of the Republic;
(ii) all necessary action has been duly taken by or on behalf of
the Republic to authorize the issuance and sale of the offered
Securities; the Offered Securities have been duly executed, issued and
delivered in accordance with the laws of the Republic; the Offered
Securities, when authenticated in accordance with the Fiscal Agency
Agreement and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will constitute valid and
legally binding obligations of the Republic enforceable in accordance
with their terms and entitled to the benefits of the Fiscal Agency
Agreement; the Offered Securities rank at least equally in right of
payment with all other
9
unsecured and unsubordinated obligations of the Republic, except for
such obligations as may be preferred by mandatory provisions of
applicable law; the Republic will give no preference to one obligation
over another on the basis of priority of issue date, or currency of
payment; and the full faith and credit of the Republic has been
pledged for the due and punctual payment of the principal of and
interest on the Offered Securities and for the performance of the
obligations of the Republic with respect thereto;
(iii) the obligations of the Republic under the Fiscal Agency
Agreement, this Agreement and the Offered Securities are and will be
direct, general and unconditional obligations of the Republic and are,
under the laws of the Republic, subject to civil substantive law and
to the relevant procedural and/or legal requirements relating to
enforcement and recognition of foreign judgments;
(iv) the Republic has the power and authority required for the
execution and delivery of the Fiscal Agency Agreement, this Agreement,
the issuance of the Offered Securities and the performance by the
Republic of its obligations thereunder and hereunder; and none of the
execution or delivery by the Republic of this Agreement, the Fiscal
Agency Agreement or the Offered Securities, the performance of its
obligations hereunder or thereunder or the fulfillment by the Republic
of the terms hereof or thereof requires, under the laws of the
Republic, any publication, waiver, consent, filing, registration,
authorization or approval;
(v) the Fiscal Agency Agreement has been duly authorized,
executed and delivered by the Republic in accordance with the laws of
the Republic and is a valid and binding agreement of the Republic;
(vi) this Agreement has been duly authorized, executed and
delivered by the Republic in accordance with the laws of the Republic;
(vii) subject to the qualifications of Section 13 of this
Agreement, the provisions of this Agreement and the Offered Securities
wherein the Republic consents to the jurisdiction of certain courts in
the United States and agrees not to assert the defense of immunity, on
the grounds of sovereignty or otherwise, are valid and binding; final
judgment against the Republic for the payment of money in any such
suit, action or proceeding brought, in accordance with such
provisions, in the Federal or state courts in New York, New York would
be admissible in evidence against the Republic in the appropriate
courts of the Republic to enforce such claim;
(viii) subject to the qualifications of Section 13 of this
Agreement, under the laws of the Republic in effect as of the date of
such opinion, the Republic would not be entitled to plead, or cause to
be pleaded on its behalf, sovereign immunity from the jurisdiction of
the courts of the Republic in respect of any action relating to the
Offered Securities, this Agreement or the Fiscal Agency Agreement;
10
(ix) none of the execution or delivery by the Republic of this
Agreement, the Fiscal Agency Agreement or the Offered Securities, the
performance by the Republic of its obligations hereunder or
thereunder, or the fulfillment by the Republic of the respective terms
hereof or thereof, will violate any provision of the laws of the
Republic or, to the best knowledge of the Legal Advisor, violate any
order, rule or regulations of any court, regulatory body, or
administrative body or other governmental body of the Republic;
(x) none of the execution or delivery by the Republic of this
Agreement, the Fiscal Agency Agreement or the Offered Securities, the
performance by the Republic of its obligations hereunder or
thereunder, or the fulfillment by the Republic of the respective terms
hereof or thereof, will, to the best knowledge of the Legal Advisor,
violate, or result in a breach of, the terms of, or cause a default
under, any agreement or instrument evidencing or relating to any
Public External Indebtedness to which the Republic is a party or by
which it is bound, and the Republic is not in default under the
provisions of any such agreement or of any such instrument;
(xi) there is no action, suit, or proceeding pending or, to the
best of the Legal Advisor's knowledge, threatened against or affecting
the Republic, before any court or administrative agency in the
Republic, challenging the validity or enforceability of this
Agreement, the Fiscal Agency Agreement, or the Offered Securities or
the transactions contemplated thereby, and, except as set forth in the
Registration Statement, the Prospectus or any preliminary prospectus,
there is no legal or governmental action, suit or proceeding pending
or, to the best of the Republic's knowledge, threatened, to which the
Republic is or may be subject that, if determined adverse to the
Republic, would have a material adverse effect on the affairs and
financial condition of the Republic;
(xii) the Registration Statement, as amended, the Prospectus and
their filing with the Commission have been duly authorized by and on
behalf of the Republic, the Registration Statement has been duly
executed on behalf of the Republic and become effective under the Act
and, to the best knowledge of the Legal Advisor, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending before or
threatened by the Commission;
(xiii) ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Minister of Finance, and other
appropriate officials in the Republic have been apprised of the
disclosure standards applicable to the offering under this Agreement
and have reviewed the Prospectus. Based on such review, the results of
which have been discussed with the Legal Advisor, although the Legal
Advisor shall not have made an independent investigation or
verification of the correctness and completeness of the information
included in the Prospectus, nothing has come to the Legal Advisor's
attention that would lead the Legal Advisor to believe that (except as
to the financial and statistical data contained therein as to which
the Legal Advisor need not express any belief) (a) the Registration
Statement and the Prospectus included therein, at the time the
11
Registration Statement became effective, did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make statements therein not
misleading, and (b) the Prospectus, as of the date of such opinion,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xiv) the descriptions of the Offered Securities and the Fiscal
Agency Agreement in the Registration Statement, as amended, and the
Prospectus fairly summarize the material provisions thereof, and the
Offered Securities conform to the description thereof in the
Prospectus; and
(xv) the information set forth in the Prospectus under the
captions "Taxation-Hungarian Taxation", "Description of the Debt
Securities-Governing Law" and "Enforceability of Judgments," insofar
as such statements relate to laws of the Republic and legal matters,
documents or proceedings referred to therein, are accurate and fairly
present the information called for with respect to such legal matters,
documents and proceedings.
In rendering such opinion, the Legal Advisor may rely without
independent investigation on the opinion rendered pursuant to paragraph (c)
below as to matters of New York and United States Federal law, and such
opinion shall be subject to any limitations and exceptions contained in the
opinion so relied upon. References to the Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(c) The Underwriters shall have received on and as of the Closing Date
an opinion, satisfactory to the Underwriters, of White & Case, special
United States counsel to the Republic, to the effect that:
(i) When issued, delivered and paid for by the Underwriters
pursuant to this Agreement and authenticated by the Fiscal Agent
pursuant to the Fiscal Agency Agreement, the Offered Securities will
have been duly executed, issued and delivered and will constitute
valid and binding obligations of the Republic entitled to the benefits
provided by the Fiscal Agency Agreement;
(ii) the statements in the Registration Statement and the
Prospectus under the caption "Description of the Debt Securities" and
"Description of the Notes", insofar as they purport to describe
certain provisions of the Offered Securities and certain provisions of
the Fiscal Agency Agreement, provide a fair summary of such
provisions;
(iii) the statements in the Registration Statement and the
Prospectus under the caption "Taxation-United States Taxation",
insofar as they purport to constitute a summary of United States
Federal income tax law and legal conclusions with respect thereto, are
accurate in all material respects;
(iv) the Fiscal Agency Agreement and this Agreement have been
duly
12
executed and delivered by the Republic;
(v) the Republic has validly submitted, under the laws of the
State of New York and the Federal laws of the United States, to the
jurisdiction of the State and Federal courts in New York, New York, in
any suit, action or proceeding for the enforcement of this Agreement,
the Fiscal Agency Agreement or the Offered Securities;
(vi) the agreement of the Republic contained in this Agreement,
the Offered Securities and the Fiscal Agency Agreement that the laws
of the State of New York shall govern this Agreement, the Fiscal
Agency Agreement and the offered Securities will be (upon due
execution, issue and delivery thereof) binding on the Republic, except
as described in the Prospectus under "Enforceability of Judgments";
(vii) the Offered Securities are exempt from the provisions of
the Trust Indenture Act of 1939, as amended, under Section 304(a)(6)
of said Act, and no indenture in respect of the Offered Securities
need be qualified under said Act;
(viii) the Registration Statement has become effective under the
Act as of the date and time specified in such opinion, and, in so far
as such counsel is aware, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose are pending before or threatened by the Commission; and
(ix) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements
thereto (other than financial or statistical data included or omitted
therefrom, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the
Securities Act; and that nothing has to come to such counsels
attention which causes such counsel to believe that (other than
financial or statistical data included therein or omitted therefrom,
as to which such counsel need express no belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that as of the date of such opinion, the Prospectus, as
amended or supplemented, if applicable, contains any untrue statement
of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In giving such opinion, White & Case may (i) assume that the Fiscal
Agency Agreement, the Offered Securities and this Agreement have been duly
authorized, executed and delivered by the appropriate parties thereto and
that each such party has adequate power and authority to enter therein,
(ii) rely without independent investigation on the opinion delivered
pursuant to paragraph (b) above as to matters governed by the laws of the
Republic, and such opinion shall be subject to any limitations and
exceptions
13
contained in the opinion delivered pursuant to paragraph (b) above, (iii)
rely as to material factual matters, to the extent such counsel deems
proper, on certificates of responsible officials of the Republic and
certificates or other written statements of officials having custody of
documents relating to the Republic, and (iv) with respect to the matters
covered in subparagraph (ix) above, counsel may state that their opinion
and belief is based upon their participation in the preparation of the
Registration Statement and the Prospectus and any amendment or supplement
thereto but is without independent check or verification.
(d) The Underwriters shall have received from Cravath, Swaine & ▇▇▇▇▇
LLP, counsel for the Underwriters, such opinion and letter, dated the
Closing Date, with respect to the issuance and sale of the Offered
Securities, the Fiscal Agency Agreement, the Registration Statement and the
Prospectus, as amended or supplemented, and other related matters as the
Underwriters may reasonably require, and the Republic shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters. In giving such opinion, Cravath, Swaine &
▇▇▇▇▇ LLP may rely without independent investigation on the opinions
delivered pursuant to paragraph 7(b) above and paragraph 7(e) below as to
the matters governed by the laws of the Republic and such opinion shall be
subject to any limitations and exceptions contained in the opinions
delivered pursuant to paragraphs 7(b) and 7(e).
(e) The Underwriters shall have received from ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ in
association with ▇▇▇▇▇ & ▇▇▇▇▇ LLP, special Hungarian counsel for the
Underwriters, such opinion and letter, dated the Closing Date, with respect
to the issuance and sale of the Offered Securities and the Fiscal Agency
Agreement and such other related matters as the Underwriters may reasonably
require, and the Republic shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(f) The Republic shall have furnished to the Underwriters a
certificate of the Republic, signed by either (i) ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Minister of Finance, or (ii) other senior official of the Republic as
authorized by the Minister of Finance in writing, dated the Closing Date,
to the effect that the signer of such certificate has carefully examined
the Registration Statement and the Prospectus, as amended or supplemented,
and this Agreement and that:
(i) the representations and warranties of the Republic in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Republic has complied in all material respects with the
Agreement and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Republic's knowledge,
threatened, and no proceedings to restrain or enjoin the issuance or
delivery of the Offered Securities, or in any manner to question the
laws, proceedings, directives, resolutions, approvals,
14
consents or orders under which the Offered Securities are to be issued
or to question the validity of the Offered Securities have been
instituted or, to the Republic's knowledge, threatened, and none of
said laws, directives, resolutions, consents or orders have been
repealed, revoked or rescinded in whole or in relevant part; and
(iii) there has been no material adverse change or any
development involving a prospective material adverse change in the
affairs and financial condition of the Republic from that set forth in
the Prospectus (exclusive of any supplement thereto dated after the
Execution Time) that was not disclosed to the Underwriters prior to
the Execution Time.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof dated after the Execution Time) and the Prospectus
(exclusive of any supplement thereto dated after the Execution Time), there
shall not have been any change or any development involving a prospective
change in the affairs and financial condition of the Republic from that set
forth in the Registration Statement that, in the reasonable judgment of the
Underwriters, is material and adverse and makes it impractical or
inadvisable to proceed with the offering or delivery of the Offered
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof dated after the Execution Time) and the Prospectus
(exclusive of any supplement thereto dated after the Execution Time).
(h) The Underwriters shall have received letters on the Closing Date
confirming the rating of the Offered Securities as A- by Standard and
Poor's Corporation, A1 by ▇▇▇▇▇'▇ Investors Service, Inc. and A- by Fitch
Ratings Limited and, subsequent to the Execution Time, there shall not have
been any decrease in the rating or related outlook of any of the Republic's
debt securities by any of these rating agencies.
(i) Subsequent to the Execution Time, no proceeding shall be pending
or threatened to restrain or enjoin the issuance, sale or delivery of the
Offered Securities or in any manner to question the laws, proceedings,
directives, resolutions, approvals, consents or orders under which the
Offered Securities are to be issued or to question the validity of the
Offered Securities, and none of such laws, proceedings, directives,
resolutions, approvals, consents or orders shall have been repealed,
revoked or rescinded in whole or in part.
(j) Subsequent to the Execution Time, the issuance, sale, delivery and
purchase of the Offered Securities shall not be prohibited by any statute,
order, rule or regulation formally proposed or promulgated by any
legislative or regulatory body of the Republic, the United States of
America or the State of New York, other than "Blue Sky" regulations.
(k) Subsequent to the Execution Time, the Republic shall not have
ceased to be a member of the International Monetary Fund or the
International Bank for Reconstruction and Development.
15
(l) Prior to the Closing Date, the Republic shall have furnished to
the Underwriters such further information, certificates, opinions and other
documents as the Underwriters may reasonably request.
If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and to counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Underwriters. Notice of such
cancellation shall be given to the Republic in writing at the addresses provided
in Section 14 hereof.
The documents required to be delivered by this Section 7 shall be
delivered at the office of Cravath, Swaine & ▇▇▇▇▇ LLP, counsel for the
Underwriters, at Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
at the Closing Date.
8. Reimbursement of Underwriters' Expenses. If the sale of the Offered
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because of any refusal, inability or failure on the part of the Republic to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Republic will reimburse the
Underwriters severally upon demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Offered Securities.
9. Indemnification and Contribution. (a) The Republic agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934 (the "Exchange Act") against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement for the registration of the Offered
Securities as originally filed or in any amendment thereof, or in any
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or, in the case of the
Prospectus, in light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Republic will not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the
16
Republic by or on behalf of any Underwriter specifically for inclusion therein
and (ii) such indemnity with respect to the preliminary prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Offered Securities if such person did not receive a copy
of the Prospectus (or the Prospectus as amended or supplemented) at or prior to
the confirmation of the sale of such Offered Securities to such person in any
case where such delivery is required by the Act, if the untrue statement or
omission of a material fact contained in the preliminary prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented) and
the Republic furnished copies thereof to such Underwriter.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Republic, each of its officials and employees who signs the Registration
Statement, the officials and employees of the Republic to the same extent as the
foregoing indemnity from the Republic to each Underwriter, but only with
reference to written information relating to such Underwriter furnished in
writing to the Republic by or on behalf of such Underwriter specifically for
inclusion in the documents referred to in such foregoing indemnity. The
indemnity contained in this section will be in addition to any liability which
any Underwriter may otherwise have. The Republic acknowledges that the
statements set forth under the heading "Underwriting" in the prospectus
supplement and the names of the Underwriters set forth on the bottom of the
cover page of the prospectus supplement constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the documents referred to in such foregoing indemnity, and the Underwriters
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing pursuant to Section 14 of
the Agreement of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a) or
(b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel, if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the
17
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to local counsel) for all such indemnified parties
and that such fees and expenses shall be reimbursed as they are incurred. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 9 is unavailable or insufficient (unless such indemnity is
unavailable or insufficient by operation of the provisos set forth therein) to
hold harmless an indemnified party for any reason, the Republic and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending the same) (collectively, "Losses") to which the
Republic and one or more of the Underwriters may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Republic and
by such Underwriters from the offering of the Offered Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among the Underwriters relating to the offering of the Offered
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Offered Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Republic and the Underwriters shall contribute
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Republic and of the Underwriters in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Republic shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Republic or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or present such statement or omission. The Republic and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and
18
each official of the Republic who shall have signed the Registration Statement
shall have the same rights to contribution as the Republic, subject in each case
to the applicable terms and conditions of this paragraph (d).
10. Default by an Underwriter. If any one or more Underwriters shall
fail or refuse to purchase and pay for any of the Offered Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase and pay shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
principal amount of Offered Securities set forth opposite their names in
Schedule I hereto bears to the aggregate principal amount of Offered Securities
set forth opposite the names of all the remaining Underwriters) the Offered
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that, in the event that the aggregate principal
amount of the Offered Securities that the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Offered Securities set forth in Schedule I hereto, the remaining
Underwriters, or other underwriters acceptable to the nondefaulting
Underwriters, shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Offered Securities, and if such nondefaulting
Underwriters, or other underwriters acceptable to the nondefaulting
Underwriters, do not purchase all the Offered Securities, this Agreement will
terminate without liability to any nondefaulting Underwriter or the Republic. In
the event of a default by any Underwriter as set forth in this Section 10, the
Closing Date shall be postponed when required or justified for such period, not
exceeding seven days, as the nondefaulting Underwriters shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Republic and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
11. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Republic prior
to delivery of and payment for the Offered Securities, if prior to such time (i)
trading in securities on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or Republic authorities or (iii) there shall have occurred (x)
any outbreak or material escalation of hostilities in which the United States or
the Republic is involved or declaration by the United States or the Republic of
a national emergency or war or other calamity or crisis or (y) a material
adverse change in the affairs and/or financial conditions in the Republic or the
United States the effect of which on financial markets is such as to make it, in
the sole but reasonable judgment of the Underwriters impracticable or
inadvisable to proceed with the offering or delivery of the Offered Securities
as contemplated by the Prospectus.
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Republic and of the Underwriters set forth in or made in writing under, or
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or
19
the Republic or any of the officers, directors or controlling persons referred
to in Section 9 hereof, and will survive delivery of and payment for the Offered
Securities. The provisions of Sections 8 and 9 hereof shall survive the
termination or cancelation of this Agreement.
13. Waiver of Immunity; Submission to Jurisdiction; Agent for Service
of Process. The Republic and the Underwriters agree that the Federal courts of
the United States sitting in the Southern District of New York, the courts of
the State of New York sitting in New York, New York and the courts of the
Republic shall have exclusive jurisdiction in respect of any legal action or
proceeding brought against the Republic and arising out of or relating to this
Agreement. In respect of any such proceeding which may be brought hereunder, the
Republic irrevocably submits to the jurisdiction of the Federal courts of the
United States in the Southern District of New York, the courts of the State of
New York sitting in New York, New York and the courts of the Republic and waives
any right of objection to the laying of venue in any such court, including,
without limitation, any objection on the basis of inconvenient forum.
Notwithstanding the foregoing, any action against the Republic arising out of or
based on this Agreement may also be instituted by any Underwriter in any
competent court in the Republic of Hungary, and the Republic irrevocably agrees
to be bound by any final judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or is available.
The Republic hereby appoints the Embassy of the Republic of Hungary,
Office of the Trade Commissioner, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent (the "Authorized Agent") upon which
process may be served in an action arising out of or based on this Agreement
which may be instituted in any State or Federal court in New York, New York by
an Underwriter or any controlling persons (as defined in either Section 15 of
the Act or Section 20 of the Exchange Act) of such Underwriter. Such appointment
shall be irrevocable so long as any Offered Securities remain outstanding unless
and until a successor shall have been appointed as the Republic's Authorized
Agent and such successor 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 13, or at such other address in
the Borough of Manhattan, The City of New York, as may be the office 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 14) 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 of its receipt thereof.
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 action arising out of or based on this Agreement 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, the Fiscal Agency Agreement or the Offered 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 this Agreement, the Fiscal
Agency Agreement or the Offered Securities. Neither such appointment nor such
waiver shall be interpreted to include the waiver of any immunity with
20
respect to: (1) 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.
14. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telefaxed and confirmed to Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax no.: ▇▇▇-▇▇▇-▇▇▇▇), Attention:
▇▇▇▇▇ ▇▇▇▇ and mailed, delivered or telefaxed and confirmed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. International Limited, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (fax
no.: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇), Attention: Head of Transaction Management; or, if sent
to the Republic, will be mailed, delivered or telegraphed and confirmed to it
at:
Government Debt Management Agency Ltd.
Csalogany u. 9-11
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇-▇▇▇-▇▇▇▇
15. English Documents. All documents to be delivered under this
Agreement by the Republic shall be in the English language or accompanied by a
certified English translation.
16. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 9 hereof, and no
other person will have any right or obligation hereunder. No purchaser of any
Offered Securities from any Underwriter shall be deemed to be a successor or
assign merely by reason of such purchase.
17. Applicable Law. This Agreement will 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, except with respect to its
authorization and execution by and on behalf of the Republic, which shall be
governed by the law of the Republic.
18. Counterparts. This Agreement may be signed in two or more
counterparts, which together shall constitute one and the same instrument.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Republic and the several Underwriters.
Very truly yours,
The Republic of Hungary,
represented by its Minister of Finance
By:
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
Deutsche Bank Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By: Deutsche Bank Securities Inc.
By:
------------------------
Name:
Title:
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By:
------------------------
Name:
Title:
22
SCHEDULE I
Principal Amount of
Offered Securities
Underwriters to be Purchased
------------------------------------------------------ ----------------------
Deutsche Bank Securities Inc. $ 50,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited............ 50,000,000
======================
Total................................................. $100,000,000
23