Document:

exv4w2

EXHIBIT 4.2

REGISTERED GLOBAL DEBT SECURITY

THIS DEBT SECURITY IS A GLOBAL DEBT SECURITY WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT
(AS DEFINED IN THE ATTACHED CONDITIONS) 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. THIS DEBT SECURITY REPRESENTS “SECURITIES OF A SERIES” WITHIN THE MEANING OF THE
FISCAL AGENCY AGREEMENT.

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.

REPUBLIC OF HUNGARY

7.625% NOTES DUE 2041

PAYABLE AS TO PRINCIPAL AND INTEREST IN LAWFUL MONEY OF

THE UNITED STATES OF AMERICA

FULLY REGISTERED NOTES

Certificate No. 1

US$500,000,000

CUSIP No. 445545AF3

COMMON CODE No. 061189734

ISIN No. US445545AF36

REGISTERED HOLDER: Cede & Co., or its registered assigns

PRINCIPAL SUM OF FIVE HUNDRED MILLION DOLLARS

 

 

THE REPUBLIC OF HUNGARY (the “Republic”), for value received, hereby promises to pay to the
registered owner specified above or registered assigns on March 29, 2041, 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 March 29, 2011 or from the most recent interest payment date to which interest has been
paid, or duly provided for, such interest to be payable semi-annually at the rate of 7.625% per
annum on March 29 and on September 29 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 September 29, 2011. Notwithstanding anything to the contrary provided
herein, any payment of principal or interest falling due on a day which is not a Business Day (as
defined in the Fiscal Agency Agreement, dated as of January 29, 2010, between the Republic and
Citibank, N.A., as Fiscal Agent and Paying Agent) 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 (as defined in the Fiscal Agency Agreement). This Global Debt Security shall be dated the
date of its authentication by the Fiscal Agent.

 

 

IN WITNESS WHEREOF, the Republic has caused this Global Debt Security to be duly executed by the
facsimile signature of Mr. Gyula Pleschinger 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: Gyula Pleschinger
	 	 
	 

	 	Title: Chief Executive Officer of the Government Debt Management Agency Pte Ltd. of the
Republic of Hungary as attorney for the Republic of Hungary represented by its Minister for
National Economy	 	 

[Signature Page to Global Note]

 

 

	 	 	 	 	 

	FISCAL AGENT’S CERTIFICATE

OF AUTHENTICATION	 	 
	 
	 	 	 	 
	This is a permanent global debt security evidencing
the Securities of a Series referred to in the aforementioned
Fiscal Agency Agreement.	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Name: Citibank, N.A.	 	 
	 

	 	Title: Fiscal Agent	 	 

Dated: March 29, 2011

[Signature Page to Certificate of Authentication]

 

 

THE CONDITIONS WITHIN REFERRED TO

	1	 	This Global Debt Security is one of the permanent global securities evidencing a duly
authorized issue of US$750,000,000 aggregate principal amount of 7.625% Notes due March 29,
2041 of the Republic (herein called the “Debt Securities”) as executed by the authorized
signatory of the Republic, Mr. Gyula Pleschinger (the “Republic Authorized Signatory”). The
Debt Securities are issued under the Fiscal Agency Agreement dated as of January 29, 2010 (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., as fiscal agent and paying agent
(the “Fiscal Agent”, “Agent” or “Registrar”), 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. Notices to the Fiscal Agent can be sent to Citibank, N.A., Attention: Citigroup
Centre, 21st Floor, Canada Wharf, London E14 5LB. The Debt Securities are issuable
as fully registered Debt Securities without coupons in minimum denominations of US$2,000 and
integral multiples of US$2,000 in lawful money of the United States of America. This Debt
Security is one of the series designated on the face hereof, initially limited to the
aggregate price amount of US$750,000,000.
	 
	 	 	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 even if further Debt Securities have original issue discount for U.S.
federal income tax purposes and even if doing so may adversely affect the value of the
original Debt Securities. Any additional Debt Securities, together with the Debt Securities,
will constitute a single series of Debt Securities under the Fiscal Agency Agreement.
	 
	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 within the Republic
(“Taxes”). In the event the Republic is required by law to deduct or withhold any such Taxes
from payments, the Republic will pay such additional amounts as may be necessary so that the
net amount received is equal to the amount provided for in this Global Debt Security to be
paid in the absence of such deduction or withholding. A holder will not be paid any additional
amounts however, if the Tax is:

	 	(i)	 	a Tax that would not have been imposed but for the holder’s present or former
connection (or a connection of the holder’s fiduciary, shareholder or other related
party) 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)	 	imposed on a payment to an individual and is required to be made pursuant to the
European Council Directive 2003/48/EC on taxation of savings income in the form on
interest payments or any other Directive implementing the conclusions of the EU Council
of Finance Ministers meeting of November 26 and 27, 2000 or any law implementing or
complying with, or introduced in order to conform to, such Directive;
	 
	 	(iii)	 	imposed because the holder presents a Debt Security for payment more than thirty
(30) days after the date on which the payment became due and payable;

 

 

	 	(iv)	 	an estate, inheritance, gift, sales, transfer or personal property tax,
assessment or governmental charge;
	 
	 	(v)	 	a tax, assessment or other governmental charge which is payable other than by
withholding;
	 
	 	(vi)	 	a Tax that 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;
	 
	 	(vii)	 	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 settlor 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.
	 
	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.
	 
	 	 	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, 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.
	 
	 	 	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;
	 
	 	(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 Schedule I to the Fiscal Agency Agreement
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;
	 
	 	(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
Consulate General of the Republic of Hungary, 223 East 52nd Street, New York, New York 10022,
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 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, 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 or each of Euroclear Bank S.A./N.V (“Euroclear”) and Clearstream Banking,
S.A. (“Clearstream”) (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 from Euroclear,
Clearstream or DTC or on 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 $2,000 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 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., 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 a daily newspaper of
general circulation in London for so long as the Debt Securities are listed on the London
Stock Exchange and the rules of the London Stock Exchange so require. 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 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 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 on the basis of a
360-day year of twelve 30-day months. 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.
	 
	14	 	Claims for payment of the principal amount of this Debt Security shall become void 10
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. Mutilated Debt Securities
must be surrendered before replacement therefore will be issued. Application for replacement
may be made only by the registered holder thereof and shall be made at the office of the
Fiscal Agent specified in Condition 1. All expenses and reasonable charges associated with
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.

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 common
	 	UNIF GIFT MIN ACT-                     Custodian                     
	 
	 	 	 	 
	 
	 	(Cust)                     (Minor)                    
	 
	 	 	 	 
	TEN ENT-as tenants by the entireties
	 	Under Uniform   Gifts to Minors Act                     
	 
	 	 	 	 
	 
	 	(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.

TRANSFERS

For Value Received the undersigned hereby sells, assigns and transfers unto

 

 

 

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

 

 

 

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
                    ,                     .	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	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.ex40.htm

EXHIBIT 4.0

THE GUITAMMER COMPANY

1999 NON-QUALIFIED STOCK OPTION PLAN

Section l.  Purposes.  The purposes of The Guitammer Company 1999 Non-Qualified Stock Option Plan are to promote the interests of The Guitammer Company and its shareholders by:  (a) attracting and retaining exceptional executive personnel and other key employees of, and advisors and consultants to, and directors of the Company; (b) motivating such employees, advisors, consultants and directors by means of performance-related incentives to achieve longer-range performance goals; and (c) providing all long-term employees of the Company with opportunity to participate in the long-term growth and financial success of the Company.

Section 2.  Definitions.  As used in the Plan, the following terms shall have the meanings set forth below:

“Board” shall mean the Board of Directors of the Company.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Committee” shall mean the full Board or a committee of directors designated by the Board.

“Company” shall mean The Guitammer Company, an Ohio S-Corporation, together with any successor thereto.

“Employee” shall mean an employee or a director of, or an advisor or consultant to, the Company.

“Fair Market Value” shall mean the fair market value of the Shares or other property being valued, as determined by the Committee in its sole discretion.

“Option” shall mean a nonqualified stock option.

“Participant” shall mean any Employee selected by the Committee to receive an Option under the Plan.

“Person” shall mean any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.

“Plan” shall mean The Guitammer Company 1999 Stock Option Plan.

“Shares” shall mean the common shares of the Company or such other securities of the Company as may be designated by the Committee from time to time.

 

 

  

  

  

“Stock Option Agreement” shall mean any written agreement, contract or other instrument or document evidencing any stock option awarded under the Plan.

Section 3.  Administration.

(a)           The Plan shall be administered by the Committee.  Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to:  (i) designate Participants; (ii)  determine the number of Shares to be covered by an Option (iii) determine the terms and conditions of any Option; (iv) determine whether, to what extent and under what circumstances Options may be settled or exercised in cash, Shares, other securities, other Options or other property or canceled, forfeited or suspended; (v) determine whether, to what extent and under what circumstances cash, Shares, other securities, other property and other amounts payable with respect to an Option shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vi) interpret and administer the Plan and any instrument or agreement relating to, or Option granted under, the Plan; (vii) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.  The Committee may designate persons other than members of the Committee to carry out its responsibilities under such conditions and limitations it may prescribe, subject to applicable law.

(b)           The proper officers of the Company shall carry into effect the determinations and actions of the Committee, but no determination or action of the Committee or of an officer of the Company pursuant hereto shall bind or become binding upon or create any obligation of the Company whatsoever unless and until the Company shall have entered into a written and definitive contract with the proposed Participant in respect of an Option.

(c)           Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Option shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all Persons, including the Company, any Participant, any holder or beneficiary of any Option, any shareholder and any Employee.

Section 4.  Shares Available Under the Plan.

(a)           Shares Available.  Subject to adjustment as provided in Section 4(b), the number of Shares available for issuance under the Plan shall be nine hundred (900) authorized but unissued Shares.  If, after the effective date of the Plan, any Shares covered by an Option granted under the Plan, or to which such an Option relates, are forfeited, or if an Option otherwise terminates or is canceled without the delivery of Shares, then the Shares which may be issued under this Plan, to the extent of any such settlement, forfeiture, termination or cancellation, shall again be, or shall become, Shares available for issuance under the Plan.  In the event that any Option granted hereunder is exercised through the delivery of Shares, the number of Shares available under the Plan shall be increased by the number of Shares surrendered.

 

 

  

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(b)           Adjustments.  In the event that any dividend or other distribution (whether in the form of Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other similar extraordinary corporate transaction or event affects the Shares such that an adjustment is necessary in order to prevent extraordinary dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee, upon the advise of its accountants and counsel, shall proportionately adjust any or all (as necessary) of:  (i) the number of Shares or other securities of the Company (or number and kind of other securities or property) which may be issued under this Plan; (ii) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Options; and (iii) the grant or exercise price with respect to any Option; provided that no such adjustment shall be required to be made in connection with the mere issuance by the Company of Shares or other securities of the Company, or warrants, options or other rights to purchase Shares or other securities of the Company, in any case which is not made in conjunction with or as part of such an extraordinary corporate transaction.

(c)           Sources of Shares.  Any Shares issued pursuant to the terms of this Plan may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.

Section 5.  Eligibility for Options.  Options may be granted only to those Employees as may from time to time be designated by the Committee.  Neither the provisions of the Plan nor its adoption by the Board shall be deemed to give any Person a contractual or other right to receive an Option under the Plan.

Section 6.  Options.

(a)           Grant.  Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Employees to whom Options shall be granted, the number and type of Shares to be covered by each Option, and the conditions and limitations applicable to the exercise of the Option.

(b)           Exercise Price.  The Committee shall establish the exercise price at which Shares may be purchased under each Option at the time such Option is granted.

(c)           Exercise.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Stock Option Agreement or thereafter.  In addition, any Option granted herein may be subject to a vesting schedule, as determined by the Committee and included in the applicable Stock Option Agreement.  The Committee may impose such conditions with respect to the exercise of Options, including without limitation, any relating to the application of federal or state securities laws, as it may deem necessary or advisable.  The Committee shall have the right to accelerate the exercisability of any Option or outstanding Option in its sole discretion.  The Committee shall have a reasonable time after receipt of any notice of exercise of an Option in which to make delivery of share certificates for the Shares in respect of which the Option is exercised.

 

 

  

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(d)           Payment.  No Shares shall be delivered pursuant to any exercise of an Option until payment in full of the option price therefor is received by the Company.  Such payment may be made in cash, or its equivalent or, if and to the extent permitted by the Committee, by exchanging Shares owned by the optionee (which are not the subject of any pledge or other security interest) or by a combination of the foregoing, provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Shares so tendered to the Company as of the date of such tender is at least equal to such option price.

Section 7.  Amendment and Termination.

(a)           Amendments to the Plan.  The Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to qualify or comply.

(b)           Amendments to Options.  The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate any Option therefore granted, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would impair the rights of any Participant or any holder or beneficiary of any Option therefore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary.

(c)           Termination.  If a Participant ceases to be an Employee for any reason, within ninety (90) days next succeeding such termination, but not later than ten (10) years from the date of grant of the Option, the Participant (or the executor or administrator of his estate) may exercise option rights as he then has under this Plan.  Options not exercised within the period set forth in the preceding sentences shall thereupon expire and shall not be exercisable thereafter.

Section 8.  General Provisions.

(a)           Nontransferability.

	
  

	
(i)

	
Each Option and each right under any Option shall be exercisable during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative as determined by the Committee.

	
  

	
(ii)

	
No Option may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company; provided that, the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

 

 

  

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(b)           No Rights to Options.  No Employee, Participant or other Person shall have any claim to be granted any Option, and there is no obligation for uniformity of treatment of Employees, Participants or holders or beneficiaries of Options. The terms and conditions of Options need not be the same with respect to each recipient.

(c)           Certificates.  All certificates for Shares or other securities of the Company delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of any applicable federal or state laws; and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.

(d)           Tax Withholding.  A Participant may be required to pay to the Company, and the Company shall have the right and is hereby authorized to withhold from any Share otherwise issued under the Plan, from any payment due or transfer made under any Option or otherwise under the Plan, or from any compensation or other amount owing to a Participant, the amount of any applicable withholding taxes in respect of an Option or a Share otherwise issued under the Plan, its exercise or any payment or transfer under an Option or otherwise under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.  The withholding may be in the form of cash, Shares, other securities, other Options or other property as the Committee may allow. The Committee may provide for additional cash payments to Participants to defray or offset any tax arising from the grant, vesting, exercise or payments of any Option or Share otherwise issued under this Plan.

(e)           Stock Option Agreements.  Each Option hereunder shall be evidenced by a Stock Option Agreement which shall be delivered to the Participant and shall specify the terms and conditions of the Option and any rules applicable thereto, including but not limited to the effect on such Option of the death, retirement or other termination of employment or service of a Participant and the effect, if any, of a change in control of the Company.  In addition, as a condition to any Option under which Shares are issued or are permitted to be issued, the Committee may require any or all Participants to enter into agreements providing for prohibitions and other restrictions on transfers or encumbrances of Shares, on terms and conditions satisfactory to the Committee.

(f)           No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other compensation arrangements.

 

 

  

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(g)           No Right to Employment or Continued Service. Eligibility for participation in this Plan or the grant of an Option shall not be construed as giving a Participant the right to be retained in the employ or service of the Company.  Further, the Company may at any time dismiss a Participant from employment or service, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Stock Option Agreement.

(h)           No Rights as Shareholder.   Subject to the provisions of the Plan and/or the applicable Option, no Participant or holder or beneficiary of any Option shall have any rights as a shareholder with respect to any Shares to be distributed under the Plan until the Participant has become the holder of such Shares.

(i)           Governing Law.  The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Stock Option Agreement shall be determined in accordance with the internal substantive laws of the State of Ohio, applicable to contracts made and performed entirely in the State of Ohio.

(j)           Severability.  If any provision of the Plan or any Option is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Option, or would disqualify the Plan or any Option under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Option, such provision shall be stricken as to such jurisdiction, Person or Option and the remainder of the Plan and any such Option shall remain in full force and effect.

(k)           Other Laws.  The Committee may refuse to issue or transfer any Shares or other consideration under the Plan if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the issuance of such Shares shall be promptly refunded to the relevant Participant, holder or beneficiary.  Without limiting the generality of the foregoing, no Option granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the federal securities laws and the securities laws of any other applicable jurisdiction.

(l)           No Trust or Fund Created.  Neither the Plan nor any Option shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other Person.  To the extent that any Person acquires a right to receive payments from the Company pursuant to the Plan, such rights shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

 

 

  

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(m)           Headings.  Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

(n)           No Impact on Benefits. Options or Shares otherwise issued under this Plan shall not be treated as compensation for purposes of calculating an Employee’s rights under any employee benefit plan.

(o)           Indemnification.  Each person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be made a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such action, suit or proceeding against such person, provided such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person’s own behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such person may be entitled under the Company’s Articles of Incorporation or Code of Regulations, by contract, as a matter of law, or otherwise.

Section 9.  Term of the Plan.

(a)           Effective Date.  This Plan was adopted by the Board on September 30, 1999, and shall be effective on such date.

(b)           Expiration Date.  No Option shall be granted under the Plan after the ten year anniversary of the effective date of the Plan.  Unless otherwise expressly provided in the Plan or in an applicable Stock Option Agreement, any Option granted hereunder may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Option or to waive any conditions or rights under any such Option shall, continue after such ten (10) year anniversary date.

 

  

7

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