AMENDMENTS TO BE MADE TO TURKEY’S FISCAL AGENCY AGREEMENT
EXHIBIT E
AMENDMENTS TO BE MADE TO TURKEY’S FISCAL AGENCY AGREEMENT
The Republic of Turkey (“Turkey”) is amending the fiscal agency agreement dated as of December 15, 1998 between itself and JPMorgan Chase Bank to permit Turkey to issue debt securities, called “collective action securities,” that will contain provisions relating to certain aspects of default, acceleration and voting on amendments, modifications, changes and waivers that differ from those applicable to Turkey’s outstanding public external indebtedness. These provisions are referred to as “collective action clauses.” The following description is a summary of the collective action clauses to be included in series of collective action securities that Turkey may issue in the future. Because it is only a summary, the description may not contain all of the information that is important to investors in Turkey’s debt securities. Therefore, Turkey urges you to read the form of amendment to the fiscal agency agreement that is included as part of this filing.
Default
Turkey’s collective action clauses will provide that any of the following events will be an event of default with respect to the debt securities of any series:
(a) Turkey fails to pay, when due, principal of (and premium on, if any) or interest on the debt securities of that series and such failure continues for a period of 30 days; or
(b) Turkey defaults in the performance or observance of or compliance with any of its other obligations set forth in the debt securities of that series which default is not remedied within 60 days after written notice of such default shall have been given to Turkey by the holder of any debt securities of that series at the corporate trust office of the Fiscal Agent in the City of New York; or
(c) any other present or future External Indebtedness (as defined in the fiscal agency agreement) of Turkey for or in respect of moneys borrowed or raised in an amount in the aggregate of not less than US$40,000,000 (or its equivalent in other currencies or composite currency units) becomes due and payable prior to its stated maturity otherwise than at the option of Turkey or any such amount of External Indebtedness is not paid when due (in accordance with any extension granted in any modification, consent or waiver by the holders of such External Indebtedness) or, as the case may be, within any applicable grace period; or
(d) Turkey ceases to be a member of the International Monetary Fund or of any successor (whether corporate or not) that performs the functions of, or functions similar to, the International Monetary Fund; or
(e) Turkey announces its inability to pay its debts as they mature; or
(f) it becomes unlawful for Turkey to perform or comply with any of its payment obligations under any debt securities of that series.
Acceleration of Maturity
If an event of default described under the heading “Default” above occurs and is continuing with respect to any series of debt securities that have been designated collective action securities, the holders of at least 25% of the aggregate principal amount of the outstanding debt securities of that series may, by notice to the fiscal agent, declare all the debt securities of that series to be due and payable immediately. Holders of less than 25% of the aggregate principal amount of the outstanding debt securities of that series may not, on their own, declare the debt securities of that series to be due and payable immediately. Holders of debt securities of that series may exercise these rights only by providing a written demand to Turkey at the office of the fiscal agent at a time when the event of default is continuing.
Upon any declaration of acceleration, the principal, interest and all other amounts payable on the debt securities of that series will be immediately due and payable on the date Turkey receives written notice of the declaration, unless Turkey has remedied the event or events of default prior to receiving the notice. The holders of 66 2/3% or more of the aggregate principal amount of the outstanding debt securities of that series may rescind a declaration of acceleration if the event or events of default giving rise to the declaration have been cured or waived.
Amendments and Waivers
Turkey’s collective action clauses will provide that Turkey, the fiscal agent and the holders may generally modify or take actions with respect to the fiscal agency agreement or the terms of the debt securities of any series that have been designated collective action securities with:
| • | the affirmative vote, in person or (in the case of registered owners of debt securities of that series) by proxy, of the holders of not less than 66 2/3% in aggregate principal amount of the outstanding debt securities of that series that are represented at a duly called and held meeting; or | ||
| • | the written consent of the holders of 66 2/3% in aggregate principal amount of the outstanding debt securities of that series. |
However, the holders of not less than 75% in aggregate principal amount of the outstanding debt securities of that series, voting at a meeting or by written consent, must consent to any amendment, modification, change or waiver with respect to the debt securities of that series that would:
| • | change the due date for the payment of the principal of (or premium, if any), or any installment of interest on, the debt securities of that series; | ||
| • | reduce the principal amount of the debt securities of that series; | ||
| • | reduce the portion of the principal amount that is payable in the event of an acceleration of the maturity of the debt securities of that series; | ||
| • | reduce the interest rate or the premium payable upon redemption of the debt securities of that series; | ||
| • | change the currency in which any amount in respect of the debt securities of that series is payable or exclude the Borough of Manhattan, The City of New York, as a required place at which payment with respect to interest, premium or principal is payable; | ||
| • | shorten the period during which Turkey is not permitted to redeem the debt securities of that series if, prior to such action, Turkey is not permitted to do so; | ||
| • | change Turkey’s obligation to pay any additional amounts under the debt securities of that series; | ||
| • | change the definition of “outstanding” with respect to the debt securities of that series; | ||
| • | change the governing law provision of the debt securities of that series; | ||
| • | change Turkey’s appointment of an agent for the service of process in the United States or Turkey’s agreement not to claim and to waive irrevocably immunity (sovereign or otherwise) in respect of any suit, action or proceeding arising out of or relating to the fiscal agency agreement or to the debt securities of that series; |
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| • | change the status of the debt securities of that series, as described under “Debt Securities—Status of the Debt Securities” in the prospectus accompanying the prospectus supplement relating to the debt securities of that series; | ||
| • | in connection with an offer to acquire all or any portion of the debt securities of that series, amend any event of default under the debt securities of that series; or | ||
| • | reduce the proportion of the principal amount of the debt securities of that series that is required: |
| • | to modify, amend or supplement the fiscal agency agreement or the terms and conditions of the debt securities of that series; or | ||
| • | to make, take or give any request, demand, authorization, direction, notice, consent, waiver or other action. |
Turkey refers to the above subjects as “reserved matters.” A change to a reserved matter, including the payment terms of any series of debt securities that have been designated collective action securities, can be made without your consent, as long as a supermajority of the holders (that is, the holders of at least 75% in aggregate principal amount of the outstanding debt securities) agrees to the change.
If both Turkey and the fiscal agent agree, they may, without the vote or consent of any holder of debt securities of a series, modify, amend or supplement the fiscal agency agreement or the debt securities of any series for the purpose of:
| • | adding to the covenants of Turkey for the benefit of the holders of the debt securities of that series; | ||
| • | surrendering any right or power conferred upon Turkey; | ||
| • | securing the debt securities of that series pursuant to the requirements of the debt securities or otherwise; | ||
| • | curing any ambiguity or curing, correcting or supplementing any defective provision contained in the fiscal agency agreement or in the debt securities of that series; or | ||
| • | amending the fiscal agency agreement or the debt securities of that series in any manner which Turkey and the fiscal agent may determine and that is not inconsistent with and does not adversely affect the interest of any holder of debt securities of that series. |
Any modification, amendment or supplement approved in the manner described in this section shall be binding on the holders of debt securities of such series.
For purposes of determining whether the required percentage of holders of any series of debt securities that have been designated collective action securities is present at a meeting of holders for quorum purposes or has approved any amendment, modification or change to, or waiver of, such debt securities or the fiscal agency agreement, or whether the required percentage of holders has delivered a notice of acceleration, debt securities owned, directly or indirectly, by or on behalf of Turkey or any public sector instrumentality of Turkey will be disregarded and deemed not to be “outstanding”, except that in determining whether the fiscal agent shall be protected in relying upon any amendment, modification, change or waiver, or any notice from holders, only debt securities of that series that the fiscal agent knows to be so owned shall be so disregarded. As used in this paragraph, “public sector instrumentality” means the Central Bank of the Republic of Turkey, any department, ministry or agency of the federal government of Turkey or any corporation, trust, financial institution or other entity owned or controlled by the federal government of Turkey or any of the foregoing, and “control” means the power, directly or indirectly, through the ownership of voting securities or other ownership interests, to direct the management of or
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elect or appoint a majority of the board of directors or other persons performing similar functions in lieu of, or in addition to, the board of directors of a corporation, trust, financial institution or other entity.
Except as specifically set forth herein, the terms (including notice, quorum and other meeting and consent provisions) applicable to other series of debt securities issued by Turkey remain unchanged with respect to collective action securities.
Further Issues of Debt Securities of a Series
Turkey’s collective action clauses will provide that from time to time, without the consent of holders of any series of debt securities that have been designated collective action securities, and subject to the required approvals under Turkish law, Turkey may create and issue additional debt securities with the same terms and conditions as those of the debt securities of that series (or the same except for the amount of the first interest payment and the issue price), provided that such additional debt securities do not have, for purposes of U.S. federal income taxation (regardless of whether any holders of such debt securities are subject to the U.S. federal tax laws), a greater amount of original issue discount than the debt securities of that series have as of the date of issuance of such additional debt securities. Turkey may also consolidate the additional debt securities to form a single series with the outstanding debt securities of that series.
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