Login Get Started
HelpDesk
 Embed  Download
  of  

or
Sign in to continue reading...

TF Varlik Kiralama IMTN Sukuk (Turkiye Finans Katilim Bankasi) RM3 Billion - Principal Terms and Conditions

IM Insights
By IM Insights
6 years ago
TF Varlik Kiralama IMTN Sukuk (Turkiye Finans Katilim Bankasi) RM3 Billion - Principal Terms and ConditionsMurabahah, Shariah, Shariah compliant, Sukuk, Tawarruq, Participation, Provision, Suq al-Sila’

Organisation Tags (7)


Create FREE account or Login to add your comment
Comments (0)


Transcription

  1. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 2.01 BACKGROUND INFORMATION (a) Issuer (i) Name : TF Varlik Kiralama A. Ş. (“TF Varlik” or the “Issuer”) (ii) Address : Registered Office Yakacik Mevki Adnan Kahveci Cad. No.139 Kartal Istanbul Turkey Principal Place of Business Yakacik Mevki Adnan Kahveci Cad. No.139 Kartal Istanbul Turkey (iii) Business registration number (iv) Date and incorporation (v) Date of applicable (vi) Status on residence, i.e. : Non-resident controlled company whether it is a resident controlled company or nonresident controlled company place listing, (vii) Principal activities : 854563 of : 11 February 2013 / Turkey where : Not listed : The Issuer has been incorporated to issue sukuk and enter into any transaction incidental or ancillary thereto in connection to such sukuk. In compliance with its purpose, the principal activities of the Issuer include the following: 1) acquiring all kinds of assets and rights from the Obligor (as defined in paragraph 2.01(b)(i) below) and/or any third parties and leasing these to the Obligor and/or third parties; SC APPROVED PTC 1
  2. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 2) raising financing for the purchase of assets or rights by the Issuer; 3) undertaking various transactions in connection with the issuance of sukuk pursuant to the regulations and decisions of the Capital Markets Board of Turkey. (viii) Board of directors The board of(a) directors : of TF Varlik as at 15 February 2014 are as follows: 1. Abdül Latif ÖZKAYNAK 2. Ali GÜNEY 3. Alpaslan ÖZEN *Note: With effect from 28 April 2014, Mr. Dursun Arslan has been appointed as the new board member. (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders The structure (b) of shareholdings : and names of substantial shareholders as at 15 February 2014 are as follows: Direct Interest Name of Substantial Shareholders (x) Authorised, issued and paidup capital (xi) Disclosure on the following  If the Issuer or its board No. of shares held % Türkiye Katılım A.Ş. Finans 50,000 Bankası 100 TOTAL 50,000 100 Authorised, issued (c) and : paid-up capital as at 15 February 2014: Authorised capital: Turkish Lira 50,000 comprising 50,000 shares of Turkish Lira 1 each Issued and paid-up capital: Turkish Lira 50,000 comprising 50,000 shares of Turkish Lira 1 each (d) : None. members have been convicted or charged with any offence under the securities laws, corporation SC APPROVED PTC 2
  3. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and  If the Issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application. None. SC APPROVED PTC 3
  4. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (b) Obligor (i) Name : Türkiye Finans Katilim Bankasi A. Ş. (“Türkiye Finans” or the “Obligor”). (ii) Address : Registered Address Yakacik Mevkii Adnan Kahveci Cad. No. 139 Kartal Istanbul Turkey Principal Place of Business Yakacik Mevki Adnan Kahveci Cad. No.139 Kartal Istanbul Turkey (iii) Business number registration : 401492. (iv) Date and place incorporation (v) Date of listing, where : Not listed. applicable (vi) Status on residence, i.e. : Non-resident controlled company. whether it is a resident controlled company or non-resident controlled company (vii) Principal activities of : 24 August 1998 / Turkey. : The principal activity of undertaking banking compliance with the interest-free banking, participation banking in includes: the Obligor is business in principles of known as Turkey which (i) consumer banking involving deposit taking, the granting of financings, credit card facilities, banking services and fund transfer facilities; SC APPROVED PTC 4
  5. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (ii) corporate banking involving providing services to corporate client base of the Obligor including granting cash financings, non-loan products, other credit facilities and banking services; and (iii) treasury involving providing a diverse range of treasury products and services, including money market and foreign exchange services to its customers. (viii) Board of directors The board of(e) directors : of Türkiye Finans as at 15 February 2014 are as follows: (i) Mustafa BOYDAK (ii) Saeed Mohammed A. ALGHAMDI (iii) Mehmet Atila KURAMA (iv) Oğuz KAYHAN (v) Khalid Malik ALSHARIF (vi) Brian Keith Belcher* (vii) V. Derya GÜRERK *Note: With effect from 11 March 2014, Mr. Brian Keith Belcher has resigned as director of Türkiye Finans; and Ms. Lama Ahmad M Ghazzaoui has been appointed as the new board member. *Note: With effect from 28 March 2014, Mr. Mehmet Atila Kurama has resigned as director of Türkiye Finans; and Mr. Halil Cem Karakas has been appointed as the new board member. (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders The structure (f) of :shareholdings and names of substantial shareholders as at 15 February 2014 are as follows: Name of Substantial Shareholders Direct Interest No. of shares held % NATIONAL 1,176,369,401 COMMERCIAL BANK JSC 66.2743 BOYDAK GRUBU 392,123,148 22.0914 GÖZDE A.Ş. 205,405,382 11.5721 1,102,069 0.0621 OTHERS SC APPROVED PTC 5
  6. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 1,775,000,000 *100.000 TOTAL *This percentage is rounded up to the nearest decimal place. (x) Authorised, issued and paid-up capital (xi) Disclosure on the following  If the Obligor or its board members have been convicted or charged with any offence under the securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and  If the Obligor has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application. Authorised, issued (g) :and paid-up capital as at 15 February 2014: Authorised capital: Turkish Lira 1,775,000,000 comprising 1,775,000,000 shares of Turkish Lira 1 each. Issued and paid-up capital: Turkish Lira 1,775,000,000 comprising 1,775,000,000 shares of Turkish Lira 1 each. (h) : None. None. SC APPROVED PTC 6
  7. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 2.02 PRINCIPAL TERMS AND CONDITIONS (a) Names of parties involved in the proposal, where applicable (i) Principal advisers HSBC Amanah (i) : Malaysia Berhad (Company No.807705-X) (“HSBC”) and Standard Chartered Saadiq Berhad (Company No. 823437-K) (“SCSB”) as the Joint Principal Advisers (“JPAs”). (ii) Joint lead arrangers HSBC and (j)SCSB as the Joint Lead Arrangers (“JLAs”). (iii) Co-arranger Not applicable. (k) (iv) Solicitors Legal Counsel (l) to the JPAs/JLAs in relation to Malaysian Law Messrs. Adnan Sundra & Low (“ASL”). Legal Counsel to the Issuer in relation to Malaysian Law Messrs. Zaid Ibrahim & Co. (“ZICO”). Legal Counsel to the Issuer in relation to Turkish Law Paksoy Law Office. (v) Financial (m) adviser Not applicable. (n) (vi) Technical adviser Not applicable. (o) (vii) Sukuk trustee Malaysian Trustees (p) Berhad. (viii) Shariah advisers HSBC and(q) SCSB Advisers”). (ix) Guarantor Not applicable. (r) (x) Valuer Not applicable. (s) (xi) Facility agent SCSB. (xii) Primary subscriber (under a bought-deal To be determined (u) prior to the issuance in respect of issuance via bought deal (“Joint Shariah (t) SC APPROVED PTC 7
  8. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE arrangement) and amount subscribed basis only. Not applicable for issuance via private placement and book building. (xiii) Underwriter and amount underwritten Not applicable. (v) (xiv) Central depository Bank Negara (w)Malaysia (“BNM”). (xv) Paying agent BNM. (xvi) Reporting accountant KPMG, Turkey (y) (“KPMG”). (x) (xvii) Calculation agent Not applicable. (z) (xviii) Others (please specify) Joint Lead (aa) Managers (“JLMs”) for the : first issue HSBC and SCSB. Lead Manager/JLMs for any subsequent issue(s) Any party or parties as may be appointed by the Issuer from time to time. (b) Islamic principles used Murabahah (bb) (via Tawarruq : arrangement) The Sukuk Murabahah (as defined in paragraph 2.02(c) below) shall be based on the Shariah principle of Murabahah (via Tawarruq arrangement) which is one of the Shariah principles and concepts approved by the Securities Commission’s (“SC”) Shariah Advisory Council (“SAC”). (c) Facility description An Islamic (cc) medium: term note (“Sukuk Murabahah”) programme with a programme limit of RM3.0 billion in aggregate nominal value (“Sukuk Murabahah Programme”). The issuance of each series of the Sukuk Murabahah from time to time under the Sukuk Murabahah Programme shall be effected as follows: SC APPROVED PTC 8
  9. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 1. (a) The Sukuk Trustee (on behalf of the holders of the Sukuk Murabahah (“Sukukholders”)) and TF Varlik shall enter into a Service Agency Agreement, pursuant to which TF Varlik (in such capacity, the “Primary Purchasing Agent”) is appointed as the agent of the Sukukholders for the purchase and sale of Shariah-compliant commodities which would exclude ribawi items in the category of medium of exchange such as currency, gold and silver which are provided through the commodity trading platform, Bursa Suq Al-Sila’ (“Commodities”). (b) The Primary Purchasing Agent will then enter into a Facility Agency Agreement to appoint the Facility Agent as the subagent (in such capacity, the “Secondary Purchasing Agent”) for the purchase and sale of Commodities under the Sukuk Murabahah Programme. 2. TF Varlik (in its capacity as the Primary Purchasing Agent), Türkiye Finans Katilim Bankasi A.S. (in its capacity as the purchaser for itself) and the Secondary Purchasing Agent will enter into a Commodity Murabahah Master Agreement which will document the sale and purchase of the Commodities under the Shariah principles of Murabahah. Pursuant to the Commodity Murabahah Master Agreement, prior to the date on which the relevant series of Sukuk Murabahah is issued, Türkiye Finans Katilim Bankasi A.S. (the “Obligor”) (acting as the purchaser for itself) shall issue a purchase order (the “Purchase Order”) in relation to SC APPROVED PTC 9
  10. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the said series to the Primary Purchasing Agent and the Secondary Purchasing Agent. In the Purchase Order, the Obligor (acting as the purchaser for itself) will request the Primary Purchasing Agent and the Secondary Purchasing Agent to purchase the Commodities and will irrevocably undertake to purchase the Commodities from the Sukukholders via the Secondary Purchasing Agent at a deferred sale price (“Deferred Sale Price”) which shall be the Purchase Price (as defined in paragraph 2.02(c)(3)(a) below) plus the profit margin. 3. (a) Based on the Purchase Order, the Secondary Purchasing Agent (pursuant to the CTP Purchase Agreement entered into between the Secondary Purchasing Agent and the Commodity Trading Participant (“CTP”) for the said series), will purchase on a spot basis the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila’ commodity market (through a CTP) at a purchase price (“Purchase Price”) which shall be an amount equivalent to the Sukuk Murabahah proceeds. (b) The Commodities shall pass from the commodity vendor(s) to the CTP, held for the benefit of the Sukukholders. 4. (a) TF Varlik (acting as the Issuer) shall issue Sukuk Murabahah to the Sukukholders whereby the proceeds shall be used to pay for the Purchase Price of the Commodities. The Sukuk Murabahah shall evidence, amongst others, the Sukukholders’ ownership of the Commodities and subsequently, SC APPROVED PTC 10
  11. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE once the Commodities are sold to the Obligor (acting as the purchaser), the entitlement to receive the Deferred Sale Price. (b) The proceeds shall be used to pay for the Purchase Price of the Commodities. 5. Thereafter, pursuant to the undertaking under the Purchase Order, the Secondary Purchasing Agent (acting on behalf of the Primary Purchasing Agent) shall sell the Commodities to the Obligor (acting as the purchaser) at the Deferred Sale Price under a commodities sale agreement (the “Commodities Sale Agreement”). 6. Subsequently thereafter, the Obligor (pursuant to the CTP Sale Agreement entered into between itself (acting as purchaser) and the CTP) shall sell the Commodities to Bursa Malaysia Islamic Services Sdn. Bhd. (“BMIS”) (through the CTP) on a spot basis for an amount equal to the Purchase Price. The CTP Sale Agreement will provide for the CTP to directly sell the Commodities to BMIS upon notice by the Secondary Purchasing Agent that the Commodities Sale Agreement has been completed and executed. The Commodities shall pass from the CTP (acting on behalf of the Obligor as the purchaser) to BMIS. 7. During the tenor of the Sukuk Murabahah, the Obligor (as part of its obligation to pay the Deferred Sale Price) shall make periodic profit payments (“Periodic Profit Payments”), to SC APPROVED PTC 11
  12. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the Sukukholders through the Primary Purchasing Agent. Upon maturity (unless earlier redeemed) the Obligor shall pay through the Primary Purchasing Agent all amounts outstanding in respect of the Deferred Sale Price of the relevant Sukuk Murabahah upon which the relevant Sukuk Murabahah will be cancelled. Upon the declaration of an Event of Default or upon the occurrence of a Change of Control Triggering Event, the Obligor shall pay the Redemption Amount (as defined under paragraph 2.02(y)(i) below) directly to the Sukukholders upon which the relevant Sukuk Murabahah will be cancelled. Please refer to Annexure I for the structural diagram of the Sukuk Murabahah transaction. (d) Identified Assets Shariah-compliant (a) commodities approved by the Joint Shariah Advisers (excluding ribawi items in the category of medium of exchange such as currency, gold and silver) which are provided through the commodity trading platform, Bursa Suq Al-Sila’. (e) Purchase and selling price/rental (where applicable) Purchase Price (b) The Purchase Price in relation to each purchase of the Commodities shall be equal to the proceeds of the Sukuk Murabahah. The Purchase Price shall comply with the Securities Commission’s Shariah Advisory Council ("SAC") asset pricing requirements (“Asset Pricing Requirements”) as provided in the Securities Commission’s ("SC") Guidelines on Sukuk effective 8 January 2014 (as may be amended from time to time) ("Guidelines on Sukuk"). Deferred Sale Price The Deferred Sale Price shall comprise SC APPROVED PTC 12
  13. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the Purchase Price plus the aggregate Periodic Profit Payments on a deferred payment basis and will be determined prior to the sale of the Commodities to the Obligor to be evidenced by the issue of the Sukuk Murabahah. (f) Issue/sukuk programme size The aggregate (c) :nominal value of outstanding Sukuk Murabahah issued under the Sukuk Murabahah Programme shall not at any time exceed RM3.0 billion in nominal value. (g) Tenure of programme Tenure of (d)the : Sukuk Murabahah Programme The Sukuk Murabahah Programme shall have a tenure of up to twenty (20) years from the date of first issue of the Sukuk Murabahah under the Sukuk Murabahah Programme, which shall be made within two (2) years from the date of the Securities Commission’s (“SC”) authorisation or such other later date as may be approved by the SC. issue/sukuk Tenure of the Sukuk Murabahah The tenure of the Sukuk Murabahah shall be more than one (1) year and up to twenty (20) years as the Issuer may select, provided always that the Sukuk Murabahah mature prior to the expiry of the Sukuk Murabahah Programme. (h) Availability period of sukuk programme The Sukuk Murabahah (e) : Programme shall be available commencing on the date of fulfilment of the conditions precedent set out in the programme agreement and ending on the close of business in Kuala Lumpur on the date falling twenty (20) years from the date the first Sukuk Murabahah is issued. (i) Profit/coupon/rental rate The profit rate (f) shall: be determined and agreed prior to each issuance of the Sukuk Murabahah. (j) Profit/coupon/rental frequency The frequency (g) of : the Periodic Profit Payment for the Sukuk Murabahah shall be on a semi-annual or quarterly basis payment SC APPROVED PTC 13
  14. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE or such other period to be agreed between the Issuer and the JLMs prior to each issuance of the Sukuk Murabahah. (k) Profit/coupon/rental basis (l) Security/collateral, applicable payment where on utilisation of (m) Details proceeds by issuer/obligor and originator (in the case of ABS). If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable The Periodic (h)Profit: Payments shall be calculated based on the actual number of days elapsed and 365 days basis (actual/365 days), and in any event, in accordance with the MyClear Rules and Procedures (as defined in paragraph 2.02(p) below). None. (i) : Issuer’s utilisation (j) : The proceeds raised from the issuance of the Sukuk Murabahah under the Sukuk Murabahah Programme shall be utilised for the Issuer to pay the Purchase Price of the Commodities. Obligor’s utilisation The proceeds from the sale of the Commodities under the CTP Sale Agreement shall be utilised by the Obligor for its general corporate and funding purposes provided always that any such utilisation shall be in compliance with the Shariah principles. (n) Sinking fund and designated accounts, where applicable (o) Rating:  Credit ratings assigned : The Sukuk Murabahah Programme has and whether the rating is been accorded an indicative long term final or indicative. In the rating of AA3. case of a sukuk programme where the credit rating is not assigned for the full amount, disclosures set out in paragraph 9.04 of these guidelines must be made. None. (k) : SC APPROVED PTC 14
  15. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE  (p) Name of agencies credit rating : RAM Rating Services Berhad. Mode of issue The Sukuk (l) Murabahah : may be issued via book building or private placement or on bought deal basis, as the Issuer may elect. Issuance of the Sukuk Murabahah under the Sukuk Murabahah Programme shall be in accordance with: (i) the “Participation and Operation Rules for Payments and Securities Services” issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”) (“MyClear Rules”); and (ii) the “Operational Procedures for Securities Services” and “Operational Procedures for Malaysian Ringgit (MYR) Settlement in RENTAS” both issued by MyClear (“MyClear Procedures”), or their replacement thereof (collectively “MyClear Rules and MyClear Procedures”) applicable from time to time. (q) Selling restriction, including tradability, i.e. whether tradable or non-tradable At issuance (m) of the Sukuk : Murabahah The Sukuk Murabahah shall not be offered, sold, transferred or otherwise disposed, directly or indirectly other than to persons falling within any of the categories of persons or in the circumstances specified under: (a) Schedule 6 (or Section 229(1)(b)); and (b) Schedule 7 (or Section 230(1)(b)),read together with Schedule 9 (or Section 257(3)) of the Capital Markets and Services Act, 2007 of Malaysia as amended from time to time (“CMSA”). Thereafter The Sukuk Murabahah may only be offered, sold, transferred or otherwise SC APPROVED PTC 15
  16. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE disposed directly or indirectly to persons to whom an offer or invitation to purchase the Sukuk Murabahah would fall within Schedule 6 (or Section 229(1)(b)) read together with Schedule 9 (or Section 257(3)) of the CMSA as amended from time to time. Tradability Subject to the selling restriction, the Sukuk Murabahah shall be tradable in the secondary market on a willing-buyer willing-seller basis under the scripless book-entry securities settlement and funds transfer system known as the Real Time Electronic Transfer of Funds and Securities System (“RENTAS”). (r) Listing status and types of listing, where applicable The Sukuk Murabahah (a) : will not be listed on any exchange. (s) Other regulatory approvals required in relation to the issue, offer or invitation to subscribe or purchase sukuk and whether or not obtained The Issuer(b)has :obtained (i) BNM’s approval on the Sukuk Murabahah Programme via BNM’s letter dated 18 November 2013; and (ii) the Capital Market Board of Turkey’s approval on 7 February 2014 for the establishment of the Sukuk Murabahah Programme and issuances of the Sukuk Murabahah thereunder. (t) Conditions precedent The conditions (c) :precedent for the establishment of the Sukuk Murabahah Programme shall include but not be limited to the following, unless waived by the JLAs, (all have to be in form and substance reasonably acceptable to the JLAs): (A) Main Documentation (i) the Transaction Documents (as defined in paragraph 2.02(y)(viii) below) shall have been duly executed by the parties thereto and stamped (or if exempted, duly endorsed as exempted from stamp duty) and where SC APPROVED PTC 16
  17. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE relevant, registered at the relevant registry; (B) Issuer (i) A certificate signed by a duly authorised officer of the Issuer that there is: (a) no event rendering untrue or incorrect to a material extent any of the representations and warranties; (b) no material breach of any of the undertakings by the Issuer; and (c) no Event of Default or an event, which with the giving of notice or passage of time or both, would be an Event of Default, would have occurred and is continuing under the Transaction Documents; (ii) Certified true copies (and English translations) of the most recent Certificate of Activity (Faaliyet Belgesi), and the current/most up-todate constitutional documents of the Issuer; (iii) Certified true extracts (and English translations) of board resolutions of the Issuer authorising, among others, the execution of the relevant Transaction Documents; and (iv) A list of the Issuer’s notarized authorised signatories and their respective specimen signatures; and (C) Obligor SC APPROVED PTC 17
  18. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (i) (D) A certificate signed by a duly authorised officer of the Obligor that there is: (a) no event rendering untrue or incorrect to a material extent any of the representations and warranties; (b) no material breach of any of the undertakings by the Obligor; and (c) no Event of Default or an event, which with the giving of notice or passage of time or both, would be an Event of Default, would have occurred and is continuing under the Transaction Documents (as defined in paragraph 2.02(y)(viii) below); (ii) Certified true copies (and English translations) of the most recent Certificate of Activity (Faaliyet Belgesi), and the current/most up-todate constitutional documents of the Obligor; (iii) Certified true extracts (and English translations) of board resolutions of the Obligor authorising, among others, the execution of the relevant Transaction Documents; and (iv) A list of the Obligor’s notarized authorised signatories and their respective specimen signatures; and General (i) Evidence (consisting of SC APPROVED PTC 18
  19. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE certified true copies and English translations) of all required regulatory approvals, where applicable, including but not limited to the relevant approvals from the SC, BNM and Capital Market Board of Turkey, have been obtained for the establishment of the Sukuk Murabahah Programme and issuances of Sukuk Murabahah thereunder; (ii) The Sukuk Murabahah Programme shall have been accorded a minimum rating of AA3; (iii) All necessary approvals or waivers required (including but not limited to the existing lenders/ financiers of the Issuer and the Obligor) for the implementation of the Sukuk Murabahah Programme (if required) and the execution of the Transaction Documents have been obtained and compliance with all conditions of such approvals or waivers; (iv) Confirmation from the Joint Shariah Advisers that the structure and mechanism of the Sukuk Murabahah Programme and the Transaction Documents are in compliance with Shariah principles; (v) Satisfactory company and winding up search from the trade registry in respect of the Issuer and the Obligor or relevant declaration of the Issuer and the Obligor; SC APPROVED PTC 19
  20. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (vi) Completion of the legal due diligence carried out on among others, the Issuer, the Obligor and their Material Subsidiaries (as defined in paragraph 2.02(y)(ix)(11) below) (if any); (vii) Evidence that all transaction fees, costs and expenses have been or will be fully paid from the proceeds of the Sukuk Murabahah; (viii) A favourable legal opinion from ASL addressed to the JPAs/JLAs on, inter alia, the validity, legality and enforceability of the Sukuk Murabahah and the Transaction Documents and a confirmation that all conditions precedents have been fulfilled or waived, as the case may be; (ix) A favourable legal opinion from Paksoy Law Office addressed to the JLAs/JLMs in relation to the laws of the Republic of Turkey opining on the capacity and authority of the Issuer and the Obligor to enter into the Transaction Documents to which it is a party and the enforceability against the Issuer and the Obligor of any arbitration awards procured against it and to confirm the legality, validity and enforceability of the Transaction Documents from the perspective of the laws of the Republic of Turkey; SC APPROVED PTC 20
  21. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (x) A comfort letter in the form and substance acceptable to the JLAs/JLMs addressed to the Issuer, the Obligor and the JLAs/JLMs from the Reporting Accountant; and (xi) Such other conditions precedent as may be advised by ASL and are mutually agreed between the Issuer, the Obligor and the JLAs. Conditions precedent for issuance of each series of Sukuk Murabahah (i) Confirmation from the Issuer and the Obligor that all representations and warranties remain true and correct; (ii) A copy of the approval (with English translation) from the Capital Market Board of Turkey for each subsequent issuances of the Sukuk Murabahah (in Turkish: tertip ihraç belgesi); (iii) No Event of Default or Potential Event of Default (as defined in item 2.02(y)(ix) below) has occurred or is continuing; (iv) The Sukuk Murabahah Programme shall have maintained a rating of at least AA3; (v) Copies of all resolutions, authorisations and consents, if any, required by the Issuer and the Obligor in connection with the issuance of the Sukuk Murabahah having been obtained or otherwise delivered to the JLAs/JLMs; and (vi) Such other conditions customary for a transaction of this nature, as may be advised by ASL and are mutually agreed to by the Issuer, SC APPROVED PTC 21
  22. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the Obligor and the JLAs. (u) Representations and warranties ) : The representations and warranties shall include but are not limited to the following: (a) The representations and warranties applicable to the Issuer: (i) it is duly incorporated as a company under the laws of the Republic of Turkey; (ii) it has the power to own its assets and carry on its business as it is being conducted; (iii) the transactions contemplated by, and all obligations expressed to be assumed by it in, the Transaction Documents constitute its legal, valid, binding and enforceable obligations; (iv) its entry into, and the transactions contemplated by, the Transaction Documents to which it is a party, do not and will not conflict with: (a) any law or regulation applicable to it; (b) its constitutional documents; or (c) any agreement or instrument binding upon it or any of its assets; (v) it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, its obligations under the Transaction Documents to SC APPROVED PTC 22
  23. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE which it is a party; (vi) all authorisations required to enable it lawfully to enter into, exercise its rights and comply with its obligations pursuant to the Transaction Documents to which it is a party (or specified as a beneficiary) have been obtained or effected and are in full force and effect; (vii) it has not engaged in any business or activity other than those contemplated under its articles of association and it has no subsidiary and other than the Corporate Lease Transaction (as defined in paragraph 2.02(y)(ix)(4) below), it has not undertaken and will not undertake any transaction of a similar nature with the Corporate Lease Transaction; (viii) no Event of Default has occurred or is continuing; (ix) the Issuer nor to the best of the Issuer’s knowledge after having made all due and reasonable enquiries any of its Subsidiaries (if any) (subject to paragraph 2.02(w)(iii)(a)(v) below) or joint ventures, nor any of their respective directors, officers or employees nor, to the knowledge of the Issuer after having made all due and reasonable enquiries, any persons acting on any of their behalf: 1. is a Restricted Party (as defined in paragraph 2.02(y)(ix)(16) below); SC APPROVED PTC 23
  24. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE or 2. has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions (as defined in paragraph 2.02(y)(ix)(17) below) by any Sanctions Authority (as defined in paragraph 2.02(y)(ix)(17) below); (x) the information memorandum (as amended or supplemented from time to time) issued in connection with the Sukuk Murabahah (“Information Memorandum”) does not contain any statements or information which are false or misleading or from which there is a material omission and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by the Issuer; (xi) neither the Issuer nor any of its Subsidiaries (if any) (subject to paragraph 2.02(w)(iii)(a)(v) below) nor any director, officer, agent, employee or affiliate of the Issuer or any of its Subsidiaries (if any) (subject to paragraph 2.02(w)(iii)(a)(v) are currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); SC APPROVED PTC 24
  25. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (xii) neither the Issuer nor any of its Subsidiaries (as defined in paragraph 2.02(y)(ix)(20) below)(if any)(subject to paragraph 2.02(w)(iii)(a)(v) below), nor any director, officer, agent, employee or other person associated with or acting on behalf of the Issuer or any of its Subsidiaries (if any)(subject to paragraph 2.02(w)(iii)(a)(v) below), has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”); or paid any bribe, rebate, made any payoff, influence payment, kickback or other unlawful payment prohibited under any applicable law or regulation equivalent to the FCPA; (xiii) the operations of the Issuer are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements and money laundering statutes in the Republic of Turkey, and of all jurisdictions in which the Issuer conducts its business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency SC APPROVED PTC 25
  26. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (collectively, “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer with respect to Money Laundering Laws is pending and, to the best of the Issuer’s knowledge, no such actions, suits or proceedings are threatened or contemplated; (xiv) save as disclosed in the Information Memorandum, there has been no adverse change in the business or condition (financial or otherwise, prospects, results of operations or general affairs) of the Issuer since its last audited financial statements, which would have a Material Adverse Effect; (xv) such other representations and warranties customary for a transaction of this nature, as may be advised by ASL and are mutually agreed to by the Issuer. (b) The representations warranties applicable to Obligor: and the (i) Türkiye Finans is a participation bank duly established and validly existing under the laws of the Republic of Turkey and has full power and authority to perform its obligations under the Transaction Documents to which it is a party; (ii) the payment obligations of SC APPROVED PTC 26
  27. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Türkiye Finans under the relevant Transactions Documents are and will be direct, unconditional, unsubordinated, unsecured and general obligations of Türkiye Finans and at all times rank at least equally with all other unsecured and unsubordinated indebtedness of Türkiye Finans; (iii) the entering into and the performance of the Transaction Documents and the other documents required by the Issuer to be executed by Türkiye Finans in connection with the Transaction Documents (i) are within the powers of Türkiye Finans and have been duly authorised by all necessary actions; and (ii) do not contravene any applicable law, regulation, decree, order, permit or other restriction binding upon Türkiye Finans or any of the properties and assets of Türkiye Finans; its constitutional documents; or any agreement, mortgage, bond, contract or other undertaking or instrument to which Türkiye Finans is a party or which is binding upon Türkiye Finans which affects the ability of Türkiye Finans to meet its obligations under the Transaction Documents to which it is a party; (iv) Türkiye Finans has obtained all the necessary statutory, parliamentary, ministerial or other authorities’ licences, approvals, authorisations and consents for the due SC APPROVED PTC 27
  28. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE execution and delivery of the Transaction Documents to which it is a party; (v) there are no material litigation, arbitration or administrative proceedings of or before any court, arbiter, governmental authority or agency pending or insofar as Türkiye Finans is aware (or ought reasonably to have been aware) threatened against Türkiye Finans or the properties and assets of Türkiye Finans which if adversely determined would enjoin or restrain the execution or performance of the Transaction Documents to which it is a party; (vi) the relevant Transaction Documents and the other documents contemplated by the same to be executed by Türkiye Finans, will be the legal, valid and binding obligations of Türkiye Finans and are, subject to the qualifications set out in the applicable legal opinions delivered by the relevant legal counsels, enforceable in accordance with the terms and conditions herein and therein contained; (vii) under the laws of its jurisdiction of incorporation it is not necessary that the Transaction Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Transaction Documents; SC APPROVED PTC 28
  29. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (viii) the Obligor nor, to the best knowledge of the Obligor after having made all due and reasonable enquiries, any of its Subsidiaries or joint ventures, nor any of their respective directors, officers or employees nor, to the knowledge of the Obligor after having made all due and reasonable enquiries, any persons acting on any of their behalf: 1. is a Restricted Party; or 2. has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority; and (ix) the Information Memorandum does not contain any statements or information which are false or misleading or from which there is a material omission and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by the Obligor; (x) neither the Obligor nor any of its Subsidiaries nor any director, officer, agent, employee or affiliate of the Obligor or any of its Subsidiaries are currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the SC APPROVED PTC 29
  30. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Treasury (“OFAC”); (xi) neither the Obligor nor any of its Subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Obligor or any of its Subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the FCPA; or paid any bribe, rebate, made any payoff, influence payment, kickback or other unlawful payment prohibited under any applicable law or regulation equivalent to the FCPA; (xii) the operations of the Obligor are and have been conducted at all times in compliance with the Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Obligor with respect to Money Laundering Laws is pending and, to the best of the Obligor’s knowledge, no such actions, suits or proceedings are threatened or contemplated; (xiii) save as disclosed in the Information Memorandum, there has been no adverse change in the business or condition (financial or SC APPROVED PTC 30
  31. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE otherwise, prospects, results of operations or general affairs) of the Obligor since its last audited financial statements which would have a Material Adverse Effect; and (xiv) such other representations and warranties customary for a transaction of this nature, as may be advised by ASL and are mutually agreed to by the Obligor. (v) Events of default, dissolution event and enforcement event, where applicable The events (d) of default (the “Events of : Default”) to include but not limited to the following: (a) Event of Default applicable to the Issuer: (i) default is made by the Issuer in the payment of any amount due from it under the Sukuk Murabahah or Transaction Documents on the due date or, if so payable, on demand and the Issuer does not remedy such default within a period of seven (7) Business Days from its due date; or (ii) the Issuer defaults in the performance or observance of or compliance with any of its other obligations or undertakings (other than those in paragraph 2.02(v)(a)(i) above) under the Transaction Documents to which it is a party or the Sukuk Murabahah or under any of the terms and conditions of the Sukuk Murabahah and such SC APPROVED PTC 31
  32. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE default (in the opinion of the Sukuk Trustee) is not capable of remedy or (if capable of remedy (in the opinion of the Sukuk Trustee)) is not remedied within thirty (30) days after the Issuer became aware or written notice of such default shall have been given to the Issuer by the Sukuk Trustee, whichever is earlier, provided that the Sukuk Trustee shall have certified in writing to the Issuer that such event is, in its opinion, materially prejudicial to the interests of the holders of the Sukuk Murabahah; or (iii) a Türkiye Finans Event (as defined in paragraph 2.02(v)(b) below) occurs; or (iv) the Issuer repudiates any Transaction Document to which it is a party or does or causes to be done any act or thing evidencing an intention to repudiate any Transaction Document to which it is a party; or (v) at any time it is or will become unlawful or impossible for the Issuer (otherwise than as a result of its insolvency) to perform or comply with any or all of its obligations under the Transaction Documents or any of the obligations of the Issuer under the Transaction Documents are not or cease to be SC APPROVED PTC 32
  33. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE legal, valid, binding and enforceable, provided that the Sukuk Trustee shall have certified in writing to the Issuer that such event is, in its opinion, materially prejudicial to the interests of the holders of the Sukuk Murabahah; or (vi) either: (a) the Issuer becomes insolvent or is unable to pay its debts as they fall due; (b) an administrator or liquidator of the whole or substantially the whole of the undertaking, assets and revenues of the Issuer is appointed (or application for any such appointment is made); (c) the Issuer takes any action for a readjustment or deferment of any of its obligations or makes a general assignment or an arrangement or composition with or for the benefit of its financiers/creditors or declares a moratorium in respect of any of its indebtedness or any guarantee of any indebtedness given by it; or (d) the Issuer ceases or threatens to cease to carry on all or substantially the whole of its business (otherwise than for the purposes of, or pursuant to an amalgamation or restructuring whilst solvent approved by extraordinary resolution of the Sukukholders); or SC APPROVED PTC 33
  34. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (vii) an order or decree is made or an effective resolution is passed for the winding up, liquidation or dissolution of the Issuer; or (viii) where a creditors’ scheme of arrangement under Section 176 of the Malaysian Companies Act 1965 (or the equivalent legislation of Section 176 of the Malaysian Companies Act 1965 in the jurisdiction of incorporation of the Issuer) has been instituted against the Issuer; or (ix) where there is a revocation, withholding or modification of any licence, authorisation, consent or approval that impairs or prejudices the Issuer’s ability to comply with the terms and conditions of the Sukuk Murabahah or the provisions of the Transaction Documents or any other document relating to the issue, offer or invitation in respect of the Sukuk Murabahah Programme; or (x) (i) where any other indebtedness equal to or exceeding USD25,000,000 in aggregate of the Issuer becomes due and payable prior to its stated maturity, and such declaration of indebtedness being due SC APPROVED PTC 34
  35. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE or payable is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within thirty (30) days from the date of such declaration, or (ii) any guarantee or similar obligations for any other indebtedness equal to or exceeding USD25,000,000 in aggregate of the Issuer is not discharged at maturity or when called and such call on the guarantee is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within thirty (30) days from the date of such call, or (iii) the Issuer goes into default under, or commits a breach of, any agreement or instrument relating to such indebtedness, guarantee or other obligations for any other indebtedness equal to or exceeding USD25,000,000 in aggregate, or any security created to secure such indebtedness becomes enforceable; (xi) any event occurs which under the laws of the Republic of Turkey has an analogous effect to any of the events referred to in paragraph (vi) and (vii) above; or (xii) a change of the constitutional documents of the Issuer in a manner inconsistent with the SC APPROVED PTC 35
  36. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Transaction Documents, save and except where such addition, deletion, variation or amendment is required by any law, regulation or requirement of any regulatory authority and which does not have a Material Adverse Effect; or (xiii) any representation, warranty or statement which is made (or acknowledged in writing to have been made) or given by the Issuer under the Transaction Documents or which is contained in any certificate, document, notice or statement furnished at any time pursuant to the terms of the Transaction Documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given, or if repeated at any time with reference to the facts and circumstances subsisting at such time, would not be accurate and where such event would have a Material Adverse Effect, and in the case of a failure which in the reasonable opinion of the Sukuk Trustee is capable of being remedied, the Issuer does not remedy the failure within 30 days after the Issuer has become aware of such misrepresentation or has been notified by the SC APPROVED PTC 36
  37. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Sukuk Trustee in writing of such misrepresentation; or (b) (xiv) a distress, execution, sequestration or other process is levied or enforced upon or sued out against any of the substantial undertakings, assets, rights or revenues of the Issuer and is not discharged within thirty (30) days after being levied, enforced or sued out; or (xv) a receiver has been appointed over the whole or a substantial part of the assets of the Issuer; or (xvi) such other events of default as may be advised by ASL and to be mutually agreed by the Issuer. Events of Default applicable to the Obligor (any one of the following shall be referred to as the “Türkiye Finans Event”): (i) default is made by Türkiye Finans in the payment of any amount due from it under Transaction Documents on the due date or, if so payable, on demand and Türkiye Finans does not remedy such default within a period of seven (7) Business Days from its due date; or (ii) Türkiye Finans acting any capacity, defaults the performance observance of in in or or SC APPROVED PTC 37
  38. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE compliance with any of its other obligations or undertakings (other than those in paragraph 2.02(b)(i) above) in relation to the Sukuk Murabahah under the Transaction Documents to which it is a party and such default is not remedied within thirty (30) days after Turkiye Finans and/or its Material Subsidiaries became aware or written notice of such default shall have been given to Türkiye Finans and/or its Material Subsidiaries by the Trustee (except where such default is, in the opinion of the Trustee, based on information received by the Trustee (as applicable) from Turkiye Finans and/or the Issuer (as applicable), not capable of remedy in which case no such notice of default shall be required), whichever is earlier; or (iii) any Financial Indebtedness of Türkiye Finans or any of its Material Subsidiaries is not paid when due or, as the case may be, within any originally applicable grace period; or (ii) any such Financial Indebtedness of Türkiye Finans becomes due and payable prior to its stated maturity otherwise than at the option of Turkiye Finans or (as the case may be) any of its Material Subsidiaries or SC APPROVED PTC 38
  39. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (provided that no event of default (howsoever described) has occurred) any person entitled to such Financial Indebtedness; or (iii) Türkiye Finans or any of its Material Subsidiaries fails to pay when due any amount payable by it under any guarantee of any Financial Indebtedness, provided that the amount of the relevant Financial Indebtedness referred to in sub-paragraphs (i) and/or (ii) above and/or the Financial Indebtedness guaranteed by the guarantee referred to in sub-paragraph (iii) above, individually exceeds USD10,000,000 (or its equivalent in any other currency or currencies); or (iv) Türkiye Finans is unable or admits inability to pay its debts as they fall due, suspends making payments on all or a substantial part of its debts or calls a meeting with one or more of its creditors to consider a proposal for rescheduling all or a substantial part of its indebtedness; (ii) the value of the assets of Türkiye Finans is less than its liabilities (taking into account contingent and prospective liabilities); or (iii) a moratorium is declared in respect of any indebtedness of Türkiye SC APPROVED PTC 39
  40. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Finans; or (v) any corporate action, legal proceedings or other procedure or step is taken in relation to: (i) save for the voluntary winding-up of Material Subsidiaries which are dormant or inactive, the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise), concordat or bankruptcy of Türkiye Finans and/or its Material Subsidiaries; (ii) a composition, compromise, assignment or arrangement with or for the benefits of any creditor of Türkiye Finans and/or its Material Subsidiaries; (iii) the appointment of a liquidator, receiver, administrative receiver, administrator, SC APPROVED PTC 40
  41. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE compulsory manager or other similar officer in respect of Türkiye Finans and/or its Material Subsidiaries or the whole or a substantial part of its respective assets; (iv) enforcement of any Security Interest over any assets of Türkiye Finans and/or its Material Subsidiaries (where the aggregate value of such assets is in excess of USD10,000,000 or its equivalent in another currency or currencies), or (v) any analogous procedure or step is taken in any jurisdiction; or (vi) it is or will become unlawful for Türkiye Finans to perform or comply with any of its obligations under the Transaction Documents which have or would have a Material Adverse Effect; or (vii) Türkiye Finans repudiates any of the Transaction Documents or declares an intention to repudiate any of the Transaction Documents; or SC APPROVED PTC 41
  42. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (viii) any process of expropriation,attachment , sequestration, distress or execution is taken in respect of any asset or assets of Turkiye Finans if the aggregated value of such asset or assets is in excess of USD10,000,000 (or its equivalent in another currency or currencies) and is not, if contested in good faith by Turkiye Finans, discharged or dismissed within 30 days of any of the same affecting such asset or assets; or (ix) save for the voluntary winding-up of Material Subsidiaries which are dormant or inactive, an order is made or an effective resolution passed for the windingup, liquidation or dissolution of Türkiye Finans and/or its Material Subsidiaries, or Türkiye Finans ceases or threatens to cease to carry on all or substantially all of its business or operations, or enters into any amalgamation, demerger or merger, in each case except for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or demerger or consolidation on terms approved by an extraordinary resolution of the Sukukholders; or the banking licence of (x) SC APPROVED PTC 42
  43. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Türkiye Finans is revoked, suspended or withdrawn; or (xi) Türkiye Finans fails to comply with or pay within fifteen (15) Business Days any sum due from it under any final judgment or any final order made or given by a court of competent jurisdiction; or (xii) any action, condition or thing (including the obtaining or effecting of any necessary consent, approval, authorisation, exemption, filing, licence, order, recording or registration) at any time required to be taken, fulfilled or done in order to enable Türkiye Finans lawfully to exercise its rights and perform and comply with its obligations under or in respect to the Transaction Documents is not taken, fulfilled or done; or (xiii) all or any substantial part of the undertaking, assets and revenues of Türkiye Finans are expropriated, nationalised, compulsorily acquired by or under the authority of any governmental body or Türkiye Finans ceases to be able or entitled to exercise its rights of control or ownership of the same, which have or would have a Material Adverse Effect; or SC APPROVED PTC 43
  44. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (xiv) a change of the constitutional documents of Turkiye Finans in a manner inconsistent with the Transaction Documents, save and except where such addition, deletion, variation or amendment is required by any law, regulation or requirement of any regulatory authority, and which does not have a Material Adverse Effect; or (xv) any representation, warranty or statement which is made (or acknowledged in writing to have been made) or given by Turkiye Finans under the Transaction Documents or which is contained in any certificate, document, notice or statement furnished at any time pursuant to the terms of the Transaction Documents proves to have been incorrect or misleading in a material respect on or as of the date made or given or deemed made or given, or if repeated at any time with reference to the facts and circumstances subsisting at such time, would not be accurate; or such other event of defaults as may be advised by ASL and to be mutually agreed by the Issuer and the Obligor. Upon the occurrence of an Event of Default, the Sukuk Trustee may, at its sole and absolute discretion, and shall, if so directed by an extraordinary resolution of the Sukukholders, declare SC APPROVED PTC 44
  45. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (by giving notice in writing to the Issuer and the Obligor) that an Event of Default has occurred and that all amounts under the Sukuk Murabahah then outstanding be immediately due and payable, whereupon they shall become immediately due and payable, and that the Sukuk Trustee is entitled to enforce its rights under the Transaction Documents. Any dispute arising out of or in connection with any of the Sukuk Murabahah shall be decided by arbitration in accordance with the Rules for Arbitration of Singapore International Arbitration Centre and not by way of litigation in the Malaysian courts. (w) Covenants (i) Information Covenants : The Issuer and the Obligor shall comply with all such applicable information covenants as may be agreed upon, including but not limited to the following: (i) deliver to the Sukuk Trustee as soon as they become available (and in any event within one hundred and eighty (180) days of the end of each financial year) its consolidated audited financial statements in English and within one hundred and twenty (120) days of the expiration of each half year period its consolidated unaudited financial statements for that period, which financial statements have been prepared on a basis consistently applied in accordance with approved accounting standards and principles and those financial statements shall give a true and fair view of the results of their operations for the period to which the financial statements are made up and shall disclose or provide against all liabilities (actual or contingent) of the Issuer and the Obligor respectively; SC APPROVED PTC 45
  46. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (ii) deliver to the Sukuk Trustee any information which the Sukuk Trustee may reasonably require in order to discharge its duties and obligations under the applicable Transaction Documents relating to the Issuer’s or the Obligor’s affairs to the extent permitted by law; (iii) deliver to the Sukuk Trustee any other accounts, report, notice, statement or circular issued to shareholders which the Sukuk Trustee shall at its discretion circulate the accounts, report, notice, statement or circular to the registered Sukukholders who fall within Schedules 6 and 7 of the CMSA; (iv) the Issuer and the Obligor shall deliver to the Sukuk Trustee at least annually a certificate that it has complied with its obligations under the Transaction Documents (to which it is a party) and the terms and conditions of the Sukuk Murabahah Programme and that there did not exist or had not existed, from the date the Sukuk Murabahah was first issued or date of the previous certificate as the case may be, any Event of Default or enforcement or Change of Control Triggering Event, where applicable and if such is not the case, to specify the same; (v) the Issuer and/or the Obligor shall promptly give notice to the Sukukholders of any unconditional payment to the Trustee and/or the Facility Agent of any sum due in respect of the Sukuk Murabahah made after the due date for such payment; SC APPROVED PTC 46
  47. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (vi) the Issuer and/or the Obligor shall immediately inform the Sukuk Trustee in the event that anyone of them becomes aware of the following: (a) any Event of Default or the happening of any event that has caused or could cause, one or more of the following: (b) (i) any amount secured or payable under the Sukuk Murabahah to become immediately payable; (ii) the Sukuk Murabahah to become immediately enforceable; or (iii) any other right or remedy under the terms, provisions and covenants of the Transaction Documents have become immediately enforceable; (c) any circumstance that has occurred that would materially prejudice the Issuer and/or the Obligor; (d) any substantial change in the nature of the business of the Issuer and/or the Obligor; (e) any change in the withholding tax position SC APPROVED PTC 47
  48. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE or taxing jurisdiction of the Issuer and/or the Obligor; (f) any change in the utilisation of proceeds of the Sukuk Murabahah; (g) any occurrence of a Change of Control Triggering Event (as defined in paragraph 2.02(y)(ix)(3) below); (h) any other matter that may materially prejudice the interests of the Sukukholders; such other information covenants as may be advised by ASL and are mutually agreed to by the Issuer and the Obligor. (ii) Positive Covenants : The positive covenants are, including but not limited to the following: (i) the Issuer and the Obligor shall comply with, and perform and observe all of, the provisions of the Transaction Documents which are expressed to be binding on each of them; (ii) the Issuer shall redeem in full all outstanding Sukuk Murabahah in accordance with the terms and conditions of the Transaction Documents (including but not limited to redeeming the Sukuk Murabahah on the relevant Maturity Date(s) or any other date on which the Sukuk Murabahah are due and payable); (iii) the Issuer and the Obligor shall obtain, comply with the terms of and do all that is necessary to SC APPROVED PTC 48
  49. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE maintain in full force and effect all authorisations, approvals, licenses and consents required in or by the laws and regulations of the Republic of Turkey to enable it lawfully to enter into and perform their respective obligations under the Transaction Documents or to ensure the legality, validity, enforceability or admissibility in evidence in the Republic of Turkey of the Transaction Documents including, without limitation, if required, the registration of the Transaction Documents; (iv) the Obligor shall fulfil its payment obligations of the Deferred Sale Price to meet the principal and profit payments or any amount falling due under the Commodity Murabahah Master Agreement and the Sukuk Murabahah (including but not limited to redeeming the Sukuk Murabahah on the relevant Maturity Date(s) or any other date on which the Sukuk Murabahah are due and payable); (v) the Issuer and the Obligor shall exercise reasonable diligence in carrying out their business in a proper and efficient manner which should ensure, among others, that all necessary approvals or relevant licenses are obtained; (vi) the Issuer shall at all times maintain a paying agent in Malaysia, and the Issuer shall cause and procure such paying agent to notify the Sukuk Trustee (through a facility agent) in the event the paying agent does not receive payment from the Issuer on the due dates as required under the Sukuk Murabahah; (vii) the Issuer and the Obligor shall SC APPROVED PTC 49
  50. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE promptly comply with all applicable laws in relation to the Transaction Documents (to which it is a party) including the provisions of the CMSA and/or the notes, circulars, conditions or guidelines issued by SC from time to time; (viii) the Issuer and the Obligor shall exercise reasonable diligence in carrying out their businesses in a proper and efficient manner which should ensure, amongst other that, all necessary approvals or relevant licenses are obtained and maintained, and they shall respectively take all necessary action to maintain, obtain and promptly renew, and do or cause to be done all things reasonably necessary to ensure the continuance of, all consents, permissions, licences, approvals and authorisations, and make or cause to be made all registrations, recordings and filings, which may at any time be required to be obtained or made in the Republic of Turkey (including, for the avoidance of doubt, with the Capital Markets Board of Turkey (“CMB”) and the Banking Regulations and Supervision Agency of Turkey (“BRSA”)) for (i) the execution, delivery or performance of the Transaction Documents or for the validity or enforceability thereof, or (ii) the conduct by them of the Permitted Business (as defined in paragraph 2.02(y)(ix)(12) below), save for any consents, permissions, licences, approvals, authorisations, registrations, recordings and filings (collectively, "Permissions") which are immaterial in the conduct by the Issuer and/or the Obligor of the Permitted Business. For the avoidance of doubt, any SC APPROVED PTC 50
  51. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Permissions relating to the Obligor’s ability or capacity to undertake its banking or financial advisory functions shall not be deemed to be immaterial in the conduct by the Obligor of its Permitted Business; (ix) so far as permitted by applicable law, the Issuer and/or the Obligor shall do such further acts and things and execute such further documents as may be necessary in the opinion of the Trustee to give effect to the Transaction Documents; (x) the Issuer and the Obligor shall at all times keep proper books of account in relation to their respective obligations under the Sukuk Murabahah and the Transaction Documents to which any of them is a party and, at any time so far as permitted by applicable law, allow the Sukuk Trustee and anyone appointed by it to whom the Obligor has no reasonable objection, access to such books of account at all reasonable times during normal business hours; (xi) the Issuer and the Obligor shall utilise the issue proceeds from the Sukuk Murabahah for the purpose as represented herein and in the Information Memorandum, which shall be Shariah compliant; (xii) the Issuer and the Obligor shall ensure that the terms in any of the applicable Transaction Documents (to which any of them is a party) do not contain any matter which is inconsistent with the provisions of the Information Memorandum; (xiii) if payments to Sukukholders by the Issuer shall become subject SC APPROVED PTC 51
  52. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE generally to the taxing jurisdiction of any territory or any political sub-division or any authority therein or thereof having power to tax other than or in addition to the Republic of Turkey or any such political sub-division or any such authority therein or thereof, it shall, promptly upon becoming aware thereof, notify the Sukuk Trustee of such event and (unless the Sukuk Trustee otherwise agrees) enter promptly into any supplemental documents, giving to the Sukuk Trustee an undertaking or covenant in form and manner satisfactory to the Sukuk Trustee; (xiv) in the event that the Issuer fails to comply with any obligations to pay additional amounts in respect of its tax obligations, the Obligor will unconditionally and irrevocably (irrespective of the payment of any fee), as a continuing obligation, pay to the Sukuk Trustee (for the benefit of the Sukukholders) an amount equal to the Liability (as defined in paragraph 2.02(y)(ix)(9) below) of the Issuer in respect of any and all additional amounts required to be paid by it in respect of the Sukuk Murabahah pursuant to those provisions provided that every payment of additional amounts made to or to the account of the Facility Agent shall be in satisfaction pro tanto of the covenant by the Obligor under this paragraph 2.02(w)(ii)(xiv), except to the extent that there is default in the subsequent payment thereof in accordance with the conditions to the Sukukholders; (xv) the Issuer shall without delay send a copy to the Obligor and the Sukuk Trustee of:- SC APPROVED PTC 52
  53. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE a) every notice, certificate, opinion, document, information or communication received by it pursuant to the terms of any Transaction Documents; and b) every notice, certificate, opinion, document, information or communication given by it pursuant to the terms of any Transaction Documents; (xvi) the Issuer and the Obligor shall ensure that the Issuer shall remain a wholly-owned subsidiary of the Obligor at all times; (xvii) the Obligor shall manage the Issuer on sound commercial and financial practice and do all that is necessary in such a way to ensure that the Issuer is in a position at all times to meet its financial obligations including to provide the Issuer with such financial assistance as may be required to ensure that the Issuer is not in a critical financial condition and is able to at all times meet its financial obligations in order to avoid being liquidated by the Capital Markets Board of Turkey; (xviii) such other positive covenants as may be advised by ASL and are mutually agreed to by the Issuer and the Obligor. (iii) Negative Covenants : (a) Negative Covenants applicable to the Issuer:Unless with the consent of the Sukuk Trustee, the Issuer shall not:- (i) create any Security Interest (as defined in paragraph SC APPROVED PTC 53
  54. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 2.02(y)(ix)(19) below) for any of its present or future indebtedness upon any of its present or future assets, properties or revenues (other than those arising by operation of law (if any) or in favour of or for the benefit of Türkiye Finans pursuant to the Corporate Lease Transaction (if any)); (ii) save for those (a) created in favour of or for the benefit of Türkiye Finans pursuant to the Corporate Lease Transaction (if any), (b) created pursuant solely to an Islamic financing structure to facilitate any future sukuk issuances/transactions undertaken by the Issuer and (c) created and disclosed in the Information Memorandum or pricing supplement, sell, lease, transfer, participate, exchange or otherwise dispose of (by preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever or otherwise) (or permit such to occur or suffer such to exist), any part of its interests in any of its assets; (iii) amend or agree to any amendment of any Transaction Document to which it is a party (other than in accordance with the terms thereof) without prior approval of the Sukuk Trustee or of the Sukukholders; (iv) other than as disclosed previously in the Information Memorandum and as contemplated under the Transaction Documents and save for (i) the Corporate Lease Transaction and (ii) any agency entered into pursuant to an Islamic financing structure to SC APPROVED PTC 54
  55. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE facilitate any future sukuk issuances/transactions undertaken by the Issuer, act as agent in respect of any other party; (v) have any Subsidiaries; (vi) redeem any of its shares or pay any dividend or make any other distribution to Türkiye Finans in its capacity as shareholder; (vii) use the proceeds of the issue of the Sukuk Murabahah for any purpose other than as stated in the Transaction Documents; (viii) prior to the date which is one year and one day after the date on which all amounts owing by the Issuer under the Transaction Documents to which it is a party have been paid in full, put to its directors or shareholders any resolution for, or appoint any liquidator for, its winding up or any resolution for the commencement of any other bankruptcy or insolvency proceeding with respect to it; (ix) enter into a transaction (which for the avoidance of doubt does not include any transactions entered into pursuant to the Transaction Documents, Corporate Lease Transaction and any transactions between the Obligor and the Issuer (as the wholly-owned subsidiary of the Obligor) pursuant to an Islamic financing structure to facilitate any future sukuk issuance/transactions undertaken by the Issuer), whether directly or indirectly with interested persons unless: (a) such transaction shall be on terms that are no less SC APPROVED PTC 55
  56. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE favourable to the Issuer than those which could have been obtained in a comparable transaction from persons who are not interested persons; and (b) in respect of a transaction involving an aggregate payment or value equal to or greater than United States Dollar One Billion (USD1,000,000,000), the Issuer obtains certification from an independent adviser that the transaction is carried out on fair and reasonable terms; and PROVIDED that the Issuer certifies to the Sukuk Trustee (1) that the transaction complies with paragraph (a); (2) that it has received the certification referred to in paragraph(b) above (if applicable); and (3) that the transaction has been approved by the majority of the board of directors or shareholders in a general meeting as the case may require; (x) permit any amendment, supplement or variation to the constitutional documents of the Issuer in a manner which may be materially prejudicial to the interests of the Sukukholders; (xi) permit or authorize any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Sukuk Murabahah or other transaction(s) contemplated by the Transaction Documents to fund any trade, business or other activities (i) involving or for the benefit of any Restricted Party, or (ii) in any SC APPROVED PTC 56
  57. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE other manner that would reasonably be expected to result in the Issuer or any party related to the Sukuk Murabahah Programme (including but not limited to the Sukukholders) being in breach of any Sanctions (if and to the extent applicable to either of them) or becoming a Restricted Party; (xii) other than the Corporate Lease Transaction the Issuer shall not issue or cause to be issued any sukuk which are similar in nature with the Corporate Lease Transaction or enter into any transaction of a similar nature with the Corporate Lease Transaction; (xiii) such other negative covenants as may be advised by ASL and are mutually agreed to by the Issuer. (b) Negative Covenants applicable to the Obligor:Unless with the consent of the Sukuk Trustee, the Obligor shall not:(i) and shall not permit any of its Subsidiaries to, in any twelve month period, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties, revenues or assets to, or purchase any properties, revenues or assets, or purchase any properties, revenues or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance, indemnity or guarantee (whether related or not) which has or in the aggregate have a value in excess of SC APPROVED PTC 57
  58. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE USD10,000,000 with or for the benefit of, any Affiliate (each, an "Affiliate Transaction") unless: (i) such Affiliate Transaction is on terms that are no less favourable to Türkiye Finans or the relevant Subsidiary than those that would have been obtained in a comparable transaction by Türkiye Finans or such Subsidiary with an unrelated person; (ii) such Affiliate Transaction involves the sale, transfer or disposal of property or equipment or intangible assets (including software programmes) relating to or forming part of Türkiye Finans’ information technology infrastructure; or (iii) such Affiliate Transaction is made pursuant to an Islamic financing structure, provided that the assets which are the subject of such financing structure cannot be ultimately sold or otherwise disposed of, except to Türkiye Finans or such person(s) as may be nominated by Türkiye Finans; (ii) create or permit to subsist any Security Interest, other than Permitted Security, upon the whole or any part of its present or future undertaking, assets or revenues (including any uncalled capital) to secure any of its Financial Indebtedness or any guarantee of Financial Indebtedness given by Türkiye Finans; SC APPROVED PTC 58
  59. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (iii) use the proceeds of the issue of the Sukuk Murabahah for any purpose other than as stated in the Transaction Documents; (iv) shall not enter into a transaction (which for the avoidance of doubt does not include any transactions entered into pursuant to the Transaction Documents and any transactions between the Obligor and the Issuer (as the whollyowned subsidiary of the Obligor) pursuant to an Islamic financing structure to facilitate any future sukuk issuance/transactions undertaken by the Issuer), whether directly or indirectly with interested persons unless: (a) such transaction shall be on terms that are no less favourable to the Obligor than those which could have been obtained in a comparable transaction from persons who are not interested persons; and (b) in respect of a transaction involving an aggregate payment or value equal to or greater than United States Dollar Five Hundred Million (USD500,000,000), the Obligor obtains certification from an independent adviser that the transaction is carried out on fair and reasonable terms; and SC APPROVED PTC 59
  60. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE PROVIDED that the Obligor certifies to the Sukuk Trustee (1) that the transaction complies with paragraph (a); (2) that it has received the certification referred to in paragraph (b) above, if applicable; and (3) that the transaction has been approved by the majority of the board of directors or shareholders in a general meeting as the case may require; (v) permit any amendment, supplement or variation to the constitutional documents of the Obligor in a manner which may be materially prejudicial to the interests of the Sukukholders; (vi) amend or agree to any amendment of any Transaction Document to which it is a party (other than in accordance with the terms thereof) without prior approval of the Sukuk Trustee or of the Sukukholders; (vii) the Obligor shall not, and shall not permit or authorize any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Sukuk Murabahah or other transaction(s) contemplated by the Transaction Documents to fund any trade, business or other activities: (i) involving or for the benefit of any Restricted Party, or (ii) in any other manner that would reasonably be expected to result in the SC APPROVED PTC 60
  61. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Obligor or any party related to the Sukuk Murabahah Programme (including but not limited to the Sukukholders) being in breach of any Sanctions (if and to the extent applicable to either of them) or becoming a Restricted Party; (x) Provisions on buy-back and early redemption of sukuk (viii) notwithstanding anything herein contained, the Obligor shall not take steps to wind-up or dissolve the Issuer; and (x) such other negative covenants as may be advised by ASL and are mutually agreed to by the Obligor. : Purchase and Cancellation The Issuer, the Obligor or any Subsidiaries (as defined in paragraph 2.02(y)(ix)(20) below), agents, related corporations and/or interested persons of the Issuer and/or the Obligor may at any time purchase the Sukuk Murabahah at any price in the open market or by private treaty, but these purchased Sukuk Murabahah shall, if purchased by the Issuer, the Obligor or by Subsidiaries (as defined in paragraph 2.02(y)(ix)(20) below) or by agent(s) of the Issuer and/or the Obligor who is acting for the purchase, be cancelled and cannot be reissued or resold, if purchased by the Issuer’s and/or the Obligor’s interested persons or related corporation (other than a Subsidiary), the Sukuk Murabahah need not be cancelled but they will not entitle such interested persons to vote at any meeting of the Sukukholders. Early Redemption The Sukuk Murabahah, in whole or in part, may be early redeemed prior to maturity dates in accordance with the SC APPROVED PTC 61
  62. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Change of Control Purchase/Redemption (as defined in paragraph 2.02(y)(ii) below). (y) Other principal terms and conditions for the proposal (i) Redemption on Maturity Unless previously (e) : redeemed or purchased and cancelled, the Issuer shall redeem the Sukuk Murabahah at their face value on their respective maturity dates. The redemption amount payable (“Redemption Amount”) by the Obligor on the declaration of an Event of Default or on Change of Control Triggering Event is an amount as determined by the Facility Agent, which shall be calculated in accordance with the formula below: Redemption Amount = Deferred Sale Price less the aggregate of Periodic Profit Payments paid (if any). (ii) Purchase of sukuk in the event of Change of Control Triggering Event (“Change of Control Purchase/Redemption”) Change (f) of Control Purchase/Redemption Each of the Issuer and the Obligor undertakes to purchase/ redeem all or any part of Sukuk Murabahah if a Change of Control Triggering Event occurs. The Obligor shall promptly notify the Issuer of the occurrence of a Change of Control Triggering Event and upon the receipt of such notification from the Obligor, within 30 days following any Change of Control Triggering Event, unless the Issuer has exercised its right to redeem the Sukuk Murabahah, the Issuer will send a notice (the “Change of Control Notice”) to each Sukukholder, with a copy to the Sukuk Trustee, stating: (1) that a Change of Control Triggering Event has occurred and that such Sukukholder has SC APPROVED PTC 62
  63. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the option to require the Issuer to purchase/redeem all or part of such Sukukholder’s Sukuk Murabahah at a price in cash equal to the Redemption Amount (the “Change of Control Payment”); (2) the redemption date (which shall be no less than 45 Business Days and no more than 60 Business Days after the notice is sent) (the “Change of Control Payment Date”); and (3) the procedures determined by the Issuer, consistent with the Trust Deed, that a Sukukholder must follow in order to have its Sukuk Murabahah redeemed. In order to exercise such option the Sukukholder must provide a duly completed exercise notice in or substantially in the form set out in the Trust Deed within the notice period of thirty (30) days after the receipt of the Change of Control Notice. Such option once exercised may not be withdrawn without the prior consent of the Issuer and the Obligor. Following the exercise of such option by the Sukukholders, the Issuer and the Obligor shall pay the Change of Control Payment on the Change of Control Payment Date. In the event that, following occurrence of a Change of Control Triggering Event, seventy five percent (75%) or more of the face amount of the Sukuk Murabahah have been purchased/ redeemed pursuant to the Change of Control Purchase, the Issuer may, on giving not less than thirty (30) days’ notice, purchase/redeem the remaining Sukuk Murabahah at their Redemption Amount, provided however that no such notice of redemption shall be given unless all amounts due by the Obligor SC APPROVED PTC 63
  64. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE under the relevant Transaction Documents are received by the Facility Agent in accordance therewith. (iii) Status and Ranking The Sukuk (g) Murabahah : issued pursuant to the relevant Transaction Documents will constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and shall at all times rank pari passu, without discrimination, preference or priority amongst themselves and at least pari passu with all other present and future (subject to paragraph 2.02(w)(iii)(a)(i) above) unsecured and unsubordinated obligations of the Issuer, subject to those preferred by law and the Transaction Documents. The obligation of the Obligor to pay the Deferred Sale Price constitute direct, unconditional, unsecured and unsubordinated obligations of the Obligor and shall at all times rank at least pari passu with all other present or future (subject to 2.02(w)(iii)(b)(ii)) unsecured and unsubordinated obligations of the Obligor, subject to the provisions of the Transaction Documents and those preferred by law. (iv) Form and denomination The Sukuk (h) Murabahah : shall be issued in accordance with the MyClear Rules and Procedures. Each series of Sukuk Murabahah shall be represented by a global certificate at the time of issuance which shall be deposited with the Central Depository. The global certificate may be exchangeable for definitive bearer certificates in certain limited circumstances only. The Sukuk Murabahah will be issued in a minimum denomination and multiples of RM1.0 million at the time of issuance. SC APPROVED PTC 64
  65. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (v) Compensation for Payment (Ta’widh) (vi) Rebate (Ibra’) Late In the event(i)of delay : in payments of any amounts of the Deferred Sale Price under the Sukuk Murabahah, the Obligor shall pay the compensation on such overdue amounts at the rate and manner prescribed by the SC’s Shariah Advisory Council from time to time in accordance with the Shariah principles. A rebate, where (j) applicable, may be granted at the absolute discretion of the Sukukholders. The Sukukholders in subscribing or purchasing the Sukuk Murabahah hereby consent to grant such rebate if the Sukuk Murabahah is redeemed before maturity i.e. upon the declaration of an event of default or early redemption pursuant to the Change of Control Triggering Event. The rebate (Ibra’) shall be the aggregate Periodic Profit Payments due to the Sukukholders in respect of the period from (and including) the date of full payment by the Obligor of all accrued and unpaid Deferred Sale Price pursuant to the declaration of any event of default or early redemption pursuant to the Change of Control Triggering Event up to (but excluding) the Maturity Date applicable for that series of Sukuk Murabahah. SC APPROVED PTC 65
  66. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (vii) Sukuk Trustees’ Reimbursement Account for Sukukholders’ Actions The Issuer shall set up a Shariah compliant and profit-bearing “Sukuk Trustee’s Reimbursement Account for Sukukholders’ Actions” (“Account”) with a sum of RM30,000.00 from the moneys received by the Issuer when the Sukuk Murabahah are issued and which shall be maintained at all times throughout the tenure of the Sukuk Murabahah Programme. The Account shall be operated by the Sukuk Trustee and the monies shall only be used strictly by the Sukuk Trustee in carrying out its duties upon the occurrence of an Event of Default or enforcement events as provided in the relevant Transaction Documents. (viii) Transaction Documents The Sukuk Murabahah (k) : Programme shall be subject to the execution of documentation satisfactory to all parties incorporating clauses customary for transactions of this nature as advised by ASL and agreed by the Issuer. Such documentation shall include, but not be limited to, the following: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Programme Agreement; Trust Deed; Securities Lodgement Form for Central Securities Depository and Paying Agency Services; Service Agency Agreement; Facility Agency Agreement; Commodity Murabahah Master Agreement; Subscription Agreement; Purchase Order CTP Purchase Agreement; Commodities Sale Agreement; CTP Sale Agreement; Sukuk Murabahah; and Any other relevant documents designated as Transaction Documents by the Issuer and the Sukuk Trustee and all other documents of whatsoever nature executed or to be executed in connection with or pursuant to an of the above documents or SC APPROVED PTC 66
  67. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE otherwise in connection with the Sukuk Murabahah Programme, and references to the “Transaction Documents” shall mean each of any of them. (ix) Definitions (1) “Affiliate" means, in respect of any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person, and, in the case of a natural person, any immediate family member of such person. For the purposes of this definition, control, as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise and the terms controlling, controlled by and under common control with shall have corresponding meanings; (2) “Business Day” means a day (other than Saturday, Sunday and public holidays) on which financial institutions are open for business in Kuala Lumpur; (3) “Change of Control Triggering Event” means: (a) The National Commercial Bank JSC ceases to have the power to direct the management and policies of Türkiye Finans (whether through the ownership of voting capital, by contract, decree or otherwise); or (b) there is a reduction in the principal share ownership of the National Commercial Bank in Türkiye Finans to less than fifty one per cent. (51%) of the issued share capital of Türkiye SC APPROVED PTC 67
  68. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Finans; (4) “Corporate Lease Transaction” means the lease certificates based on the Shariah concept of Ijara amounting to 31,500,000 Turkish Lira in aggregate issued on 22 January 2014 for a tenor of two (2) years and issued on 22 January 2014 for a tenor of three (3) years respectively by TF Varlik and solely subscribed and held (legally and beneficially) at all times only by Türkiye Finans (as the investor) with the source of payment to Türkiye Finans backed or supported by the underlying rental payments from two (2) corporate customers of Türkiye Finans as the lessees and the obligors. (5) “Financial Indebtedness” means any indebtedness for or in respect of: (a) moneys borrowed/any financing; Islamic (b) any amount raised by acceptance under any acceptance credit facility; (c) any amount raised pursuant to any note purchase facility or the issue of Sukuk or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a finance or capital lease; (e) receivable sold (other than any receivables to the extent they are sold on a nonrecourse basis); (f) any amount raised under any other transaction (including any purchase agreement) having the commercial effect of a borrowing/ financing; SC APPROVED PTC 68
  69. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (6) (g) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and (h) (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (g) above. “IFRS” means International Financial Reporting Standards issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee of IASB (as amended, supplemented or reissued from time to time); (7) “interested person” shall have the meaning ascribed to it in the Trust Deeds Guidelines issued by the SC which includes directors, major shareholders and chief executive of the Issuer or the Obligor, as the case may be; (8) “Group” means Türkiye Finans and its Subsidiaries, taken as a whole at any given time; (9) “Liability” means any loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever (including, without limitation in respect of taxes) and including any value added tax or similar tax charged or chargeable in respect thereof and legal or other fees and expenses on a full indemnity basis; (10) “Material Adverse Effect” means: (i) an event which will materially and adversely affect the ability of the Issuer and/or the Obligor to perform its obligations under SC APPROVED PTC 69
  70. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the Transaction Documents to which it is a party; (ii) an event which would have a material adverse effect on the condition (financial or otherwise) of the Issuer and/or the Obligor and/or any of the Material Subsidiaries; and (iii) an event which would have a material adverse effect on the validity, legality or enforceability of the Transaction Documents or the rights or remedies of the Sukuk Trustee and the Issuer under the relevant Transaction Documents; (11) “Material Subsidiaries” means a subsidiary (save for the Issuer) which meets any of the following conditions:(i) the Obligor’s and its other subsidiaries’ investments in and advances to the Subsidiary exceed 10 percent of the total assets of the Obligor and its Subsidiaries consolidated as of the end of the most recently completed fiscal year (for a proposed business combination to be accounted for as a pooling of interests, this condition is also met when the number of common shares exchanged or to be exchanged by the Obligor exceeds 10 percent of its total common shares outstanding at the date the combination is initiated); or (ii) the Obligor’s and its other Subsidiaries’ proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds 10 percent of the total assets of the Obligor and its Subsidiaries consolidated as of the end of the most recently completed fiscal year; or (iii) the Obligor’s and its other Subsidiaries’ equity in the income from continuing operations before income taxes, SC APPROVED PTC 70
  71. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE extraordinary items and cumulative effect of a change in accounting principle of the Subsidiary exceeds 10 percent of such income of the Obligor and its Subsidiaries consolidated for the most recently completed fiscal year. For purposes of making the prescribed income test the following guidance should be applied: (i) when a loss has been incurred by either the parent and its Subsidiaries consolidated or the tested Subsidiary, but not both, the equity in the income or loss of the tested Subsidiary should be excluded from the income of the Obligor and its Subsidiaries consolidated for purposes of the computation; (ii) if income of the Obligor and its Subsidiaries consolidated for the most recent fiscal year is at least 10% lower than the average of the income for the last five fiscal years, such average income should be substituted for purposes of the computation. Any loss years should be omitted for purposes of computing average income; and (iii) where the test involves combined entities, as in the case of determining whether summarised financial data should be presented, entities reporting losses shall not be aggregated with entities reporting income. (12) “Permitted Business” means any business which is the same as or related, ancillary or complementary to any of the business of the Issuer and/or SC APPROVED PTC 71
  72. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE the Obligor; (13) “Permitted Security” means:a) any Security Interest arising in the ordinary course of the Obligor’s business; b) any Security Interest securing any Financial Indebtedness of the Obligor arising by operation of law, provided such security interest is discharged within 60 (sixty) days of arising; c) any Security Interest created by or arising out of title retention provisions in a vendor’s or supplier’s standard sale or supply terms and conditions and in the ordinary course of business; d) any Security Interest arising in the ordinary course of banking arrangements or investment transactions (including, without limitation, sale, lease, syndication and repurchase transactions and any netting or set-off arrangements entered into in the ordinary course of the Obligor’s banking arrangements for the purpose of netting debit and credit balances), provided that the Security Interest is limited to the assets which are the subject of the relevant transaction; e) any Security Interest over or affecting any asset acquired by the Obligor after the closing date, if such security interest was created at the time of such acquisition to secure any Financial Indebtedness incurred for the purpose of financing such acquisition; SC APPROVED PTC 72
  73. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE f) any Security Interest arising out of the refinancing, substitution, extension or renewal of any indebtedness secured by way of Security Interest permitted by paragraphs (d) and (e) above, except to the extent the principal amount secured by that Permitted Security exceeds, in the case of paragraph (e) above, the principal amount of the Financial Indebtedness incurred for the purpose of financing such acquisition; g) any Security Interest created in connection with any securitisation; h) any Security Interest arising in connection with any payment or close-out netting or set off arrangement pursuant to any hedging transaction entered into by the Obligor for the purpose of (i) hedging any risk to which it is exposed in its ordinary course of business or (ii) its profit rate or currency management operation which are carried out in the ordinary course of business and, in any case, for non-speculative purposes only and excluding, in each case, any Security Interest under a credit support arrangement in relation to a hedging transaction; i) any Security Interest created or outstanding with the approval of the Sukukholders; and j) any Security Interest not otherwise permitted by the above paragraphs securing Financial Indebtedness of the Obligor in an aggregate principal amount at any time outstanding not exceeding an amount equal to 20 (twenty) per cent of the SC APPROVED PTC 73
  74. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE Obligor’s consolidated tangible net worth. For the purpose of this paragraph, the Obligor’s "consolidated tangible net worth" means the amount equal to the aggregate of the fully paid and issued share capital, share capital premium, all reserves and retained earnings of the Group as shown in the then most recent unconsolidated annual financial statements of the Obligor prepared in accordance with the principles of the Banking Regulation and Supervision Agency of the Republic of Turkey. (14) “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, company, firm, trust, organisation, government, or any agency or political subdivision thereof, or any other entity, whether or not having a separate legal personality; (15) “Potential Event of Default” means any event which, with the giving of any notice or the making of any determination or with the lapse of time would become an Event of Default; (16) "Restricted Party" means a person that is: (i) listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List; (ii) located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a person located in or organized under the laws of a country or territory that is the target of country-wide or territorywide Sanctions; or (iii) otherwise a target of Sanctions ("target of Sanctions" signifying a person with whom a US person or other national of SC APPROVED PTC 74
  75. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities); (17) "Sanctions" means the economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States government; (ii) the United Nations; (iii) the European Union (iv) the United Kingdom; or (v) the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury ("OFAC"), the United States Department of State, and Her Majesty’s Treasury ("HMT"); (together "the Sanctions Authorities"); (18) "Sanctions List" means the "Specially Designated Nationals and Blocked Persons" list maintained by OFAC, the Consolidated List of Financial Sanctions Targets and the Investment Ban List maintained by HMT, or any similar list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities; (19) “Security Interest” means any mortgage, charge, pledge, lien, or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect; (20) “Subsidiaries” means an entity of which a person has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting capital or similar right of ownership or which has been decreed to it or constituted as a subsidiary entity under applicable law and “control” for this purpose means the power to direct the management and the policies of the entity whether through the ownership of SC APPROVED PTC 75
  76. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE voting capital, by contract or otherwise. (x) Governing Law The laws of (a) Malaysia. : (xi) Arbitration Any dispute (b) arising out of or in connection with any of the Sukuk Murabahah shall be decided by arbitration in accordance with the Rules for Arbitration of Singapore International Arbitration Centre. (xii) Taxation All payments (c) by the : Issuer and/or the Obligor in respect of the Sukuk Murabahah to be issued shall be made in full without any withholding or deductions for or on account of any present or future tax, duty or charge of whatsoever nature imposed or levied by or on behalf of Malaysia or any other applicable jurisdictions, or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law, in which event the Issuer and/or the Obligor shall be required to make payment of such additional amount so that the payee would receive the full amount which the payee would have received if no such withholding or deductions are made. (xiii) Cost and Expenses All legal (d) fees, :stamp duties and reasonable expenses incurred in connection with the Sukuk Murabahah, including professional due diligence fees and fees payable to the transaction parties shall be for the account of the Issuer. (xiv) Force Majeure There shall (e) be no: occurrence of any significant change in the market conditions or condition of the Issuer which may, in the reasonable opinion of the JLAs, Facility Agent and the Sukuk Trustee have the effect of prejudicing the successful completion of this transaction. SC APPROVED PTC 76
  77. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE (xv) Other Conditions The Sukuk Murabahah (f) : Programme shall at all times be governed by relevant guidelines issued and to be issued from time to time by the SC and/or BNM having jurisdiction over matters pertaining to the Sukuk Murabahah Programme. [the remainder of this page has been intentionally left blank] SC APPROVED PTC 77
  78. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE ANNEXURE 1 Transaction Structure for the Sukuk Murabahah Programme Structure Commodity Vendor(s) 3 (b) Bursa Malaysia Islamic Services Sdn. Bhd. Commodities Transfer to BMIS 6 (c) Commodities Transfer to CTP Bursa Suq Al-Sila 3 (c) 3 (a) Facility Agent (Secondary Purchasing Agent) 1 (b) Facility Agency Agreement Commodity Trading Participant (CTP) Purchase Price = Sukuk Proceeds Purchase Commodities on spot 6 (a) Purchase Order with Undertaking to Purchase 5 TF Varlik (Primary Purchasing Agent on behalf of Sukukholders and as Issuer) 1 (a) 2 Purchase Price = Sukuk Proceeds Sale of Commodities on spot 6 (b) Sale of Commodities at Deferred Sale Price 2 Service Agency Agreement Purchase Order with Undertaking to Purchase 7 Sukuk proceeds 4 (b) 4 (a) Sukukholders Sukuk Trustee Issue Sukuk 7 Turkiye Finans (Purchaser) (Obligor) Periodic payment of Deferred Sale Price = Purchase Price + profit Periodic payment of Deferred Sale Price = Purchase Price + profit Fund flow Process SC APPROVED PTC 78
  79. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 1. (a) The Sukuk Trustee, on behalf of the investors of each of the series of the Sukuk Murabahah (“Sukukholders”), and TF Varlik shall enter into a Service Agency Agreement, pursuant to which TF Varlik (in such capacity, the “Primary Purchasing Agent”) is appointed as the agent of the Sukukholders for the purchase and sale of certain Shariah compliant commodities which would exclude ribawi items in the category of medium of exchange such as currency, gold and silver (“Commodities”). (b) The Primary Purchasing Agent will then enter into a Facility Agency Agreement to appoint the Facility Agent as the sub-agent (in such capacity, the “Secondary Purchasing Agent”) for the purchase and sale of the Commodities under the Sukuk Murabahah Programme. 2. Pursuant to a Commodity Murabahah Master Agreement, prior to or on the date on which the relevant series of Sukuk Murabahah is issued, Türkiye Finans (acting as purchaser for itself) shall issue a purchase order (“Purchase Order”) in relation to the said series to the Primary Purchasing Agent and the Secondary Purchasing Agent. In the Purchase Order, the Obligor (acting as purchaser for itself) will request the Primary Purchasing Agent and the Secondary Purchasing Agent to purchase the Commodities and will irrevocably undertake to purchase the Commodities from the Sukukholders via the Secondary Purchasing Agent at a deferred sale price (“Deferred Sale Price”) which shall be the Purchase Price (as defined below) plus the profit margin. 3. (a) Based on the Purchase Order, the Secondary Purchasing Agent (pursuant to the CTP Purchase Agreement entered into between the Secondary Purchasing Agent and the Commodity Trading Participant (“CTP”) for the said series), will purchase on a spot basis the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila’ commodity market (through a CTP) at a purchase price (“Purchase Price”) which shall be an amount equivalent to the Sukuk Murabahah proceeds. (b) The commodities shall pass from the commodity vendor(s) to the CTP, held for the benefit of the Sukukholders. (c) The Purchase Price of the Commodities shall be in accordance with the Asset pricing requirement stipulated under the Sukuk Guidelines issued by the Securities Commission Malaysia (“SC”). (a) TF Varlik (acting as the Issuer) shall then issue Sukuk Murabahah to the Sukukholders where the Sukuk Murabahah to the Sukukholders whereby the proceeds shall be used to pay for the Purchase Price of the Commodities. The Sukuk Murabahah shall evidence, amongst others, the Sukukholders’ ownership of the Commodities and subsequently, once the Commodities are sold to the Obligor (acting as the purchaser), the entitlement to receive the Deferred Sale Price. (b) The proceeds shall be used to pay for the Purchase Price of the Commodities. 4. SC APPROVED PTC 79
  80. TF VARLIK KIRALAMA ANONIM SIRKETI PROPOSED ISSUE OF , OFFER FOR SUBSCRIPTION OR PURCHASE OF, OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SUKUK MURABAHAH BASED ON THE SHARIAH PRINCIPLE OF MURABAHAH (VIA ATAWARRUQ ARRANGEMENT) PURSUANT TO A SUKUK MURABAHAH PROGRAMME OF UP TO RM3.0 BILLION IN NOMINAL VALUE 5. Thereafter, pursuant to the undertaking under the Purchase Order, the Secondary Purchasing Agent (acting on behalf of the Primary Purchasing Agent) shall sell the Commodities to the Obligor (acting as the purchaser) at the Deferred Sale Price under a commodities sale agreement (the “Commodities Sale Agreement”). 6. (a) Upon completion of such purchase, the Obligor (pursuant to the CTP Sale Agreement entered into between itself (acting as purchaser) and the CTP for the said series) shall sell the Commodities to Bursa Malaysia Islamic Services Sdn. Bhd. (“BMIS”)(through the CTP) on a spot basis. The CTP Sale Agreement will provide for the CTP to directly sell the Commodities to BMIS upon notice by the Secondary Purchasing Agent that the Commodities Sale Agreement has been completed and executed. (b) The sale to BMIS shall be in consideration of an amount equal to the Purchase Price. (c) The Commodities shall pass from the CTP (acting on behalf of the Obligor as the purchaser) to BMIS. 7. During the tenor of the Sukuk Murabahah, the Obligor (as part of its obligation to pay the Deferred Sale Price) shall make Periodic Profit Payments to the Sukukholders through the Primary Purchasing Agent. Upon maturity (unless earlier redeemed) the Obligor shall pay through the Primary Purchasing Agent all amounts outstanding in respect of the Deferred Sale Price of the relevant Sukuk Murabahah upon which the relevant Sukuk Murabahah will be cancelled. Upon the declaration of an Event of Default or upon occurrence of a Change of Control Triggering Event, the Obligor shall pay the Redemption Amount directly to the Sukukholders upon which the relevant Sukuk Murabahah will be cancelled. SC APPROVED PTC 80