CLASS AUTO RECEIVABLES BERHAD RM10,000 MILLION NOMINAL VALUE ASSET- BACKED MEDIUM TERM NOTES PROGRAMME PRINCIPAL TERMS & CONDITIONS

Transcription

1 CLASS AUTO RECEIVABLES BERHAD RM10,000 MILLION NOMINAL VALUE ASSET- BACKED MEDIUM TERM NOTES PROGRAMME PRINCIPAL TERMS & CONDITIONS Page 1

2 Securitisation Transaction Overview The Originator intends to sell Hire Purchase Receivables originated in its ordinary course of business from time to time to raise funds for purposes as it may determine. The Hire Purchase Receivables are originated under standard hire purchase agreements entered into between the Originator and the hirers. This transaction pertains to a proposal to securitise Hire Purchase Receivables originated by the Originator pursuant to the joint venture agreement dated 22 October 2003 (the JVA ) entered into between the Originator and Proton Edar Sdn Bhd (Co. No A). Under the JVA, the Hire Purchase Receivables are recorded and accounted for by the Originator for and on behalf of PCSB, as the joint venture company set up pursuant to the JVA. The sale of the Hire Purchase Receivables by the Originator for the purposes of the MTN Programme (as defined below) has been approved by PCSB and the shareholders of PCSB. The Issuer has been incorporated for the purposes, inter alia, of purchasing Hire Purchase Receivables from the Originator and to fund such purchases by the issue of notes (the Notes/MTNs ) pursuant to a medium term note programme (the MTN Programme ). Any such Notes shall be governed by, among others, the Securities Commission s GUIDELINES ON THE OFFERING OF PRIVATE DEBT SECURITIES and structured to comply with the Securities Commission s GUIDELINES ON THE OFFERING OF ASSET-BACKED SECURITIES, subject to such exemptions granted by the Securities Commission from time to time. PCSB (Beneficial owner of HP Receivables) OSK Trustees (Share Trustee) SPV Corp (Administrator) Malaysian Trustees (Trustee/ Security Trustee) Ownership of Issuer Administrative Services CIMB Bank (Originator) Hire Purchase Receivables Issuance Proceeds Class Auto Receivables Berhad (Issuer) Notes Proceeds on Notes Notes Investors Servicing Agreement CIMB Bank (Servicer) Page 2

3 Background Information 1. (a) Issuer (a) Name : Class Auto Receivables Berhad (i) Address : Suite 7.02, 7 th Floor, Wisma Central, Jalan Ampang Kuala Lumpur (ii) Company Registratio n No. : A (iii) (iv) Date/ Place of Incorporati on Date of Listing (in case of a publiclisted company) : 6 March 2006 / Kuala Lumpur : Not listed (v) Status : Resident-controlled company/ non Bumiputeracontrolled company (vi) Principal Activities : Implementing and carrying out the proposed asset-backed securitisation transaction under the MTN Programme as detailed in this Principal Terms and Conditions. It is intended that purchases from the Originator will be of discrete pools of Hire Purchase Receivables and each purchase would be funded through a separate issue of Notes, with each issue of such Notes having the same issue date (each a Notes Series ) being secured or having the benefit of, but being limited in its recourse for payment of coupon and redemption of the principal in such Notes, to the Hire Purchase Receivables purchased through the proceeds of that issue and all security securing such Notes Series. (vii) Board of Directors (as at 3 August With regard to the MTN Programme, the subject of these Principal Terms and Conditions, see Section (A) Further Details of the Notes Item (xii) on Limited Recourse. : i. Lui Kwee Hui ii. Lim Kean Chai Page 3

4 2007) (viii) Structure of shareholdi ngs and names of shareholde rs or, in the case of a public company, names of all substantial shareholde rs : Name of Shareholder OSK Trustees Berhad No. of shares Percentage of held shares (%) 2 100% (ix) Authorised capital/ Paid up capital (as at 3 August 2007) Authorised Capital: RM100,000 Paid Up Capital: RM2.00 (b) Originator (i) Name : CIMB Bank Berhad (ii) Address : 5 th Floor, Bangunan CIMB, Jalan Semantan, Damansara Heights Kuala Lumpur (iii) Company Registration No. : P (iv) Date/ Place of Incorporation (v) Date of Listing (in case of a public-listed company) : 30 December 1972 Malaysia : Not listed (vi) Status : Resident-controlled company/ Bumiputeracontrolled company (vii) Principal Activities : The principal activities of CIMB Bank are banking and the provision of related financial services including factoring, leasing and finance company business. Its subsidiaries are involved in nominee services, Islamic banking, investment holding, financial futures and options, unit trust management, offshore trust, property investment Page 4

5 (viii) Board of Directors (as at 3 August 2007) and management, service company and offshore banking : Tan Sri Dato Seri Haidar Mohamed Noor Dato Nazir Razak Tan Sri G.K. Rama Iyer Dato Dr. Mohamad Zawawi Ismail Datuk Dr. Syed Muhammad Syed Abdul Kadir Dato Haji Zainal Abidin Putih Dato Mohd. Shukri Hussin Tunku Dato Ahmad Burhanuddin Dr. Gan Wee Beng (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders (as at 3 August 2007) (x) Authorised capital/ Paid up capital (as at 3 August 2007) Dato Seri Dr. Yeap Leong Huat : Name of share Direct Indirect holder % % CIMB Group Sdn Bhd Bumiputra- Commerce Holdings Berhad 99.99% % : Authorised Capital: RM7,500,120,000 comprising of 7,000,000,000 ordinary shares at par value of RM1.00 each, RM500,000,000 comprising of 500,000,000 perpetual preference shares of RM1.00 each, 1,000, % redeemable preference shares of RM0.10 each and 200, % non-cumulative redeemable preference shares of RM0.10 each. Paid up capital: RM 3,174,010,786 comprising of 2,974,009,486 ordinary shares at par value of RM1.00 each, 200,000,000 perpetual preference shares of RM1.00 each and 13,000 redeemable preference shares of RM0.10 each. Page 5

6 2. (a) Names of parties involved in the proposed transaction (where applicable) (i) Principal Adviser/Lead Arranger : CIMB Investment Bank Berhad ( CIMB ) (ii) Arranger(s) : Not applicable (iii) Valuers : Not applicable (iv) Solicitors : Zaid Ibrahim & Co (v) (vi) Financial Adviser Technical Adviser : Not applicable : Not applicable (vii) Guarantor : Not applicable (viii) Trustee : Malaysian Trustees Berhad (Co. No V) ( MTB ) (ix) Facility Agent : CIMB (x) (xi) Primary Subscriber(s) and amount subscribed (where applicable) Underwriter(s) and amount underwritten : To be determined prior to the point of each issuance of the MTNs if made via bought deal mode of issue. : To be determined prior to the point of each issuance of the MTNs if underwriting is required. (xii) Central Depository : Bank Negara Malaysia ( BNM ) (xiii) Paying Agent : BNM (xiv) Reporting Accountants : Accounting Adviser: PricewaterhouseCoopers (AF: 1146) (xv) Others Lead Manager Co Manager(s) : CIMB : To be determined prior to the point of each issuance of the MTNs if required Page 6

7 Servicer : CIMB Bank Page 7

8 Substitute Servicer : The Servicing Agreement will provide for the appointment of a substitute servicer (which is acceptable to the Trustee and the Rating Agency) if the Servicer resigns or is removed. Administrator : SPV Corporate Services Sdn Bhd (Co. No U), appointed to provide company secretarial services to and administers the statutory duties of the Issuer, including the filing of the relevant statutory returns with the regulatory authorities and to act on any other matters as may be instructed by the Trustee from time to time. Security Trustee : MTB will act as the security trustee for the Notes. Share Trustee Calculation Agent : OSK Trustees Berhad (Co. No U), which holds the entire issued share capital of the Issuer under a discretionary trust for the benefit of certain Malaysian entities including Malaysian charities. : CIMB Tax Adviser : PricewaterhouseCoopers Tax Services Sdn Bhd (Co. No M). Swap : To be determined prior to the point of each Counterparty issuance of MTNs and acceptable to the Rating Agency. Liquidity Facility Provider : To be determined prior to the point of each issuance of MTNs and acceptable to the Rating Agency. The transaction will provide for the appointment of a substitute Liquidity Facility Provider (which is acceptable to the Trustee and the Rating Agency) within a period of 6 months if the then current rating of the Liquidity Facility Provider is downgraded to below the minimum credit rating specified or if the Liquidity Facility Provider is removed. (b) Facility Description : Asset-backed MTN Programme comprising of Class A Notes, Class B Notes, Class C Notes, Class D Notes and Owner s Notes. (c) Issue Size (RM) : The outstanding nominal value of MTNs issued under the MTN Programme shall not exceed RM10,000 million at any time. (d) Issue price (RM) : The MTNs may be issued at par or at a discount. (e) Tenor of the facility/issue : Programme: Twenty (20) years from the date of the fulfilment of all Conditions Precedent under the MTN Facility Agreement Page 8

9 Each Notes Series: Exceeding one (1) year as the Issuer may select, provided that the Notes mature prior to the expiry of the MTN Programme. Final Redemption: Unless previously redeemed or cancelled, the Notes will be redeemed by the Issuer at one hundred percent (100%) of its nominal value together with interest accrued to the date of redemption on their respective Maturity Dates. Failure to repay principal in full by the Maturity Date will constitute an Event of Default. However, principal may in certain circumstances be repaid prior to the Maturity Date without penalty. (Please see Section (E) on Application of Funds - Item I(iv) (Sequential Pass-Through Option) or Item (II)(iv) (Reverse Pass-Through Option). Series All Notes issued on a particular issuance date shall be identified as belonging to an identified series of Notes (each a Series ). Series are identified by a number denoting the calendar year of issuance and an alphabet denoting the sequence of issuance within the calendar year. As an illustration, the first series under the MTN Programme is identified as Notes Series 2007-A. Class All Notes in a particular Series shall be identified as belonging to an identified class (each a Class ). Any Notes identified as belonging to a Class shall rank pari passu with all other Notes identified as belonging to the same Class in the same Notes Series. Classes are identified alphabetically in descending order of ranking/seniority, with the senior-most class being identified as Class A and the most junior as Owner s Notes. A particular Notes Series may involve the issuance of Notes belonging to some only or all of the identified Classes. As an illustration, Notes Series 2007-A was issued in four (4) Classes, identified in descending order of ranking/seniority as Class A Page 9

10 (f) Interest/Coupon (%) (please specify) Notes, Class B Notes, Class C Notes and Owner s Notes. Tranche Class A Notes in a particular Series may be issued with one or more distinct amortisation profiles and/or maturity dates (each a Tranche ). Where Class A Notes in a Notes Series comprises several Tranches, each Tranche shall be identified numerically in ascending order of final maturity date, with the shortest tranche being identified as Tranche 1. As an illustration, the Class A Notes in Notes Series 2007-A was issued in five (5) Tranches identified as Class A Tranche 1, Class A Tranche 2, Class A Tranche 3, Class A Tranche 4 and Class A Tranche 5 with legal maturities of 1, 3, 5, 7 and 8 years respectively. Tranche Amortisation Tranches of Notes Series may be structured to amortise according to Sequential Pass-Through Option or Reverse Pass-Through Option (as defined herein). Where the Sequential Pass-Through Option is identified, the tranches of the Class A Notes of the Relevant Notes Series shall be identified by appending (S) to the relevant tranches e.g. Class A Tranche 1 (S). Where the Reverse Pass-Through Option is identified, the Notes Series shall be identified as Notes Series [year] [alphabet] (R). Further the tranches of the Class A Notes with bullet maturities shall be identified by appending (B) to the relevant tranches e.g. Class A Tranche 1 (B). The tranches of the Class A Notes which will be redeemed in the inverse order of maturity shall be identified by appending (P) to the relevant tranches e.g. Class A Tranche 3 (P). : The coupon rates for each Notes Series shall be determined and mutually agreed between the Issuer and the Lead Manager at the time of issue. Default Interest: 1.0% per annum above the base lending rate of Malayan Banking Berhad on the amount unpaid from and including the relevant due date up to but excluding the date of actual payment, Page 10

11 calculated based on the actual number of days elapsed and a year of 365 days. (g) Interest/Coupon Payment frequency : Quarterly payment from the relevant issue date of each Notes Series. (h) Interest/Coupon Payment basis : The coupon will be calculated on the basis of the actual number of days elapsed and a year of 365 days (actual/365 days). (i) Yield to Maturity (%) : To be determined upon each issuance of MTNs. (j) Security/Collateral (if any) : The security for each Notes Series will comprise the following : (i) (ii) a security deed (the Pool Security Deed ) creating an assignment of all the Issuer s rights, title and benefit and interest in, to and under the Master Purchase Agreement, the Servicing Agreement, the Administration Agreement and such other relevant Transaction Documents (other than the documents relating only to the issue of the MTNs) and any payments or amounts due from time to time to the Issuer. This assignment shall be held by the Trustee for the benefit of all Notes Series in issue at any time pari passu and rateably, in proportion to the outstanding nominal values of each Notes Series; a security deed (the Series Security Deed ) creating an assignment and charge to the Security Trustee of all of the Issuer s rights, title, benefit and interest in, to and under the relevant Series Purchase Contract, and any and all rights, title and interest under the relevant Hire Purchase Receivable Series, including all rights to payments or amounts due from time to time to the Issuer under the relevant Hire Purchase Receivables Series, and all amounts standing to the credit of the Collections Account opened for the purposes of depositing proceeds from the relevant Hire Purchase Receivables Series, and, if the Issuer selects under Section (E) on Applications of Funds to make payment under the Reverse Pass- Through Option, all amounts standing to the credit of the Principal Funding Account solely as security for such Notes Series; (iii) such other security as advised by the solicitors of the Lead Manager and Lead Page 11

12 (k) Details on utilisation of proceeds Arranger. Recourse against the Issuer in relation to its obligations under each Notes Series will be limited to the collections from the relevant Hire Purchase Receivables Series pertaining to the said Notes Series and any assets related thereto and derived therefrom, and from realisation of any security relating thereto. The holders of the Notes will have no recourse to the Originator or the Issuer s other assets. Class A Notes in a Notes Series rank ahead of Class B, Class C, Class D and Owner s Notes in the same Notes Series. Class B Notes in a Notes Series rank ahead of Class C, Class D and Owner s Notes in the same Notes Series. Class C Notes in a Notes Series rank ahead of Class D and Owner s Notes in the same Notes Series. Class D Notes in a Notes Series rank ahead of Owner s Notes in the same Notes Series. : The issue proceeds from the Notes shall be utilised by the Issuer on each relevant Issue Date as follows: (1) an amount sufficient to meet the initial fees, costs and expenses incurred or to be incurred by the Issuer in connection with the relevant Notes Series; (2) to fund the Winding Up Reserve Account; and (3) to fund the acquisition of the Hire Purchase Receivables meeting certain Eligibility Criteria (as defined in Section (B) of this Principal Terms and Conditions) by the Issuer from the Originator. Amounts received by the Originator shall be used for the purposes of PCSB. (l) Sinking fund (if any) : Not applicable. (m) Rating Page 12

13 Credit rating assigned (Please specify if this is an indicative rating) : The rating for Notes Series 2007-A are as follows: Class RAM MARC Class A AAA AAA Class B AA2 AA Class C A1 A+ Owner s Notes Unrated Unrated (n) Name of Rating Agency Form and Denomination : Each issuance of Notes Series may be rated by: Malaysian Rating Corporation Berhad (Co. No V); and/or RAM Rating Services Berhad (Co. No T) : The MTNs shall be issued in accordance with (1) IPBM Code and (2) the RENTAS Rules and (3) the FAST Rules. The RENTAS Rules shall prevail to the extent of any inconsistency between the RENTAS Rules and the IPBM Code. Each tranche of the MTNs shall be represented by a global certificate to be deposited with BNM, and is exchanged for definitive bearer certificates only in certain limited circumstances. The denomination of the Class A Notes shall be RM1,000,000 or in multiples of RM1,000,000 at the time of issuance. The denomination of the Class B Notes shall be RM250,000 or multiples of RM250,000 at the time of issuance. The denomination of the Class C Notes shall be RM250,000 or multiples of RM250,000 at the time of issuance. The denomination of the Class D Notes shall be RM250,000 or multiples of RM250,000 at the time of issuance. The denomination of the Owner s Notes shall be RM1.00 or multiples of RM1.00 at the time of issuance. (o) Mode of Issue : The Notes may be issued on private placement on a best efforts basis or book running on a best efforts basis or on a bought deal basis subject to terms and conditions to be agreed between the Issuer and the Lead Manager. (p) Selling Restrictions : The Notes may not be offered, sold, transferred or otherwise disposed, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia, Page 13

14 other than to persons (the Eligible Persons ) to whom the offer or invitation to purchase Notes would be an excluded issue or excluded offer (as both terms are defined in the Capital Markets and Services Act, 2007). In addition, if any offer or sale of Notes or any distribution of any document or other material in connection therewith is to be conducted in any jurisdiction other than Malaysia, the applicable laws and regulations of such jurisdiction will also have to be complied with prior to any such offer, sale or distribution. The Notes are transferable subject to the selling restrictions set out in the preceding paragraph. Further, if a MTN is not rated, it shall not be tradeable or transferable. The Originator and/or its wholly-owned subsidiaries and/or their affiliates may subscribe for the MTNs. Eligible Person shall mean Persons to whom the offer or invitation to subscribe or purchase the MTNs are issued would fall within: (a) at the point of issuance of the MTNs, Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) and Schedule 9 or Section 257(3) of the Capital Markets and Services Act, 2007 as amended from time to time ( CMSA ); and (b) after the issuance of the MTNs, Schedule 6 or Section 229(1)(b) and Schedule 9 or Section 257(3) of the CMSA. (q) Listing Status : The MTNs will not be listed or quoted on the Bursa Securities or any other stock exchange. (r) Minimum level of subscription (RM or %) Issuance : The minimum level of subscription for each issue of the Notes under the MTN Programme shall be 100% of the size of a particular issue. The MTNs may be issued in multiples of RM1,000,000 for the Class A Notes, RM250,000 for the Class B Notes, RM250,000 for the Class C Notes, RM250,000 for the Class D Notes and RM1.00 for the Owner s Notes but subject to the FAST Rules and other standard conditions including, without limitation, the following: (i) The minimum size of each Notes Series to Page 14

15 be issued shall not be less than RM10 million; (ii) The issue notice shall be given to the Facility Agent at least eight (8) Business Days (for the first issue) or 6 Business Days (for subsequent issues) prior to and excluding the date of proposed issue; (iii) The Class A Notes are rated at least AAA or its equivalent; and (iv) Any amount redeemed may be re-issued within the Availability Period subject to the MTN Programme limit. (s) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) (t) Conditions Precedent Conditions Precedent to the availability of the MTN Programme : None : To include but not limited to the following (all have to be in form and substance acceptable to the Lead Arranger and Lead Manager) : (A) Execution of Documents (i) The Transaction Documents have been signed and stamped or endorsed as exempted under Stamp Duty Exemption (No. 23) Order 2000 or Stamp Duty Exemption (No. 12) Order 2001 as the case may be. (B) The Issuer (i) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association, Forms 9, 20, 24 and 49 of the Issuer; (ii) A certified true copy of a board resolution of the Issuer authorising, among others, the execution of the Transaction Documents; (iii) A list of the Issuer s authorised signatories and their respective specimen signatures; (iv) A report of the companies search conducted at the CCM confirming that there are no charges that have been registered in the CCM against the Page 15

16 Issuer s assets; (v) A report of the winding up search conducted at the office of the Director- General of Insolvency confirming that the Issuer has not been wound up. In the event the winding-up search result of the Issuer is not available, the relevant statutory declaration in form and substance acceptable to the Lead Arranger and Lead Manager signed by a director of the Issuer declaring that the Issuer is not wound up and that no winding-up petition has been presented against the Issuer; and (vi) Reports of searches conducted at other relevant public registries, if any. (C) The Originator (i) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association, Forms 9, 20, 24 and 49 of the Originator; (ii) A certified true copy of a board resolution of the Originator authorising, among others, the execution of the Transaction Documents (if applicable and where relevant); (iii) A list of the Originator s authorised signatories and their respective specimen signatures; (iv) A report of the winding up search conducted at the office of the Director- General of Insolvency confirming that the Originator has not been wound up. In the event the winding up search result is not available, the relevant statutory declaration of the Originator in form and substance acceptable to the Lead Arranger and Lead Manager signed by a director of the Originator declaring that the Originator is not wound up and that no winding-up petition has been presented against the Originator; and (v) Reports of searches conducted at other relevant public registries, if any. (D) General Page 16

17 (i) The approvals from the SC, Bank Negara Malaysia and any other relevant authorities; (ii) A legal opinion (in form and substance acceptable to the Lead Arranger and Lead Manager) from solicitors acting for the Lead Arranger and Lead Manager addressed to the Lead Arranger and Lead Manager and the Trustee advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents; (iii) A written confirmation (in form and substance acceptable to the Lead Arranger and Lead Manager) from the solicitors acting for the Lead Arranger and Lead Manager addressed to the Lead Arranger and the Lead Manager that all the conditions precedent have been fulfilled and where required, all the necessary Transaction Documents have been presented for registration with the relevant registries, including but not limited to the CCM and the High Court of Malaya; (iv) Confirmation that the Winding Up Reserve Account has been opened for the purposes stated herein with a Financial Institution and the particulars of such account together with the relevant acknowledgement from the Financial Institution and the particulars of the mandates have been provided by the Issuer to the Trustee, the Lead Arranger and the Lead Manager; (v) The mandate for operating the Winding Up Reserve Account has been issued in favour of the Trustee/Security Trustee as the sole signatory; and (vi) Notices of assignment of the relevant Transaction Documents have been given to the relevant counterparties in accordance with the terms of the Pool Security Deed and the relevant Series Security Deed. (vii) Any other conditions as may be advised by the solicitors acting for the Lead Arranger and Lead Manager. Conditions Precedent for the To include but not limited to the following (all have to be in form and substance acceptable to Page 17

18 issuance of each Notes Series under the MTN Programme the Lead Arranger and Lead Manager) : (A) Execution of Documents (i) The Transaction Documents (where applicable) have been signed and stamped or endorsed as exempted from stamp duty under the relevant legislation. (B) The Issuer (i) (ii) A certified true copy of a board resolution of the Issuer authorising, among others, the execution of the Transaction Documents (if applicable and where relevant); A report of the companies search conducted at the CCM confirming that there are no charges that have been registered in the CCM against the Issuer s assets save for charges registered pursuant to the Transaction Documents; (iii) A report of the winding up search conducted at the office of the Director- General of Insolvency confirming that the Issuer has not been wound up. In the event the winding up search result is not available, the relevant statutory declaration of the Issuer in form and substance acceptable to the Lead Arranger and Lead Manager signed by a director of the Issuer declaring that the Issuer is not wound up and that no winding-up petition has been presented against the Issuer; and (iv) Reports of searches conducted at other relevant public registries, if any. (C) The Originator (i) A report of the winding up search conducted at the office of the Director- General of Insolvency confirming that the Originator has not been wound up. In the event the winding up search result is not available, the relevant statutory declaration of the Originator in form and substance acceptable to the Lead Arranger and Lead Manager Page 18

19 (ii) signed by a director of the Originator declaring that the Originator is not wound up and that no winding-up petition has been presented against the Originator; and Reports of searches conducted at other relevant public registries, if any. (D) General (i) The approvals from any relevant authorities (if applicable); (ii) The Notes to be issued under the relevant Notes Series shall have received the relevant rating(s) as stated in this Principal Terms and Conditions. Alternatively, in relation to an unrated Note in a Notes Series, written confirmation from the persons to whom such Notes are to be issued that they do not require a rating and that the Notes are non-transferable and non-tradeable; (iii) The legal opinion (in form and substance acceptable to the Lead Arranger and Lead Manager) from solicitors acting for the Lead Arranger and Lead Manager addressed to the Lead Arranger and Lead Manager advising with respect to, among others, the sale of the hire purchase receivables from the Originator to the Issuer complies with true sale requirements under the ABS Guidelines; (iv) A legal opinion (in form and substance acceptable to the Lead Arranger and Lead Manager) from solicitors acting for the Lead Arranger and Lead Manager addressed to the Lead Manager and Lead Arranger and the Trustee advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents (where applicable); (v) A written confirmation (in form and substance acceptable to the Lead Arranger and Lead Manager) from the solicitors acting for the Lead Arranger and Lead Manager addressed to the Lead Arranger and the Lead Manager that all the conditions precedent have Page 19

20 been fulfilled and where required, all the necessary Transaction Documents (where relevant) have been presented for registration with the relevant registries, including but not limited to the CCM and the High Court of Malaya; (vi) Confirmation that (i) the Collection Account and (ii) if the Issuer selects under Section (E) on Applications of Funds Item (i) herein to make payment under the Reverse Pass-Through Option, the Principal Funding Account also have been opened for the purposes stated herein with a Financial Institution and the particulars of such account(s) together with the relevant acknowledgement from the Financial Institution and the particulars of the mandates have been provided by the Issuer to the Trustee, the Lead Arranger, the Lead Manager and the Servicer; (vii) The mandate for operating (i) the Collection Account and (ii) the Principal Funding Account, if applicable been issued in favour of the Trustee/Security Trustee as the sole signatory; (viii) A due diligence opinion (in form and substance acceptable to the Lead Arranger and Lead Manager) produced by the solicitors acting for the Lead Arranger and Lead Manager addressed to the Lead Arranger and Lead Manager confirming that the steps and procedures of the due diligence review on the Originator, Issuer and the Hire Purchase Receivables as set out in the due diligence planning memorandum and agreed to by the due diligence working group comply with all relevant rules and regulations; (ix) Confirmation or evidence satisfactory to the Lead Arranger and the Lead Manager that the Liquidity Facility (as defined in Section (E)(i) of this term sheet) is available; (x) Representations and warranties still remain valid, true and correct; (xi) No Event of Default has occurred and is continuing or shall occur if the Notes Page 20

21 (u) Representations and warranties Series is issued; and (xii) Any other conditions as may be advised by the solicitors acting for the Lead Arranger and Lead Manager. : The representations and warranties by the Issuer in respect of the Notes include the following: (i) The Issuer is a limited liability company duly incorporated and validly existing under the laws of Malaysia, has power to carry on its business and to own its property and assets and has complied in all material respects with all legal and regulatory requirements related to its business; (ii) The execution, delivery and performance by the Issuer of the Transaction Documents is properly authorised; (iii) The execution, delivery and performance by the Issuer of the Transaction Documents is in compliance with the law; (iv) (v) (vi) (vii) (viii) (ix) The Transaction Documents constitutes legal, valid and binding obligations of the Issuer enforceable in accordance with their terms; All filings legally required of the Issuer have been effected; The Issuer has not engaged in any activities since its incorporation other than those contemplated by the Transaction Documents; No litigation or other proceedings is in progress or pending against the Issuer; No steps for the winding-up of the Issuer have been taken; No default by the Issuer of any terms of the Transaction Documents or affecting it has occurred; (x) The Issuer has complied with all undertakings, covenants and other obligations under the Transaction Page 21

22 Documents or affecting it; (xi) (xii) All information furnished by the Issuer is true and correct and not misleading and there is no material omission from such information; There has been no adverse change in financial condition of the Issuer which may affect the success of the issue of the Notes; (xiii) No information or documents have been withheld from the Lead Arranger or the Lead Manager or the Primary Subscriber (as the case may be) which may in any way materially affect their decision to subscribe for the Notes or enter into and perform their obligations under the Transaction Documents; (xiv) The MTNs will constitute direct, unconditional and secured obligations of the Issuer, where the Class A Notes in a particular Notes Series shall at all times rank senior to the Class B Notes, Class C Notes Class D Notes and Owner s Notes of that particular Notes Series. The Class B Notes in a particular Notes Series shall at all times rank senior to the Class C Notes, Class D Notes and Owner s Notes of that particular Notes Series. The Class C Notes in a particular Notes Series shall at all times rank senior to the Class D Notes and Owner s Notes of that particular Notes Series. The Class D Notes in a particular Notes Series shall at all times rank senior to the Owner s Notes in a particular Notes Series; (xv) None of the assets, properties or rights of the Issuer are affected by any security interest other than those created under the relevant Transaction Documents; (xvi) The Issuer is conducting its business and operations in compliance with all applicable laws and regulations; and (xvii) Any other representations and warranties as may be advised by the solicitors acting Page 22

23 for the Lead Arranger and Lead Manager. (v) Events of Default : Under the Trust Deed to be entered into between the Issuer and the Trustee, the events of default will include but will not be limited to the following: (i) (ii) (iii) (iv) (v) (vi) (vii) the Issuer fails to pay any Coupon due on any of the Class A Notes, Class B Notes, Class C Notes or Class D Notes on the relevant Payment Date or any principal due on the MTNs on the relevant maturity date. Failure to pay Coupon on the Owner s Notes will not constitute an event of default save as set out below; other than in respect of its obligations under paragraph (i) above, the Issuer breaches its obligations in respect of the Notes or under any of the Transaction Documents which in the opinion of the Trustee, is incapable of remedy; or which, in the opinion of the Trustee being capable of remedy, is not remedied to the satisfaction of the Trustee within a period to be agreed; it becomes unlawful for the Issuer or the Originator to perform its obligations under the Notes or any of the Transaction Documents; the Issuer and/or the Originator repudiates any of the Transaction Documents; the Issuer ceases or fails to be the beneficial owner of the Hire Purchase Receivables, otherwise than in accordance with any of the terms of the Transaction Documents and such cessation or failure in the opinion of the Trustee, has or could have a material adverse effect on the ability of the Issuer to perform all or any of its obligations or otherwise comply with any of the terms of the Transaction Documents; a winding up order has been made against the Issuer or a resolution to wind up the Issuer has been passed; a scheme of arrangement under Section 176 of the Act has been instituted against Page 23

24 the Issuer; (viii) a receiver has been appointed over the whole or a substantial part of the assets of the Issuer; (ix) (xi) (xii) (xiii) (xiv) (xv) any other indebtedness of the Issuer becomes due and payable prior to its stated maturity or where the security created for any other indebtedness becomes enforceable; there is a revocation, withholding or modification of a license, authorisation or approval that impairs or prejudices the Issuer s or the Originator s ability to comply with the terms and conditions of any of the Transaction Documents; any of the provisions in the Transaction Documents becomes ineffective, invalid or unenforceable and in the opinion of the Trustee such event is materially prejudicial to the interests of the holders of the Notes; any misrepresentation or incorrect or misleading representation, warranty or statement is made by the Issuer under any of the Transaction Documents; the Issuer changes the nature or scope of its business, suspends or ceases or threatens to suspend or cease a substantial part of its business operations; the Issuer becomes insolvent; and (xvi) any other Events of Default as may be advised by the solicitors acting for the Lead Arranger and Lead Manager. (xvii) The holders of the Class B Notes in a particular Notes Series may only declare an Event of Default after the holders of the Class A Notes in that particular Notes Series have declared an Event of Default, or if all the Class A Notes for that particular Notes Series have been fully redeemed. Page 24

25 The holders of the Class C Notes in a particular Notes Series may only declare an Event of Default after the holders of the Class B Notes in that particular Notes Series have declared an Event of Default or if all the Class A Notes and Class B Notes for that particular Notes Series have been fully redeemed. The holders of the Class D Notes in a particular Notes Series may only declare an Event of Default after the holders of the Class C Notes in that particular Notes Series have declared an Event of Default or if all the Class A Notes, Class B Notes and Class C Notes for that particular Notes Series have been fully redeemed. The holders of the Owner s Notes in a particular Notes Series may only declare an Event of Default after the holders of the Class D Notes in a particular Notes Series have declared an Event of Default or if all the Class A Notes, Class B Notes, Class C Notes and Class D Notes for that particular Notes Series have been fully redeemed. For a particular Notes Series, any action taken by the holders of any higher ranking Notes shall bind the holders of any lower ranking Notes. Any decision to enforce any rights under the Pool Security Deed shall be taken by the holders of the most senior class of Notes in any Notes Series. Any decision to enforce any rights under each Series Security Deed relating to a Notes Series shall be made by the holders of the most senior Notes comprised in that Notes Series. Save for the failure to pay Coupon on Owner s Notes: (i) on the relevant maturity date of the Owner s Notes; or (w) Principal terms and conditions for warrants (where (ii) on any Payment Date after the Notes ranking ahead of Owner s Notes of the relevant Notes Series have been fully redeemed, failure to pay Coupon on the relevant Payment Date is not an Event of Default : Not applicable Page 25

26 (x) applicable) Other principal terms and conditions for the issue : Please refer to following sections as set out below: (A) Further details of the Notes; (B) The Hire Purchase Receivables; (C) Sale of the Hire Purchase Receivables; (D) Servicing; (E) Application of Funds; (F) Details of the Interest Rate Swap Arrangement; (G) Notes Series 2007-A; (H) Transaction Documents. (A) Further details of the Notes (i) Ranking/Status : The Class A Notes will constitute direct, unconditional, unsubordinated and secured obligations of the Issuer limited in recourse to the relevant Hire Purchase Receivables Series and any assets relating thereto or derived therefrom and shall at all times rank pari passu without discrimination, preference or priority among themselves, and at least pari passu with all its other senior, unsecured obligations, subject to payments preferred under law and in the Transaction Documents. The Class A Notes in a particular Notes Series will rank senior to the Class B Notes, Class C Notes, Class D Notes and Owner s Notes of the same Notes Series. The Class B Notes will constitute direct, unconditional, subordinated and secured obligations of the Issuer limited in recourse to the relevant Hire Purchase Receivables Series and any assets relating thereto or derived therefrom and shall at all times rank pari passu without discrimination, preference or priority among themselves, and at least pari passu with all its other senior, unsecured obligations, subject to payments preferred under law and in the Transaction Documents. The Class B Notes in a particular Notes Series will rank senior to the Class C Notes, Class D Notes and Owner s Notes of the same Notes Series. The Class C Notes will constitute direct, unconditional, subordinated and secured obligations of the Issuer limited in recourse to the relevant Hire Purchase Receivables Series and any assets relating thereto or derived therefrom and shall at all times rank pari passu without Page 26

27 discrimination, preference or priority among themselves, and at least pari passu with all its other senior, unsecured obligations, subject to payments preferred under law and in the Transaction Documents. The Class C Notes in a particular Notes Series will rank senior to the Class D Notes and Owner s Notes of the same Notes Series. The Class D Notes will constitute direct, unconditional, subordinated and secured obligations of the Issuer limited in recourse to the relevant Hire Purchase Receivables Series and any assets relating thereto or derived therefrom and shall at all times rank pari passu without discrimination, preference or priority among themselves, and at least pari passu with all its other senior, unsecured obligations, subject to payments preferred under law and in the Transaction Documents. The Class D Notes in a particular Notes Series will rank senior to the Owner s Notes of the same Notes Series. The Owner s Notes will constitute direct, unconditional, subordinated and secured obligations of the Issuer limited in recourse to the relevant Hire Purchase Receivables Series and any assets relating thereto or derived therefrom and shall at all times rank pari passu without discrimination, preference or priority among themselves, and at least pari passu with all its other senior, unsecured obligations, subject to payments preferred under law and in the Transaction Documents. (ii) Availability Period : The availability period for the issue of the Notes will be ten (10) years from the date the relevant conditions precedent under the Transaction Documents have been complied with and the Transaction Documents have been executed, provided that the first issuance of the Notes shall be within six (6) months from the date of the SC s approval or such other longer period as may be allowed by the SC. (iii) Early Amortisation Events : In respect of any Notes Series, if any of the following events (each, an Early Amortisation Event ) occurs and is declared: (a) the basis of taxation submitted to the tax authorities is disputed by the tax authorities, which the Trustee deems could result in significant additional tax Page 27

28 assessments payable and notwithstanding any objection lodged by the Issuer; (b) any: (1) material breach of representation or warranty or failure to perform or observe any term or covenant made by the Originator or the Servicer in the relevant Transaction Documents; or (2) information required to be given by the Originator or Servicer to the Issuer proves to have been incorrect or misleading in any material respect when made or delivered, and such breach or failure or incorrect or misleading information continues for a period of thirty (30) days after the earlier of discovery thereof by the Originator or receipt of written notice thereof from the Issuer, the Trustee or the Security Trustee; (c) (i) failure on the part of the Servicer to make any payment or deposit required under relevant Transaction Documents within three (3) Business Days after the day such payment or deposit is required to be made or (ii) failure on the part of the Originator or the Servicer to observe or perform any other covenant or agreement of the Originator or the Servicer set forth in the relevant Transaction Documents and, if capable of being remedied, continues unremedied for a period of twenty (20) Business Days after the earlier of discovery thereof by the Originator or the Servicer or receipt of written notice thereof from the Issuer, the Trustee or the Security Trustee; (d) (e) the Issuer shall for any reason fail to have a valid ownership interest in the Hire Purchase Receivables and the proceeds thereof, free and clear of all liens, security interests, charges, encumbrances or adverse claims, except as provided in the Transaction Documents; either of the Originator or the Servicer shall enter into any transaction or merger Page 28

29 whereby it is not the surviving entity and the surviving entity either (1) fails to assume all of the obligations of the Originator or the Servicer (as applicable) under any of the Transaction Documents to which its predecessor was a party by operation of law or pursuant to an agreement satisfactory to the Trustee, acting reasonably or (2) has a creditworthiness which is materially weaker than that of its predecessor and which the rating agency had indicated would result in the downgrade of the then credit ratings of the most senior MTNs of any outstanding Notes Series; (f) any material adverse change in the financial condition or operations of the Originator or the Servicer or any other event which materially and adversely affects the Originator s or Servicer s ability to either collect Hire Purchase Receivables arising under the relevant hire purchase agreements or its obligations to perform under the Transaction Documents, in each case in the sole discretion of the Trustee; (g) in the sole discretion of the Trustee, there occurs an event which is likely to materially and adversely affect the transactions contemplated by the Transaction Documents; (h) (i) (j) on any Payment Date, failure of the Issuer to repay all amounts due and owing in respect of the Liquidity Facility; on any Payment Date, failure of the Issuer to meet the (i) Scheduled Principal Balances as set out in the relevant Transaction Documents or (ii) in the event the Issuer selects under Section (E) on Applications of Funds Item (i) herein to make payment under the Reverse Pass- Through Option, the Required Scheduled Principal Buildup, as set out in the relevant Transaction Documents; any other criteria specific to a Notes Series as may be specified in the terms and condition applicable to that Notes Series; Page 29

30 and (k) any other criteria as may be advised by the solicitors acting for the Lead Arranger and the Lead Manager, then all moneys in relation to that Notes Series shall be applied in the manner provided for under the section Application of Proceeds Early Amortisation Events in Section (E) of this Principal Terms and Conditions. The occurrence and declaration of an Early Amortisation Event in respect of any Notes Series shall not in itself be an Early Amortisation Event on any other Notes Series. (iv) Transferability : The Notes (if rated) are transferable, but subject to the selling restrictions set out in Section 2 Item (p) on Selling Restriction of this Principal Terms and Conditions. (v) Repurchase : The Issuer shall not be entitled to purchase the Notes or otherwise acquire the Notes, whether in the open market or otherwise. (vi) Taxation : All payments by the Issuer shall be made without 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. The Issuer shall not be required to gross up in connection with such withholding or deduction. (vii) Due Diligence : The Lead Arranger and/or the Lead Manager will arrange for a due diligence investigation and the obligations of the Lead Arranger and/or the Lead Manager in this term sheet are subject to the successful completion of such due diligence and the results being satisfactory to the Lead Arranger and/or the Lead Manager. In this context, the solicitors and the auditors/tax advisers shall be required to provide a letter to the Lead Arranger and the Lead Manager in form and substance acceptable to the Lead Arranger and Lead Manager confirming that it may rely upon such opinions to establish its due diligence in connection with this transaction. (viii) Adverse Market : From the date a formal offer is made by the Lead Manager until the first issue date of the Notes and, for subsequent issuance of the Notes, prior to the respective issuance dates, the Lead Page 30

31 Manager retains the right to amend, withdraw and/or terminate the offer if there occurs any event or circumstance which, in the opinion of the Lead Manager, may materially and adversely affect any of the international and domestic money, capital or syndicated loan markets, the business activities of the Issuer and/or the Originator and/or any of its subsidiaries and/or associated companies and/or the social, political, financial and/or economic situation in Malaysia. (ix) Clear Market : For the first issuance of the Notes, from the date a formal offer is made by the Lead Manager until the expiry of thirty (30) days after the first issuance of the relevant Notes, and for the subsequent issuance of the Notes during the period commencing thirty (30) days before the relevant issuance date and ending thirty (30) days after the relevant issuance date, the Issuer and/or the Originator shall ensure that no other borrowings, debt instruments or securities issued and/or guaranteed by the Issuer and/or the Originator and/or any of its subsidiaries and associated companies are mandated, syndicated or privately placed which may, in the opinion of the Lead Manager, have the effect of prejudicing the successful completion of this transaction and the placement and/or selling down of the relevant Notes. (x) Other Expenses : All costs, charges and expenses including trustee and security trustee fees, legal and other professional fees, rating fees, stamp duties, penalties, BNM transaction charges, SC processing fees, filing fees and other incidental expenses are for the account of the Originator, even if the issue of the Notes are subsequently aborted for any reason whatsoever. (xi) Governing law and jurisdiction : The Notes and the Transaction Documents will be governed by the laws of Malaysia and the parties thereto will submit to the exclusive jurisdiction of the Malaysian courts. (xii) Limited recourse : The MTNs are issued on a limited recourse basis. This means that holders of the MTNs will have only the benefit of the specifically-identified Hire Purchase Receivables Series and the collections from or proceeds of realisation thereof, including amounts standing to the credit of the relevant Collections Account and, if applicable, all amounts standing to the credit of the relevant Principal Funding Account and all rights of the Issuer under the Transaction Documents, to satisfy their right to receive coupon payments and redemption of the Page 31