PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL. i) Name Bintang Bulk Mover Sdn Bhd ( BBMSB or Issuer )

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1 BINTANG BULK MOVER SDN BHD RM50.0 Million Secured Serial Bonds REVISION DATE : 2 APRIL 2009 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL BACKGROUND INFORMATION 1(A) Issuer i) Name Bintang Bulk Mover Sdn Bhd ( BBMSB or Issuer ) ii) Address No 1, Jalan Indah Satu, Taman Rawang Indah, Off Rawang Intergrated Industrial Rawang, Selangor Darul Ehsan iii) iv) Business Registration No. Date/Place of Incorporation D 20 January 1993 / Malaysia v) Date of Listing Not listed vi) Status Resident controlled company Non Bumiputera controlled company vii) Principal Activities Provision of transportation services viii) Board of Directors As at 30 November Yap Hock Sing (Managing Director) 2. Yap Hock Tian (Executive Director) 3. Yap Koon Huat (Executive Director) 4. Ahmad Shalimin bin Ahmad Shaffie (Executive Director) ix) Structure of Shareholding and Names of Shareholders as at 30 November 2003 Type of Shares Ordinary Name of Shareholder Yap Hock Sing No of Shares % 750, Ordinary Yap Hock Tian 250,

2 TOTAL 1,000, Note: The shareholders above (as Vendors) have entered into a share sale agreement dated with PWE Industries Bhd and Bintang Mover Bhd ( Newco ) pursuant to a corporate restructuring exercise whereby the Vendors have agreed to sell to Newco and the Newco has agreed to purchase the entire shareholding in BBMSB free from encumbrances for the purchase consideration of RM95,117, subject to the terms and conditions therein. The sale and purchase of the shares in BBMSB is subject to, inter alia, the approval from the Foreign Investment Committee ( FIC ) and the Securities Commission ( SC ) for the proposed corporate restructuring. The sale and purchase agreement is pending fulfilment of the conditions precedent. x) Authorised and Paid- Up Capital Type of Shares Authorised No of Shares Authorised Capital (RM) Paid-up Capital (RM) Ordinary shares of RM1 each 5,000,000 5,000,000 1,000,000 PRINCIPAL TERMS AND CONDITIONS 2. Names of Parties in the Proposed Transaction (where applicable) i) Principal Adviser(s) / Lead Arranger(s) KAF Discounts Berhad ( KAF ) ii) Arranger(s) Not applicable iii) Valuers Not applicable iv) Solicitors Albar & Partners v) Financial Adviser Not applicable vi) Technical Adviser Not applicable vii) Guarantor viii) Trustee Kindly refer to item 12 (f) Mayban Trustees Berhad ( MTB ) ix) Facility Agent KAF 2

3 x) Primary Subscriber(s) and Amount subscribed Subscriber Alliance Merchant Bank Bhd Amount RM50.0 million xi) Underwriter(s) and amount underwritten Not applicable xii) Syariah Adviser xiii) Central Depository xiv) Paying Agent Not applicable Bank Negara Malaysia ( BNM ) BNM xv) Reporting Accountant Deloitte & Touche xvi) Others MTB has been appointed to act as a Security Agent for the Bonds 3. Principle Conventional 4. Facility Description Fixed Rate Secured Serial Bonds ( Bonds ) 5. Issue Size RM50.0 million divided into three (3) tranches. Tranche Tenure Amount I 3 years RM15.0 million II 4 years RM15.0 million III 6 years RM20.0 million 6. Issue Price RM50.0 million (to be issued at par) 7. Tenor of the facility/issue Up to six (6) years from issue date of the Bonds ( Issue Date ). Tranche Tenure Amount I 3 years RM15.0 million II 4 years RM15.0 million III 6 years RM20.0 million 8. Interest / Coupon/Profit or equivalent rate Tranche Tenure Coupon I 3 years 8.75% per annum II 4 years 9.00% per annum 3

4 III 6 years 9.25% per annum 9. Interest/Coupon/Profit Payment frequency 10. Interest/Coupon/Profit Payment basis 11. Yield to Maturity Revised from semi-annually to quarterly with effect from 2 nd April 2009 payable on the following dates:- (1) 2 nd July 2009 (2) 2 nd October 2009 (3) 4 th January 2010 (4) 2 nd April 2010 Actual/365 days basis Tranche Tenure Yield to Maturity I 3 years 8.75% per annum II 4 years 9.00% per annum III 6 years 9.25% per annum 12. Security/Collateral (if any) The Bonds shall be secured against the following: a) Assignment of the Issuer s rights interest title and benefit in each of the Transport Agreements entered into by the Issuer with Simen Utama Sdn Bhd and Transporter s Agreement entered into by the Issuer and Perak Hanjoong Simen Sdn Bhd (Simen Utama Sdn Bhd and Perak Hanjoong Simen Sdn Bhd are collectively referred to as Identified Companies ). Proceeds from the Identified Companies which are assigned shall be credited and/or caused to be credited by the Issuer into Revenue Account I ( RA I ); b) Assignment of proceeds by each of the Issuer s subsidiary companies, Agenda Wira Sdn Bhd ( AWSB ), Jitu Transport Sdn Bhd ( JTSB ) and Panglima Klasik Sdn Bhd ( PKSB ) (collectively referred to as Security Parties ) assigning its rights interest and benefits from the hiring of trucks and trailers. Proceeds from such hiring of trucks and trailers which are assigned shall be credited and/or caused to be credited by the Security Parties into Revenue Account II ( RA II ); 4

5 c) Assignment of BBMSB s/security Parties rights interest title and benefit in the Facility s Designated Accounts ( FDA ) and all monies standing to the credit of the FDA; d) Debenture covering a first fixed and first floating charge on all the present and future assets of the Issuer; e) Assignment of the necessary insurances (including coverage on force majeure); f) Joint and several personal guarantee of Yap Hock Sing (NRIC No ), Yap Hock Tian (NRIC No ), Yap Koon Huat (NRIC No ) and Datuk Ahmad Shalimin Bin Ahmad Shaffie (NRIC No ); and g) First party first legal charge ( Charge ) under the National Land Code over lands held under the following issue documents of titles as below: Title No. Lot/PT No. Geran 22673* Lot 1241 Geran Lot Geran Lot Geran Lot all of which situated in Mukim Rawang, Daerah Gombak, Negeri Selangor Darul Ehsan. *Note : A portion of the said land under title number Geran which is under lease in favour of Tenaga Nasional Berhad ( TNB ) is excluded from the Charge. Consent has been sought from TNB to lodge the Charge on the said land and pending the receipt of consent from TNB, a private caveat has been lodged on the said land in favour of the Security Agent. 5

6 13. Details on utilisation of proceeds The proceeds from the Bonds shall be utilised for the following purposes: a) Firstly, to refinance BBMSB s existing bank borrowings ( Existing Borrowings ) as follows:- (i) (ii) (iii) the amount of up to RM20.0 million to refinance the overdraft facility of RM5.0 million and the term loan facility of RM15.0 million granted by Alliance Bank Malaysia Berhad ( ABMB ) to BBMSB; the amount of up to RM2.0 million to refinance the Term Loan I Facility of RM2.0 million granted by Alliance Finance Berhad ( AFB ) to BBMSB; the amount of up to RM3.0 million to refinance the overdraft facility of RM3.0 million, granted by HSBC Bank Berhad ( HSBC ) to BBMSB; b) Secondly, for payment of the coupon of the Bonds which will become due and payable six (6) months after the issue date of the Bonds amounting to RM2,256,250.00; c) Thirdly, for payment professional fees and other related costs relating to the issuance of the Bonds of up to RM429,500.00; d) Fourthly, to refinance BBMSB s existing hire purchase with various finance companies of up to RM2,250,000.00; e) Fifthly, to refinance AWSB s existing hire purchase with various finance companies of up to RM16,500,000.00; and f) Lastly, whatever balance remaining from the Bonds proceeds shall be utilised for payments to the sellers of new trucks (including but not limited to prime movers, cargo trailers and tankers) for the purchase of such new trucks. 14. Sinking fund (if any) The Issuer is required to establish and maintain the following Facility Designated Accounts ( FDA ) with a licensed Bank:- 1. Disbursement Account ( DA ); 2. Revenue Account I ( RA I ); 3. Revenue Account II ( RA II ); 4. Operating Account I ( OA I ); 6

7 5. Operating Account II ( OA II ); 6. Debt Service Reserve Account ( DSRA ); and 7. Sinking Fund Account ( SFA ) 1. Disbursement Account ( DA ) A DA shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of the Issuer, wherein the proceeds from the issuance of the Bonds shall be initially remitted. The amount remitted shall be after taking into account the following: a) Amount required to repay the Issuer s Existing Borrowings; b) Amount required to be maintained in the DSRA; and c) Payment of fees and other related costs relating to the issuance of the Bonds. Drawings from the DA for (i) the refinancing of BBMSB s existing hire purchase as at of up to RM2,250, and (ii) the refinancing of AWSB s existing hire purchase as at of up to RM16,500, shall be made within three (3) business days written notice or such other period as may be agreed by the Security Agent, where such notices shall be accompanied by relevant redemption statements acceptable to the Security Agent. Drawings from the DA for payments to the seller of the new trucks shall be made within three (3) business days written notice or such other period as may be agreed by the Security Agent, where such notice shall be accompanied by relevant invoices acceptable to the Security Agent. The margin of financing of such invoices shall be up to 80% of each invoice. Pending any drawings from the DA, monies standing to the credit of the DA may be invested in Permitted Investments (hereinafter defined). The DA shall be operated/managed solely by the Security Agent. 7

8 2. Revenue Account I ( RA I ) RA I shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of the Issuer, wherein all revenues (including payments pursuant to the Transport Agreements and the Transporter s Agreement) received from: a) Identified Companies; b) any hiring arrangements of trucks by the Issuer to any person or body corporate done on an ad hoc basis; and c) any other revenues received by the Issuer; shall be credited into RA I. The monies in RA I shall be applied in the following manner: a) 80% of the revenues received from Identified Companies, the hiring arrangements of the trucks by the Issuer done on an ad hoc basis and any other revenues arising from the Issuer s core businesses shall be disbursed into OA I, and the balance of 20% of the revenues shall be credited firstly into the DSRA to meet the Amended Required Amount (as referred to in section 6 below) and the remaining balance of the 20% of the revenues (if any) shall be credited into the SFA. b) All revenues received from the Issuer s non-core businesses shall be used towards funding the DSRA and SFA as above. RA I shall be operated/managed solely by the Security Agent. 3. Revenue Account II ( RA II ) RA II shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of AWSB, wherein: a) All revenues received from the hiring of trucks and trailers by each of the Security Parties; and b) any other revenues received by the Security Parties; shall be credited into RA II. The monies in RA II shall be applied in the following manner: a) 90% of the revenues received from the hiring of trucks and trailers by each of the Security Parties and any other revenues received by the Security Parties shall be disbursed into OA II, and the balance of 10% of the revenues shall be credited 8

9 firstly into the DSRA to meet the Amended Required Amount (as referred to in section 6 below) and the remaining balance of the 10% of the revenues (if any) shall be credited into the SFA. b) All revenues received from the Security Parties non-core businesses shall be used towards funding the DSRA and SFA as above. RA II shall be operated/managed solely by the Security Agent. 4. Operating Account I ( OA I ) OA I shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of the Issuer, and shall be operated/managed solely by the Issuer unless an Event of Default has been declared. Upon declaration of Event of Default, OA I shall be managed by the Security Agent. This account shall take care of the operating cost of the Issuer. At the end of each financial year, any amounts standing to the credit of the OA I in excess of the budgeted costing shall, for so long as monies standing to the credit of the SFA is less than the Maximum Sinking Fund Amount (hereinafter defined), be treated as surpluses and shall be directly remitted into the SFA. 5. Operating Account II ( OA II ) OA II shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of AWSB, and shall be operated/managed solely by AWSB unless an Event of Default has been declared. Upon declaration of Event of Default, OA II shall be managed by the Security Agent. This account shall take care of the operating cost of AWSB. At the end of each financial year, any amounts standing to the credit of OA II in excess of the budgeted costing shall, for so long as monies standing to the credit of the SFA is less than the Maximum Sinking Fund Amount (hereinafter defined), be treated as surpluses and shall be directly remitted into the SFA. 6. Debt Service Reserve Account ( DSRA ) A DSRA shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of the Issuer. 9

10 On or before a date falling one (1) month prior to each coupon payment date, the Issuer is to maintain an amount which is equal to the coupon payable on the outstanding Bonds on the said forthcoming coupon payment date ( Amended Required Amount ). The amounts in the DSRA shall be permitted to be utilized for the following purposes:- a) Coupon payment due under the Bonds; b) Permitted Investment(s) The maturity profile of any Permitted Investment(s) shall not exceed the maturity profile of the coupon(s) due under the Bond(s) and may be liquidated for the purpose of item a) above; and c) Withdrawal of such monies in excess of the Amended Required Amount and standing to the credit of the DSRA to be credited into the Sinking Fund Account. The DSRA shall be operated/managed solely by the Security Agent. 7. Sinking Fund Account ( SFA ) A SFA shall be established with a financial institution licensed under the Banking and Financial Institutions Act 1989 in the name of the Issuer, where the account will capture and accumulate the funds from RA I and RA II to the extent provided in the application of monies of RA I and RA II described above. To maintain in the Sinking Fund Account an amount equal to at least Ringgit Malaysia One Million and Five Hundred Thousand (RM1,500,000.00) or an amount equal to the principal outstanding of the Bonds (in the case where the principal outstanding of the Bonds is less than Ringgit Malaysia One Million and Five Hundred Thousand (RM1,500,000.00)), as the case may be, by no less than 10 business days prior to each coupon payment date and shall on each coupon payment date utilize or permit the Security Agent to utilize an amount of no less than Ringgit Malaysia One Million and Five Hundred Thousand (RM1,500,000.00) or an amount equal to the principal outstanding of the Bonds (in the case where the principal outstanding of the Bonds is less than Ringgit Malaysia One Million and Five Hundred Thousand (RM1,500,000.00)), as the case may be, standing to the credit of the Sinking Fund Account (subject to a minimum denomination of RM100,000) towards partial or full payment of the outstanding Bonds. 10

11 All amounts in the SFA shall only be permitted to be utilized for the following purposes:- (i) Redemption of the outstanding Bonds upon maturity; (ii) Permitted Investment(s). The maturity profile of any Permitted Investment(s) shall not exceed the maturity profile of the Bond(s) and may be liquidated for the purpose of item (i) above; (iii) (iv) Partial redemption of the outstanding Bonds on a coupon payment date; and Early full redemption of the outstanding Bonds on any business day. The SFA shall be operated/managed solely by the Security Agent. By virtue of the assignment, the holders of the Bonds ( Bondholders ) shall have priority in respect of amounts standing to the credit of all the FDA, followed by other creditors of the Issuer. 15. Rating 15.1 Credit Rating Assigned [Please specify if this is an indicative rating] 15.2 Name of Rating Agency Not applicable Not applicable 16. Form and Denomination Form The Bonds shall be issued in a non-bearer form (scripless) in accordance with the Code of Conduct and Market Practices for Scripless Securities Trading System by BNM, and the Malaysia Scripless Securities Market under the Real Time Electronic Transfer of Funds and Securities ( RENTAS ) system, or their respective replacements applicable from time to time. Denomination The Bonds shall be in denomination of RM100,000 or such other denominations in accordance with the Rules on Fully Automated System for Tendering ( FAST ) issued by BNM. 11

12 17. Mode of Issue Bought deal arrangement without prospectus to be entered between BBMSB and Primary Subscribers. The Bonds will be issued at par. The Bonds be reported under FAST in accordance with the Rules on FAST. The Bonds shall not be tendered under FAST. 18. Selling Restrictions The Bonds are not transferable or tradeable. As such, no Bondholder is permitted to sell, transfer or otherwise dispose of all or any part of its legal or beneficial interest in any of the Bonds to any person. 19. Listing Status Not listed 20. Minimum Level of Subscription (RM or %) 21. Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained 100% None 22. Additional information for Islamic PDS: Islamic principle Identified assets Purchase and selling price/rental Not applicable. Not applicable. Not applicable. 23. Conditions Precedent Including but not limited to the following: a) Receipt of a certified true copy of BBMSB s Memorandum and Articles of Association, Form 24, Form 44, Form 49 and Board Resolution authorising: i) acceptance of the Bonds facility; and ii) officer(s) of BBMSB s to execute the documents relating to the Bonds ( Issue Documents ) together with his/their specimen signature(s). b) Receipt of a certified true copy of each of the Security Parties Memorandum of Association, 12

13 Form 24, Form 44, Form 49, Board Resolution and Shareholders Resolution authorising the creation and execution of the assignment of proceeds of the hiring of trucks and trailers and the assignment of RA II referred to in item (b) and (c) respectively under heading Security/Collateral above; c) Receipt of approval from SC and other relevant authorities for the issuance; d) Satisfactory completion of Due Diligence; e) Receipt of evidence that all fees, stamp duties (if applicable) and other expenses incidental to all documents relating to the Bonds have been paid; f) Satisfactory legal opinion from the Solicitors as to the validity and enforceability of all legal documents. g) Satisfactory completion of all relevant legal documentation to the satisfaction of KAF and Primary Subscriber; h) The Bonds has a long-term rating of A- (single A minus) by MARC at the point of first issuance; i) Confirmation that no event of default has occurred or is continuing or will occur as a result of issuance of the Bonds; j) The original registration cards in respect of new trucks acquired by the Issuer (and which acquisition is funded by the proceeds arising from the Bonds) containing an endorsement of ownership claim in favour of the Security Agent shall be deposited with the Security Agent; and k) The letters of undertaking from the existing lenders of BBMSB being ABMB, AFB and HSBC whereby the existing lenders shall undertake to release the securities currently held by them and to execute the necessary discharge documents upon their receipt of the relevant redemption sum of the Existing Borrowings. 24. Representation and Warranties Representations and warranties typical of such issues including but not limited to the following:- a) BBMSB and each Security Party are companies duly incorporated with limited liability and validly existing under the laws of Malaysia; 13

14 b) the memoranda and articles of association of the Issuer and each Security Party incorporate provisions which authorise, and all necessary corporate action has been taken to authorise, and all licenses and authorisations of governmental or other authority have been duly and unconditionally obtained and are in full force and effect to authorise, the Issuer and each Security Party to own their assets and to carry on their business; c) the execution, delivery and performance by BBMSB and each Security Party of the Issue Documents to which they are a party are properly authorised; d) the execution, delivery and performance by BBMSB and each Security Party of the Issue Documents to which they are a party are in compliance with law; e) all registrations and filings required of BBMSB and the Security Party have been effected; f) the Issue Documents constitute legal, valid and binding obligations of BBMSB and the Security Party to which they are a party; g) no event has occurred which constitutes, or which with the giving of notice and/or the lapse of time and/or a relevant determination would constitute, a contravention of, or default under, any agreement or instrument by which BBMSB or any Security Party or any of its assets is bound or affected, being a contravention or default which might either have an effect on the business, assets or financial condition of BBMSB or any Security Party or affect BBMSB's or any such Security Party s ability to perform its obligations under the Issue Documents in accordance with their terms; h) no litigation, arbitration or administrative proceeding or claim which might by itself or together with any other such proceedings or claims either have an effect on the business, assets or condition of BBMSB or any Security Party or affect BBMSB's or any such Security Party s ability to perform its obligations under the Issue Documents in accordance with their terms, is presently in progress or pending or threatened against BBMSB or any Security Party or any of its assets; i) all necessary returns have been delivered by or on behalf of BBMSB to the relevant taxation authorities and BBMSB is not in default in the payment of any taxes and no claim is being asserted with respect to taxes which is not 14

15 disclosed in its financial statements; j) all information furnished by BBMSB is true and correct and not misleading and does not contain any material omission; k) there are no material adverse changes in the business activities or financial condition or results of operations of BBMSB or any of the Security Party; l) each of the Transport Agreements is validly existing, binding and enforceable; m) each of the trucks and trailers owned by BBMSB and the Security Parties is properly licensed including but not limited to licence issued by the Commercial Vehicle Licensing Board pursuant to the Commercial Vehicle Licensing Act Events of Default The following shall become an automatic event of default: a) BBMSB fails to pay, when due, any sum payable by it in accordance with the terms of the Facility (other than the payment obligations towards meeting the required coupon payment amount in the DSRA and the payment obligation to maintain the required redemption amount in the SFA). The Bondholders (majority) shall have the right to declare Event of Default if one or more of the following events should occur: a) BBMSB is unable to pay any of its debts, other than the Bonds, as and when they become due and payable prior to their stated maturity; b) BBMSB and/or any of the Security Parties fail to observe or perform any of their respective obligations (including but not limited to the payment obligations towards meeting the required coupon payment amount in the DSRA and the payment obligation to maintain the required redemption amount in the SFA) under the Financing Agreements and which is capable of being remedied and is not remedied to the satisfaction of the Bondholders acting by Special Resolution within thirty (30) days after BBMSB became aware or having been notified of such failure; c) The making of any representation and warranty which is incorrect in any material respect; d) Any present or future security on or over the assets of BBMSB and/or any of the Security Parties 15

16 becomes enforceable; e) Any insolvency, administrative or winding up action being taken against BBMSB and/or any of the Security Parties or the Identified Companies; f) A scheme of arrangement under Section 176 of the Companies Act 1965 has been instituted against BBMSB and/or any of the Security Parties or the Identified Companies; g) A receiver has been appointed over the whole or a substantial part of the assets of BBMSB and/or any of the Security Parties; h) There is s revocation withholding or modification of any licences, permits, authorisations, or approvals that may impair or prejudice BBMSB s and/or any of the Security Parties ability to comply with the terms and conditions or perform any of its obligations under the Issue Documents in accordance with the terms thereof; and i) Usual cross default clauses for issues of this nature. 26. Principal terms and conditions for warrants 27. Other principal terms and conditions for the issue Not applicable Early Redemption The Issuer may early redeem in full the outstanding Bonds on any business day provided that the Issuer has given a written notice (which when given, shall be irrevocable) of at least ten (10) Business Days to the Trustee, the Facility Agent and the Security Agent stating the proposed date of early redemption. Affirmative Covenants So long as any commitment under the Bonds remains outstanding, the Issuer shall: a) Comply with all provisions under the Transport Agreements, the Transporter s Agreement and Issue Documents; b) Provide interim unaudited financial statements and annual consolidated audited financial statements not later than 90 days and 180 days from the end of the relevant six monthly financial period and financial year respectively, and/or other information that the Trustee may reasonably request; c) Prepare a budgeted costing to ascertain the 16

17 requirement of funds for the operations. The budgeted costing shall be prepared on an annual basis, commencing from 6 months after the first issuance of the Bonds, or such other date as required by the Security Agent and shall be approved by the Issuer s external auditor and/or any independent auditor; d) Subordinate any shareholders advances or loans to the obligations arising from the Bonds; e) Undertake to preserve and keep in force and effect all licenses, permits, approvals and rights necessary for the conduct of the Issuer s businesses; f) Take out and maintain and ensure the relevant parties to take out and maintain the necessary insurance policies (during the periods in which such policies are relevant) and notify of any event which will or may give rise to any claim or right of action under the insurances; g) Notify the Trustee of the occurrence of any Event of Default or Potential Event of Default immediately upon becoming aware of it and will from time to time on request to deliver to the Trustee a certificate confirming that no Event of Default or Potential Event of Default has occurred and is continuing or if a Event of Default or Potential Event of Default has occurred, set out the details of the Event of Default or Potential Event of Default and the action taken or proposed to be taken to remedy it; h) Issue all required invoices and /or bills promptly to the Identified Companies and such other hiring parties and will use all reasonable endeavours to collect and get in all moneys becoming due to the Issuer; i) Ensure that staffs and personnel employed are properly skilled, qualified and experienced to perform the functions that they are appointed to perform; j) Use all reasonable endeavours to ensure that all business activities are planned and operated in accordance with sound commercial and financial standards and practices, and in accordance with any agreement entered into by BBMSB with relevant parties; k) Make payment of all taxes, fees and other dues to the relevant authorities; l) Maintain all material contracts necessary for the 17

18 conduct of its business and all relevant authorisations, consents, rights, licences, approval and permits (governmental and otherwise) and shall promptly obtain any further authorisations which may become necessary to enable it to own its assets, carry on its business and perform its obligations under the Issue Documents; and m) Credit and/or cause to be credited all monies received by the Issuer from the hiring arrangements of the trucks done on an ad hoc basis into RA I and/or RA II; Negative Covenants The Issuer shall not without the prior written consent of the majority Bondholders: a) Create or permit to subsist any other security interests other than those arising out of any arrangement entered into by the Issuer for the provision of performance and maintenance of the Bonds; b) Reduce its authorised and issued paid-up capital and register or permit any change in its existing shareholders or their respective shareholdings in BBMSB as at the date hereof; c) Surrender, transfer, assign, relinquish or otherwise dispose any of its rights and interest under the Transport Agreements, the Transporter s Agreement and Issue Documents; d) Make or permit to exist loans or advances to any of its shareholders or directors; e) Incur, assume or permit to exist any indebtedness other than the indebtedness under the Bonds except any advances made to the Issuer by the directors or shareholders of the Issuer which are subordinated; f) Amend any provisions of its Memorandum or Articles of Association, which may have a material adverse effect on the Issuer s ability to meet its obligations under the Bonds; and g) Declare or pay out any dividend on share capital including preference shares and/or interest on subordinated advances/loan stocks. Financial Covenants a) A minimum Debt Service Cover Ratio ( DSCR ) of 1.75 times (x) at each Calculation Date (as defined below). DSCR is defined as the ratio of cumulative 18

19 Available Cash Flow to the aggregate of all financing costs incurred by the Issuer and any principal amounts repaid under any of the indebtedness arising from borrowed moneys (including capital market instruments) of the Issuer, each during the previous 12 months. The Calculation Date shall be on a date to be advised by the Trustee and each of the dates falling on the anniversary dates of the first issuance of the Bonds or such other date as required by Trustee. The DSCR, the calculation of this ratio and the relevant information used in the calculation shall have been verified by the Issuer s auditors prior to the Issuer submitting such information to the Trustee. b) A maximum Debt to Equity ratio of 2.00 times (x) during a period of two (2) years from the Issue Date of the Bonds, 1.75 times (x) during the third (3 rd ) year of the Bonds and thereafter a ratio of 1.50 times (x) throughout the tenure of the Bonds. Debt to Equity ratio is defined as the ratio of the Issuer s Debt to the aggregate of the Issuer s paidup ordinary shares, loan stock, subordinated shareholders advances and retained earnings. Debt shall includes, without limitation the following: i) the principal amount (together with any fixed or minimum premium payable on final repayment) for the time being owing by the Issuer in respect of any loan, debenture, debenture stock, credit facilities, borrowing or any other instrument creating or evidencing the Issuer s borrowing but so that in the case of a debenture, debenture stock, bond, or other instruments created or evidencing collateral security for such Issuer s borrowing, the amount to be taken into account shall be the principal amount thereof or the amount for the time being outstanding of the borrowing or indebtedness collaterally secured whichever is the higher but shall exclude all loans and/or advances from its shareholders; ii) in the case of counter indemnity with respect to any guarantee facility provided to the Issuer in relation to advances made to the Issuer, the amount to be taken into account shall be the principal amount of the advances made to the Issuer and not repaid; iii) the principal amount payable in respect of any overdraft or other similar indebtedness of the Issuer; iv) amounts raised by the Issuer by acceptance 19

20 under any acceptance credit opened on its behalf and the principal amount recoverable from the Issuer in respect of bills or receivables discounted; v) amounts raised by the Issuer by factoring its hire-purchase receivables or with recourse and financial leases; and vi) the amount payable by the Issuer pursuant to or in connection with long term debt instrument (including but not limited to bonds, promissory notes and loan stocks) issued by the Issuer; vii) amounts which exceed 5% of the Debt (the computation of which exclude the amount in item (v) hereof) raised by the Issuer under its hire-purchase arrangements; but excludes the double counting of any liability which might otherwise be included as a result of this definition. Permitted Investments BBMSB shall be permitted from time to time to utilise funds held in the FDA (other than OA I and OA II) to make Permitted Investments provided that such funds utilised for Permitted Investments shall be remitted to the relevant account in a timely manner to meet any of its payment obligations when they become due and payable. Permitted Investments mean: a) Deposits with licensed financial institutions; or b) Bankers acceptances, bills and other money market instruments issued by licensed financial institutions; or c) Treasury bills, money market instruments, and other debt instruments issued by the Government; or d) Debt securities issued by quasi Government or Government related entities with a minimum short rating of P1 or MARC-1 and long term rating of AA or debt securities guaranteed by the Government; or e) Private debt securities issued by corporations, financial institutions or guaranteed by financial institutions with a minimum short term rating of P1 or MARC-1 and long term rating of AA; and f) Having a maturity date to match the utilization of the monies and being denominated in Ringgit Malaysia. 20

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