Luster Industries Bhd ( LIB or the Issuer or the Company ) Incorporated in Malaysia on 19 September 1986

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1 PRINCIPAL TERMS AND CONDITIONS OF THE RCSLS-C 1. BACKGROUND INFORMATION (a) Issuer (i) Name Luster Industries Bhd ( LIB or the Issuer or the Company ) (ii) Address Registered Address: Suite 2-1, 2 nd Floor Menara Penang Garden 42A, Jalan Sultan Ahmad Shah Penang Business Address: Plot 36 & 37, Jalan PKNK Utama Kawasan Perusahaan Sungai Petani Sungai Petani, Kedah (iii) Business registration no P (iv) Date and place of incorporation Incorporated in Malaysia on 19 September 1986 (v) Date of listing 11 September 2003 (vi) Status Resident-controlled company (vii) Principal activities LIB is principally an investment holding company and is involved in provision of management services to its subsidiaries, whilst its subsidiaries are principally involved in: (i) (ii) manufacturing of precision plastic parts and components for electrical and electronic products; and complete and sub-assembly of electrical and electronic products. The LIB Group also manufactures and assembles other plastic parts and components such as mobile garbage bins, medical sharp boxes, flower pots, automotive components and other plastic products. 1

2 (viii) Board of directors The particulars of the board of directors of LIB, who are all Malaysian, as at 30 December 2011 are as follows: (i) YAM Tunku Datin Annie Dakhlah bte Almarhum Tuanku Munawir (Independent Non-Executive Chairman); (ii) Lim See Chea (Managing Director); (iii) Lim See Hua (Deputy Managing Director); (iv) Liang Wooi Gee (Executive Director); (v) Lau Theng Chim (Independent Non-Executive Director) (vi) Ng Chin Nam (Independent Non-Executive Director); and (vii) Mohamed Shukri bin Mohamed Zain (Independent Non- Executive Director). (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders The shareholding structure of LIB (based on direct shareholding) according to the Record of Depositors as at 30 December 2011 is as follows: Categories No. of shares held % Malaysian - Bumiputera - Individual 2,228, Nominees 4,793, Body corporates 160, Government agencies Non-governmental organisations Others 4, Total Bumiputera 7,186, Non-Bumiputera - Individuals 31,789, Nominees 3,286, Body corporates 16,956, Others 100 Neg. Total Non-Bumiputera 52,032, Total Malaysian 59,219, Foreigners 1,964, Total 61,183, Based on the Record of Depositors, the substantial shareholders of LIB as at 30 December 2011 are as follows: 2

3 Name Nationality/ Country of Incorporation Direct No. of shares held Indirect No. of % shares held Luster Holdings Sdn Bhd Malaysia 17,807, Lim See Chea Malaysian 131, ,807,100 (1) Gey Ah Lee Ah Sim Malaysian 8, ,807,100 (1) Ling Siew Luan Malaysian 11,137, Note: (1) Deemed interested by virtue of their shareholdings of 15% and above in Luster Holdings Sdn Bhd % (x) Authorised and paid-up capital The authorised and issued and paid-up share capital of LIB as at 30 December 2011 are as follows: Type No. of shares Par value RM Amount RM Authorised 100,000, ,000,000 Issued and Paid-up 61,183, ,183,000 (b) Originator (in the case of ABS) (i) Name (ii) Address (iii) Business registration no. (iv) Date and place of incorporation (v) Date of listing (vi) Status 3

4 (vii) Principal activities (viii) Board of directors (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders (x) Authorised and paid-up capital 2. PRINCIPAL TERMS AND CONDITIONS (a) Names of parties involved in the proposed transaction (where applicable) (i) Principal adviser ECM Libra (ii) Lead arranger ECM Libra (iii) Co-arranger (iv) Solicitor Messrs. Zaid Ibrahim & Co (v) Financial adviser (vi) Technical adviser 4

5 (vii) Trustee. As the RCSLS-C will be held by a single holder, a trust deed is not required to be executed by virtue of item 4 of Schedule 8 of the CMSA. (viii) Guarantor (ix) Valuer (x) Facility agent ECM Libra (xi) Primary subscriber (under a bought-deal arrangement) and amount subscribed (xii) Underwriter and amount underwritten (xiii) Central depository BNM (xiv) Paying agent BNM (xv) Reporting accountant Messrs. Grant Thornton (xvi) Calculation agent (xvii) Others (please specify) The RCSLS-C are to be fully issued to CIMB Bank Berhad ( FI Creditor or Lender ) as part settlement of indebtedness of Luster Plastic Industries Sdn Bhd ( LPI ),, pursuant to the settlement of the debts owing, which forms part of LIB s revised regularisation plan. 5

6 (b) Facility description RM4,270,000 nominal value of 5% five (5)-year redeemable convertible secured loan stocks (Class C) of RM0.10 each ( RCSLS-C ) at 100% nominal value. (c) Issue/ programme size Issue size RM4,270,000 nominal value of RCSLS-C Issue price 100% of nominal value of the RCSLS-C (d) Tenure of issue/ debt programme (or facility) Five (5) years from and including the date of issuance of the RCSLS-C and shall mature on the fifth (5th) anniversary of the date of issue of the RCSLS-C ( Maturity Date ). (e) Availability period of debt programme (or facility) (f) Interest/ coupon rate The RCSLS-C shall bear a 5% per annum coupon. (g) Interest/ coupon payment frequency Payment of the interest will be semi-annually in arrears commencing six (6) months after the issue date of the RCSLS-C. (h) Interest/ coupon payment basis Interest on the RCSLS-C shall be calculated on the basis of the actual number of days elapsed ( Actual ) and a 365-day basis (Actual/365). Interest/ coupon accrues from and including the issue date up to but excluding the next interest payment date and thereafter, from and including each interest payment date, up to but excluding the next interest payment date. If any RCSLS-C is converted into LIB Shares by way of the FI Creditors exercising the right to convert, interest shall not be payable on the RCSLS-C subject to the conversion, for the period from the date following the last interest payment date to the conversion date. 6

7 For any RCSLS-C cancelled by way of a mandatory early redemption, interest shall be payable by LIB to the FI Creditors on such part of the RCSLS-C cancelled from the day following the last interest payment date, as the case may be, up to but excluding the date of the mandatory early redemption. (i) Security/ collateral (if any) A charge to CIMB Bank Berhad on the 1½ storey factory cum office building leased by LPI (the Security Party ) known as: 1. Lot No. 35 (formerly PT 18859), Geran (formerly known as HS(D) 81/92), Seksyen 65, Bandar Sungai Petani, Daerah Kuala Muda, Kedah bearing assessment address Lot 35, Jalan PKNK Utama, Kawasan Perusahaan LPK Sungai Petani, Sungai Petani, Kedah Darul Aman. 2. Lot No. 36 (formerly PT 18860), Geran (formerly HSD 82/92), Seksyen 65, Bandar Sungai Petani, District of Kuala Muda, State of Kedah bearing assessment address Lot 36, Jalan PKNK Utama, Kawasan Perusahaan LPK Sungai Petani, Sungai Petani, Kedah Darul Aman. (j) Details on utilisation of proceeds by issuer 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 No proceeds will be raised as the RCSLS-C are issued to the FI Creditor pursuant to the debt settlement. (k) Sinking fund and designated accounts (if any) (l) Rating Credit rating(s) assigned Name of rating agency The RCSLS-C are not rated, non-transferable and non-tradable. (m) Mode of issue Non-tender, direct issuance without prospectus. The RCSLS-C will be issued under the Real Time Electronic Transfer of Funds and Securities ( RENTAS ) and be reported under Fully Automated System for Tendering ( FAST ). The RCSLS-C shall at all times comply with the rules and requirements of the FAST and the RENTAS. 7

8 (n) Selling restriction, including tradability (i.e. tradable or non-tradable) The RCSLS-C will be issued to CIMB Bank Berhad solely, being a person specific under Schedule 6, 7, 8 and 9 of the CMSA. The RCSLS-C are non transferable and non-tradable. (o) Listing status and types of listing The RCSLS-C will not be listed on any stock exchange. However, we had obtained the approval-in-principle from Bursa Securities for the listing of and quotation for the new LIB Shares to be issued pursuant to the conversion of the RCSLS-C on the Main Market of Bursa Securities, via its letter dated 30 September (p) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) Approval from the SC for the issuance of the RCSLS pursuant to the debt settlement and the issuance of ICULS for the acquisitions was obtained on 25 November The issuance of the RCSLS is subject to the following approvals: (i) Bursa Securities, which was obtained on 30 September 2011, for: (a) (b) (c) (d) the revised regularisation plan; the share split; the admission of the warrants and ICULS to the Official List of Bursa Securities; and the listing and quotation of the new LIB Shares, warrants and ICULS to be issued pursuant to the revised regularisation plan as well as new LIB Shares to be issued pursuant to the exercise of the warrants, conversion of the RCSLS-C and conversion of the ICULS; (ii) (iii) (iv) the High Court for the capital reduction and share premium reduction, which was obtained on 30 March 2012; BNM for the issuance of the warrants to non-residents pursuant to the revised regularisation plan, which was obtained on 5 October 2009; Ministry of International Trade and Industry for the disposal of shares of WPESB by the WPESB vendors, which was obtained on 5 December 2011; 8

9 (v) (vi) (vii) (viii) (ix) financial institution creditors of WPESB, WPTSB and EPM for the disposal of shares in WPESB, WPTSB and EPM respectively, if required; the shareholders of LIB at the extraordinary general meeting convened on 22 February 2012 for the revised regularisation plan; the signing of the debt settlement agreement between the financial institution creditors and LIB and two (2) of its subsidiaries, namely Luster Precision Engineering Sdn Bhd and LPI, which has been executed on 25 November 2011; such other approvals and consents as may be deemed necessary by Malayan Banking Berhad, DBS Bank Ltd (Labuan Branch) and United Overseas Bank (Malaysia) Bhd; and any other relevant authorities, if required. (q) Conditions precedent The issuance of RCSLS-C pursuant to the debt settlement is part of the revised regularisation plan, which is subject to and conditional upon the approvals being obtained as set out in part (p) above. (r) Representations and warranties The Issuer represents and warrants to the Lender that: (a) Status: the Issuer is a company duly incorporated under the laws of Malaysia and has full power and authority to conduct its business and to execute and deliver and comply with the provisions of the agreement between the Issuer and the Lender in respect of the issuance of RCSLS-C ( Subscription Agreement ); (b) Documents: the creation and issue of the RCSLS-C and the execution and delivery of the Subscription Agreement and the performance of the terms herein and therein have been duly authorised by the Issuer and that the same constitute or will constitute legal, valid and binding obligations of the Issuer enforceable in accordance with their respective terms; 9

10 (c) (d) Powers and authorisations: the execution and delivery by the Issuer of the Subscription Agreement does not and will not infringe any applicable law or any rule made pursuant to any law or regulation or any order of any court, and that all requirements of any such law, rule, guidelines, requirement or order have been fully complied with and satisfied and are not and will not be contrary to the provisions of the Memorandum and Articles of Association of the Issuer and will not infringe any terms of, or constitute a default under, any instrument or agreement to which the Issuer is a party or by which it or any of its respective property is bound; Litigation: the Issuer is not involved in, nor has the Issuer knowledge of any threat or circumstances likely to lead to, any litigation or arbitration or administrative proceedings which might, individually or in the aggregate, be material; (e) Consents: that all consents, clearances, approvals, authorisations and orders of any court, government department or other regulatory body in Malaysia or elsewhere and all corporate consents, approvals and authorisations required by the Issuer for or in connection with the execution and delivery of the debt settlement agreement have been obtained and will remain in full force and effect; (f) Accounts: the audited financial statements (including the income statement and balance sheets) of the Issuer for the year ended 31 December 2010 have been prepared on a basis consistently applied in accordance with generally accepted accounting principles in Malaysia and give a true and fair view of its financial condition and the results of its operations for the relevant period, and all liabilities have been fully disclosed or reserved against. The Issuer shall submit its quarterly and detailed consolidated cash-flow statements to the Lender upon announcement of its financial performance to the Bursa Securities; (g) Material change in financial condition: there has been no material adverse change in the financial condition or operations of the Issuer since 31 December 2010; (h) Title: the Issuer is the beneficial owner or has title to all its respective assets; (i) Dissolution: no step has been taken by the Issuer or its/their shareholders nor have any legal proceedings been started or threatened for the dissolution of the Issuer; (j) Conduct of Business: the Issuer is conducting its business and operations in compliance with all applicable laws and regulations and all directives of governmental authorities having the force of law; 10

11 (k) (l) Arrangements and Reconstructions: save and except pursuant to the revised regularisation plan, no step has been taken by the Issuer, its/their creditors or any of its/their shareholders or any other person in its/their behalf nor have any legal proceedings or applications been started or threatened under section 176 of the Companies Act, 1965 nor has any moratorium been declared or affects the Issuer or any of the subsidiary of LIB ( Subsidiary ) or any part of their debts; and Dividends/Quarterly submission: the Issuer or any of its Subsidiary shall not declare any dividends without the concurrence of the Lender. Further warranties The Issuer further represents and warrants that: (a) (b) (c) Neither the Issuer nor 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 last five years prior to the date of the Subscription Agreement or any document relating to the offer, issue or invitation; The Issuer has not 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 the Subscription Agreement or any document relating to the offer, issue or invitation; and No information which is material to investors or the FI Creditor has been withheld by the Issuer. (s) Events of default (or enforcement event, where applicable) If at any time and for any reason, any one of the following events occurs, that is to say: (a) (b) Non-redemption/ Non-payment: the Issuer fails to compulsorily redeem the RCSLS on the relevant redemption date(s) or fails to pay any sums due under the debt settlement agreement; Breach of obligations: failure of either the Issuer or any Security Party to observe or perform any of its/their respective obligations under the Subscription Agreement or the security documents which is not remedied to the satisfaction of the Lender within fourteen (14) days after receipt by the Issuer or of a notice from the Lender specifying the default OR the date of such breach, whichever is earlier; 11

12 (c) Appointment of receiver, legal process: an encumbrancer takes possession of, or a trustee or administrative or other receiver or similar officer is appointed in respect of, debts, properties or assets of the Issuer or any Security Party, or distress or any form of execution is levied or enforced upon or taken out against any such assets and is not discharged within thirty (30) days after being levied, enforced or taken out; (d) (e) Composition or winding up: the Issuer or any Security Party convenes a meeting of its creditors or proposes or makes any arrangement or composition with, or any assignment for the benefit of, its creditors or a petition is presented or a meeting is convened for the purposes of considering a resolution or other steps are taken for making an administration order against or for winding up, dissolution or liquidation of the Issuer or such Security Party, as the case may be, or a petition for winding up is presented against the Issuer or such Security Party, as the case may be, and such petition for winding up has not been withdrawn nor set aside within thirty (30) days of its presentation; Unlawfulness: it is or will become unlawful by the laws of Malaysia or by the laws of any applicable jurisdiction for the Issuer or any Security Party to perform or comply with any one or more of their respective obligations under the Subscription Agreement or the security documents; (f) Misrepresentation: any representation, warranty or statement which is made by the Issuer or which is contained anywhere else or in connection herewith proves to be incorrect in any material respect; (g) (h) Cessation of business: the Issuer or any Security Party changes the nature or scope of its/their business, suspends a substantial part of the present business operations which it/they now conduct directly or indirectly, or any governmental authority expropriates or threatens to expropriate all or part of its/their assets; Cross-default: any indebtedness of the Issuer or any Security Party becomes due or capable of being declared due before its stated maturity, any guarantee of or indemnity given by the Issuer or any Security Party or is not discharged at maturity or when called or the Issuer or any Security Party or goes into default under, or commits a breach of, any instrument or agreement relating to any such indebtedness or guarantee or the security for any such indebtedness becomes enforceable; 12

13 (i) Ineffective or invalid provision: any provision of the Subscription Agreement, the debt settlement agreement or any security document is or becomes, for any reason, invalid or unenforceable or if any law is brought into effect which purports to render ineffective or invalid any provision of the Subscription Agreement or the debt settlement agreement or any security document; (j) Licence: any licence, authorisation, approval, consent, order, exemption, registration is suspended or is revoked or withheld or modified or is otherwise not granted or fails to remain in full force and effect and such revocation results in the Issuer or any Security Party or any Subsidiary ceasing its/their business operations and impairs or prejudices the Issuer s ability to comply with the terms and conditions of the RCSLS-C or the provisions of the Subscription Agreement or any other document relating to the issue, offer or invitation in respect of the RCSLS-C; (k) Material Adverse Change: any event or series of events occur(s) which might have a material and adverse effect on the financial condition or operations of the Issuer or any Security Party; (l) Scheme of Arrangement: a scheme of arrangement under Section 176 of the Companies Act, has been instituted against the Issuer or any Security Party then the Lender may, without prejudice to any of its other rights declare that an event of default has occurred and upon the Lender giving a written notice to the Issuer, the aggregate nominal value of all outstanding RCSLS-C together with interest thereon shall mature and become immediately redeemable by the Issuer. After notification of an event of default, the Lender may at any time, at its discretion, require the Issuer that the outstanding RCSLS-C together with accrued interest thereon and all other sums payable to the Lender under the Subscription Agreement shall become immediately due and payable and without further notice to the Issuer, to institute such proceedings and to take such steps as it thinks fit including enforcing remedies under each of the security documents. 13

14 (t) Covenants Covenant to pay The Issuer hereby expressly covenants with the Lender that unless the RCSLS-C have been previously converted, redeemed, purchased or cancelled, it will, in accordance with these presents, on the redemption dates of the RCSLS-C or on such earlier date as the same or any part thereof may become immediately due and repayable thereunder, redeem the RCSLS-C in accordance with the conditions by paying or procuring to be paid unconditionally to the Paying Agent in Ringgit Malaysia in Kuala Lumpur in immediately available funds provided that every payment in respect of the RCSLS-C to or to the account of the Paying Agent in the manner provided in the Central Depository and paying agency agreement shall operate in satisfaction pro tanto of the covenant of the Issuer set out under the Subscription Agreement. Covenants relating to the conversion rights So long as the RCSLS-C remain outstanding the Issuer will: (a) (b) (c) Listing of shares: use its best efforts (i) to maintain a listing for all the issued shares on Bursa Securities, and (ii) to obtain and maintain a listing for all the shares issued on the exercise of the conversion rights attaching to the RCSLS-C on Bursa Securities, and will forthwith give notice to the Lender in accordance with the Subscription Agreement of the listing or delisting of the shares (as a class); Expenses: pay the expenses of the issue of, and all expenses of obtaining listing for, shares arising on conversion of the RCSLS-C; Availability of shares: keep available, free from any other pre-emptive or other similar rights, out of its authorised but unissued ordinary share capital the full number of shares liable to be issued on conversion of the RCSLS-C from time to time remaining outstanding and to satisfy in full all other rights of conversion into or subscription for shares and maintain all required shareholder authorisations, and will ensure that all shares delivered on conversion of RCSLS-C will be duly and validly issued as fully-paid provided always that the Issuer shall not be prohibited from purchasing its shares to the extent permitted by law; 14

15 (d) (e) Limited issue of shares: not issue or pay up any securities, by way of capitalisation of profits or reserves unless, the provisions on adjustment to the conversion price are applicable and complied with provided that the Issuer may issue or pay up any security by way of capitalisation of profits or reserves (i) by the issue of fully-paid shares to the shareholders and other persons entitled to them, (ii) by the issue of shares paid up in full out of profits or reserves in accordance with applicable law and issued in lieu of a cash dividend or (iii) by the issue of fully-paid equity share capital (other than shares) to the holders of equity share capital of the same class and other persons entitled thereto, subject in each case to the provisions on adjustment to the conversion price; Limited modification of rights: not modify the rights attaching to the shares with respect to voting, dividends or liquidation nor issue any other class of ordinary share capital carrying any rights which are more favourable than the rights attaching to shares but so that nothing in this paragraph shall prevent (i) the issue of ordinary share capital to employees (including directors holding executive office) whether of the Issuer or any of its subsidiaries or associated companies by virtue of their office or employment pursuant to any scheme or plan now in existence or which may in the future be approved by the Issuer in general meeting or (ii) any consolidation or sub-division of the shares or the conversion of any shares into stock or vice versa or (iii) any modification of such rights which is not, in the opinion of a investment bank materially prejudicial to the interests of the Lender or (iv) issuance of shares or convertible securities in full or part satisfaction of any consideration for the purchase or acquisition of any shares or securities in any other company or corporation, or of property, assets or business or (v) the issuance of shares or convertible securities for cash or consideration other than for cash in conformity to any economic or other policy of the Government of Malaysia or other appropriate authority or (vi) without prejudice to any rule of law or legislation, the conversion of shares into, or the issue of any shares in, uncertificated form (or the conversion of shares in uncertificated form into certificated form) or the amendment of the articles of association of the Issuer to enable title to securities of the Issuer (including shares) to be evidenced and transferred without a written instrument or any other alteration to the articles of association of the Issuer made in connection with the matters described in this paragraph or which is supplemental or incidental to any of the foregoing (including any amendment made to enable or facilitate procedures relating to such matters and any amendment dealing with the rights and obligations of holders of securities (including shares) dealt with under such procedures) or (vii) any issue of ordinary share capital or convertible securities where the issue of such ordinary share capital or convertible securities results in an adjustment to the conversion price or (viii) the conversion rights attached to the RCSLS-C being exercised; 15

16 (f) (g) (h) Restricted actions: not make any offer, issue, grant or distribution or take any other action if the effect thereof would be that, on the conversion of RCSLS-C, shares would (but for the provisions on rounding and adjustment) have to be issued at a discount to the par value of the shares; Closing of register: unless so required by applicable law or regulation or in order to establish a dividend, distribution or other rights attaching to the shares, not close its register of shareholders or take any other action which prevents the transfer of its shares generally and ensure that the RCSLS-C may be converted legally and the shares issued on conversion may (subject to any limitation imposed by law) be transferred (as between transferor and transferee although not as against the Issuer) at all times while the register is closed or such other action is effective, nor take any action which prevents the conversion of the RCSLS-C or the issue of shares in respect of them provided that the close of register shall not be longer than the maximum time permitted under relevant laws; and Extend offer: if an offer is made to all (or as nearly as may be practicable) shareholders of the Issuer other than the offeror and/or any associate or associates of the offeror to acquire all or a majority of the issued equity share capital of the Issuer, or if any person proposes a scheme with regard to such acquisition, give notice of such offer or scheme to the Lender at the same time as any notice thereof is sent to the shareholders of the Issuer (or as soon as practicable thereafter) stating that details concerning such offer or scheme may be obtained from the specified offices of the registrar and, where such an offer or scheme has been recommended by the board of directors of the Issuer or where such an offer has become or been declared unconditional in all respects, use its reasonable endeavours to procure that a like offer or scheme is extended to the Lender and the holders of any shares issued during the period of the offer or scheme arising out of the conversion rights. For the above purposes, equity share capital means the share capital of a company excluding any part of that capital which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution. 16

17 (u) Provisions on buy-back and early redemption of bonds (a) Redemption Unless previously converted or purchased as provided in (b) below and subject to the compulsory redemption as set out below, the RCSLS-C is redeemable at the option of the Issuer for cash anytime after the issue date at its nominal value. Unless previously converted, the RCSLS-C held by the FI Creditor are to be redeemed by the Issuer proportionately on a straight line basis of 20% annually, as follows: Date of redemption Redemption rate 1 st anniversary from the date of issue of the RCSLS-C 20% 2 nd anniversary from the date of the issue of the RCSLS-C 20% 3 rd anniversary from the date of the issue of the RCSLS-C 20% 4 th anniversary from the date of the issue of the RCSLS-C 20% Maturity date 20% For the avoidance of doubt, if: (i) (ii) The total amount of RCSLS-C converted and/or purchased by the RCSLS-C holders and the Issuer respectively during the first anniversary is collectively, say 15% of the RCSLS-C, then the Issuer is only required to redeem the remaining 5% of the RCSLS-C to make up to the 20% redemption limit in the first anniversary; The total amount of RCSLS-C converted and/or purchased by the RCSLS-C holders and the Issuer respectively during the first anniversary is collectively, say 30% of the RCSLS-C, then no redemption is required in the first anniversary, and assuming the total amount of RCSLS-C converted and/or purchased in the second anniversary is only 5% of the RCSLS- C, then the Issuer is only required to redeem the remaining 5% of the RCSLS-C to make up to the 40% redemption limit in the second anniversary. In respect of early redemption, the Issuer may redeem the outstanding RCSLS-C prior to the stipulated date of redemption by giving to the holder notice in writing of such intention fourteen (14) business days before the proposed date of redemption. 17

18 (b) Purchase The Issuer or any of its subsidiaries may at any time purchase or otherwise acquire the RCSLS-C (and such RCSLS-C purchased or acquired shall be deemed not to remain outstanding) at the agreed price or at any price to be negotiated. All the RCSLS-C, which are purchased or redeemed, shall forthwith be cancelled (together with all interest accrued cancelled therewith). All the RCSLS-C so cancelled may not be reissued or resold. (v) Other principal terms and conditions for the issue Convertibility Conversion Price Adjustment in the Conversion Price in the event of alteration to the share capital Trust Deed : Convertible into ordinary shares at the option of the holder(s) from the issue date. If not converted by the RCSLS-C holders, the RCSLS-C will be redeemed by the Issuer based on the terms of Redemption above. All outstanding RCSLS-C shall be fully redeemed on the Maturity Date. Failure of the Issuer to redeem the outstanding RCSLS-C on the relevant date(s) of redemption shall constitute an event of default under item 2(s) above : The indicative conversion rate of RM0.10 nominal amount of RCSLS-C into one (1) new LIB Share, credited as fully paid-up. The indicative conversion price of RM0.10 was arrived at based on the par value of LIB Shares. : LIB shall make the necessary adjustment to the Conversion Price in the event of any alteration in the share capital of LIB on or before the Maturity Date, whether by way of right issue, bonus issue, consolidation of shares, subdivision of shares or as a result of capital distribution whether on a reduction of capital or otherwise (but excluding capital reduction involving any cancellation of capital which is lost or unrepresented by available assets) however being effected in accordance with the provisions of the debt settlement agreement. :. As the RCSLS-C will be held by a single holder, a trust deed is not required to be executed by virtue of item 4 of Schedule 8 of the CMSA. 18

19 Penalty Interest RCSLS holders right to participate in any distribution and/ or offer of further securities in LIB : If any moneys (whether principal, interest or otherwise) is not paid by the Issuer on the due date, the Issuer shall pay to the holders of the RCSLS-C default interest thereon at the rate of 1% per annum above the coupon rate payable under the terms of the RCSLS-C, calculated from the due date of payment up to the date of actual payment. All unpaid interest including such additional interest shall be compounded on monthly basis and shall thereafter bear interest at the said default rate. : The RCSLS-C holders are not entitled to participate in any distribution and/or offer of securities in LIB until and unless such RCSLS-C holders have converted the RCSLS-C into new shares and such shares are allotted prior to the entitlement date of such distribution and/or offer of securities. 19