: K. : Not applicable. (viii) Board Directors : The Board of Directors of the Issuer as at 10 August 2007 are as follows:-

Transcription

1 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL (Information required under paragraph 4.01 of the Guidelines on the Offering of Private Debt Securities - Revised Edition dated 26 July 2004) 1 BACKGROUND INFORMATION OF THE ISSUER (i) Name : MBF Cards (M sia) Sdn Bhd ( MBFC or Issuer ) (ii) Address : Registered/Business Address Level 38, Menara AmBank, No. 8, Jalan Yap Kwan Seng, Kuala Lumpur (iii) (iv) (v) (vi) Business Registration No. Date/Place of Incorporation Date of Listing (in the case of a public listed company) Status Resident/non-resident controlled company Bumiputera / non- Bumiputera controlled company : K : 5 August 1977 / Kuala Lumpur, Malaysia : Not applicable : Resident controlled company. : Non-Bumiputera controlled company. (vii) Principal Activities : Issuing credit cards, acquiring merchants and other related services. (viii) Board Directors : The Board of Directors of the Issuer as at 10 August 2007 are as follows:- Name Datuk Azizan bin Abdul Rahman Tan Sri Datuk Dr Ninian Mogan Lourdenadin Susan A/P Rajanayagam Resident Status Resident Resident Resident I/C No

2 Martin Richard Haeger Abdul Rahman bin Achmed Lee Chaing Huat Resident Resident Resident British Passport No: (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders No of Shares Held as at 10 August 2007 Name Direct (%) Indirect (%) MBf Holdings Berhad ( MBfH ) 2,685, ,579, Jastura Sdn Bhd 1,971, Atox Cards Sdn Bhd 608, TOTAL 5,265, : Authorised Share Capital as at 10 August 2007 RM10,000, comprising 10,000,000 ordinary shares of RM1.00 each. : Issued and Fully Paid-up Share Capital as at 10 August 2007 RM5,265, comprising 5,265,000 ordinary shares of RM1.00 each. [The remainder of this page is intentionally left blank] 2

3 2. PRINCIPAL TERMS AND CONDITIONS (a) Names of parties involved in the proposed transaction (where applicable) (i) Principal Adviser(s)/ Lead Arranger(s) : Aseambankers Malaysia Berhad ( Aseambankers ). (ii) Arranger(s) : Not applicable. (iii) Valuers : Not applicable. (iv) Solicitors : Cheang and Ariff (v) Financial Adviser : Not applicable. (vi) Technical Adviser : Not applicable. (vii) Guarantor : Not applicable. (viii) Trustee : Mayban Trustees Berhad. (ix) Facility Agent : Aseambankers. (x) Primary Subscriber(s) and amount subscribed (where applicable) : The primary subscriber(s) will be determined prior to issuance(s) under the relevant Programme (as defined below), issued via a bought deal arrangement (if applicable). (xi) Underwriter(s) and amount underwritten : The MTNs (as defined below) will not be underwritten. The CPs (as defined below) may be underwritten if the Issuer and the Joint Lead Managers mutually agree based on terms and conditions, including those relating to the underwritten rate and the participation and underwriting fees, to be agreed thereupon. In the event underwriting (either partial or full) is required, the CPs shall be underwritten by a consortium of eligible financial institutions ( Underwriters ) to be arranged by the Joint Lead Managers on a best effort basis. The Underwriters severally commit themselves to purchase the CPs not taken up by the Tender Panel Member(s) ( TPM ) at the underwritten rate, pro-rated to their underwriting commitments. With respect to 3

4 each issue, the underwriting commitment in respect of each Underwriter shall be reduced by the nominal value of the CPs subscribed by that particular Underwriter, in its capacity as TPM. (xii) Central Depository : Bank Negara Malaysia ( BNM ). (xiii) Paying Agent : BNM. (xiv) Reporting Accountant : Ernst & Young. (xv) Others : Joint Lead Managers Aseambankers and CIMB Investment Bank Berhad (formerly known as Commerce International Merchant Bankers Berhad) ( CIMB ). Joint Bookrunners Aseambankers and CIMB. Security Agent Aseambankers. Issuing Agent Aseambankers. TPM Persons to whom an issue of, or an offer or invitation to subscribe the Commercial Papers ( CPs ) and/or Medium Term Notes ( MTNs ) (collectively the Notes ) to be issued under the CP and/or MTN Programme of up to RM600.0 million in nominal value would fall within Section 4(6) of the Companies Act 1965, or as amended from time to time and subject to any law, order, regulations or official directive if either the Securities Commission ( SC ), BNM or any other regulatory authority from time to time. (b) Facility Description : CP and/or MTN Programme of up to RM600.0 million in nominal value ( CP/MTN Programme or the Programme or the Proposal ). 4

5 (c) Issue Size (RM) : The aggregate outstanding nominal value of the CPs and/or MTNs issued under the Programme at any point in time shall not exceed RM600.0 million in nominal value. (d) Issue Price (RM) : CPs The CPs shall be issued at a discount to face value and the issue price is calculated in accordance with the Rules on Fully Automated System for Issuing/Tendering ( FAST ) issued by BNM, as amended or substituted from time to time ( FAST Rules ). MTNs (e) Tenor of the facility / issue : Tenor of the facility The MTNs issued under the CP/MTN Programme shall be issued at a premium, at par or at a discount to face value, to be mutually agreed between the Issuer and the Joint Lead Managers. The issue price shall be computed in accordance with formulas specified in the FAST Rules issued by BNM and shall be governed by guidelines issued by BNM and shall be governed by guidelines pertaining thereto issued by BNM from time to time. Seven (7) years from the date of the first issuance under the CP/MTN Programme, which shall be made within two (2) years from the date of the SC s approval. Tenor of the issue The CPs can be issued for tenors of one (1), two (2), three (3), six (6), nine (9), twelve (12) months or such other period as the Issuer may select in consultation with the Joint Lead Managers, provided that the maturity date of the respective CPs shall not extend beyond the expiry date of the CP/MTN Programme. 5

6 (f) Interest/Coupon rate (%) : CPs The MTNs can be issued for tenors of more than one (1) year or such other period, but not exceeding seven (7) years as the Issuer may select in consultation with the Joint Lead Managers, provided that the maturity date of the respective MTNs shall not extend beyond the expiry of the CP/MTN Programme. There will be no coupon payable on the CPs issued under the CP/MTN Programme in view that the CPs are issued at a discount. MTNs The coupon rate shall be determined and agreed prior to each issuance of the respective MTNs. (g) (h) Interest / Coupon Payment frequency Interest / Coupon Payment Basis : CPs There will be no coupon payable on the CPs issued under the CP/MTN Programme in view that the CPs are issued at a discount. MTNs In respect of coupon bearing MTNs, payable semi-annually in arrears from the date of issue of the MTNs with the last coupon payment to be made no later than expiry date of the CP/MTN Programme. : Actual number of days over 365-day basis. (i) Yield to Maturity (%) : To be determined upon each issuance of the CPs and/or MTNs. 6

7 (j) Security/Collateral (if any) : (a) A first ranking charge over all present and future credit card receivables of the Issuer ( Receivables ) by way of a master charge, save and except for the credit card receivables which will be disposed to a special purpose vehicle pursuant to an asset-backed securitisation programme ( ABS Programme ) to refinance the Programme ( Charge on Receivables ); (b) A first ranking assignment of and charge over the Issuer s title, benefits and interest in and to the debt service reserve account ( DSRA) and proceeds account ( PA ) (collectively the DSRA and PA are referred to as Designated Accounts ) and balances therein, including for the avoidance of doubt any amounts in the Designated Accounts which has been utilised for Permitted Investments (as defined below). (k) Details on utilisation of proceeds The proceeds raised from the CP/MTN Programme shall be utilised as follows:- (a) to settle the Issuer s existing commercial papers/medium term notes programme of up to RM million in nominal value ( Existing Programme ); and (b) to finance lines of credit to the Issuer s card members, to fund the DSRA (if required) and/or to refinance any maturing CPs and/or MTNs under the Programme. Any amount redeemed may be reissued for the purpose (b) above, provided always that such amount reissued shall not exceed the limit and expiry date of the CP/MTN Programme. 7

8 (l) Sinking fund (if any) : None. Details of each issuance shall be notified to the SC in accordance with Section 2.01 of Appendix 1 of the SC s Guidelines on the Offering of Private Debt Securities ( PDS Guidelines ). (m) Rating Credit Rating Assigned [Please specify if this is an indicative rating] Name of Rating Agency : The CPs and MTNs have been accorded short-term rating of P1 and long-term rating of A2 respectively. : RAM Rating Services Berhad (n) Form and Denomination The Notes shall be issued in accordance with the following: (i) (ii) (iii) the Code of Conduct and Market Practices for the Malaysian Corporate Bond Market issued by the Institut Peniaga Bon Malaysia and approved by BNM ( IPBM Code ); the Rules on the Scripless Securities under the Real Time Electronic Transfer of Funds and Securities ( RENTAS ) system issued by BNM and ( RENTAS Rules ); and the Rules on Fully Automated System for Issuing/Tendering ( FAST ) issued by BNM ( FAST Rules ), or their replacement thereof (collectively the Codes of Conduct ) applicable from time to time. The RENTAS Rules shall prevail to the extent of any inconsistency between the RENTAS Rules and the IPBM Code. 8

9 (o) Mode of Issue : CPs Each tranche of the Notes shall be represented by a global certificate to be deposited with BNM, and is exchanged for definitive bearer form only in certain limited circumstances. The denomination of the Notes shall be RM1, or in multiples of RM1, but subject to the FAST Rules. Via competitive tender by the TPM or on a bought deal basis, or on a best effort basis, via private placement or book running basis. MTNs Via competitive tender by the TPM or a bought deal basis, or on a best effort basis, via private placement or book running basis. Such competitive tender, private placement, bought deal and book running shall be subject to terms and conditions to be agreed between the Issuer and the Joint Lead Managers. Issuance of the CPs and/or MTNs under the CP/MTN Programme shall be in accordance with the FAST Rules, subject to such exemptions (if any) granted from time to time. (p) Selling Restrictions : The CPs and/or MTNs may not be offered or sold, transferred or otherwise disposed of, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia other than to categories of persons specified in Section 4(6) of the Companies Act 1965, as amended from time to time and subject to any law, order, regulations or official directive if either the SC, BNM or any other regulatory authority from time to time. (q) Listing Status : The CPs and MTNs will not be listed on Bursa Malaysia Securities Berhad. 9

10 (r) Minimum Level of Subscription (RM or %) : In the event any issue under the CP/MTN Programme is not underwritten: (i) (ii) the minimum level of subscription for any issue under the CP/MTN Programme that is to be issued via a bought deal basis or for the purpose of settling the Existing Programme shall be 100% of the size of a particular issue; the minimum level of subscription for each issue that is to be issued on competitive tender, private placement basis or book running basis shall be 5% of the size of a particular issue. In the event any issue, offer or invitation is undersubscribed and cannot meet the minimum level of subscription, the same shall be aborted and where applicable, any consideration received for the purpose of subscription must be immediately returned to the respective subscribers/placees. (s) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained [please specify] : None. (t) Conditions Precedent Conditions precedent to set up the CP/MTN Programme and first issuance to include but not limited to the following (all have to be in form and substance acceptable to the Facility Agent):- Main Documentation (1) The transaction documents in relation to the Programme ( Transaction Documents ) have been executed and, where applicable, stamped and presented for registration. 10

11 (2) All relevant notices and acknowledgements (where applicable) shall have been made or received as the case may be. Issuer (1) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association, of the Issuer. (2) Certified true copies of the latest Forms 24 and 49 of the Issuer. (3) A certified true copy of board resolutions of the Issuer authorising, among others, the execution of the Transaction Documents. (4) A list of the Issuer's authorised signatories and their respective specimen signatures. (5) A report of the relevant company search of the Issuer. (6) A report of the relevant winding up search or the relevant statutory declaration of the Issuer. General (1) The approval from the SC and, where applicable, all other regulatory authorities. (2) Where applicable, consent from existing noteholders of the Existing Programme, in respect of the CP/MTN Programme and/or security arrangement as may be required for the CP/MTN Programme. (3) The CPs and/or MTNs have received the rating P1 and at least A2 respectively from RAM. 11

12 (4) Evidence that all relevant transaction fees, costs and expenses in relation to the CP/MTN Programme will be paid in full. (5) The Facility Agent has received from the Solicitors a legal opinion addressed to them and the Trustee advising with respect to, amongst others, the legality, validity and enforceability of the Transaction Documents and a confirmation addressed to the Facility Agent that all the conditions precedent have been fulfilled. (6) Where consent is required for the CP/MTN Programme from lenders under any existing facilities including under security documents executed by the Issuer, the obtaining of such consent from the lenders. (7) Evidence that the DSRA and the PA have been opened as stipulated. (8) Such other conditions precedent as advised by the Solicitors and mutually agreed between the Issuer and the Joint Lead Managers from time to time. Conditions precedent to subsequent issuance of the CPs and/or MTNs to include but not limited to the following (all having to be in the form and substance acceptable to the Facility Agent (as the case may be)): (1) The rating for the CPs and/or MTNs shall be maintained at P1 and A2 respectively based on the latest prevailing rating available from the RAM; (2) Confirmation from the Issuer that all representations and warranties remain true and correct; 12

13 (u) Representations and warranties (3) No Event of Default has occurred or is continuing; and (4) Such other conditions precedent as advised by the Solicitors. : To include but not limited to the following: (i) the Issuer is a company with limited liability duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets; (ii) the memorandum and articles of association of the Issuer incorporate provisions which authorise, and all necessary corporate and other relevant consents and approvals of any administrative, governmental or other authority or body in Malaysia have been duly obtained and are in full force and effect which are required to authorise, the Issuer to execute and deliver and perform the transactions contemplated in the Transaction Documents in accordance with their terms; (iii) neither the execution and delivery of any of the Transaction Documents nor the performance of any of the transactions contemplated by the Transaction Documents did or does as at the date this representation and warranty is made or repeated (a) contravene or constitute a default under any provision contained in any agreement, instrument, law, ordinance, decree, judgement, order, rule, regulation, license, permit or consent by which the Issuer or any of its assets is bound or which is applicable to the Issuer or any of its assets, (b) cause any limitation on the Issuer or the powers of its directors, whether imposed by or contained in its memorandum and articles of 13

14 association or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgement or otherwise, to be exceeded, or (c) cause the creation or imposition of any security interest or restriction of any nature or any of the Issuer's assets; (iv) each of the Transaction Documents is or will when executed and/or issued, as the case may be, be in full force and effect and constitutes, or will when executed or issued, as the case may be, constitute, valid and legally binding obligations of the Issuer enforceable in accordance with its terms; (v) the audited financial statements (including the income statement and balance sheet) of the Issuer have been prepared on a basis consistently applied and in accordance with generally accepted accounting principles in Malaysia and give a true and fair view of the results of their operations and the state of their affairs and in particular disclose all material liabilities (actual or contingent) of the Issuer; (vi) no litigation, arbitration or administrative proceeding or claim which might by itself or together with any other such proceedings or claims either have a Material Adverse Effect (as defined below) on the financial condition of the Issuer or materially and adversely affect the Issuer s ability to perform its obligations under the Transaction Documents in accordance with their terms, is presently in progress or pending or, to the best of the knowledge, information and belief of the Issuer, threatened against the Issuer or any of its or their assets; For the purposes of the terms and conditions of the Programme, Material Adverse Effect 14

15 means any material adverse effect on the business or condition (financial or otherwise) or results of the operations of the Issuer or the ability of the Issuer to perform any of its obligations under any of the Transaction Documents. (vii) the Issuer is unaware and has no reason to believe that an 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 the Issuer or any of its assets are bound or affected, being a contravention or default which might either have a Material Adverse Effect on the financial condition of the Issuer or materially and adversely affect the Issuer s ability to perform its obligations under the Transaction Documents in accordance with their terms; (viii) Other than in the ordinary course of business, none of the assets of the Issuer is affected by any security interest, and the Issuer is not party to, nor are they or any of their assets bound by any order, agreement or instrument under which the Issuer is, or in certain events may be required to create, assume or permit to arise any security interest; (ix) the Issuer is in compliance and will comply with any applicable laws and regulations; and (x) any other representations and warranties as advised by the Solicitors and any other representations and warranties required to comply with SC s Guidelines on the Minimum Content Requirements for Trust Deeds. 15

16 (v) Events of Default To include but not limited to the following:- (i) (ii) (iii) (iv) the Issuer fails to pay any amount due from it under any of the Transaction Documents on the due date or, if so payable, on demand; any representation or warranty made or given by the Issuer under the Transaction Documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Notes and/or any of the Transaction Documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the failure; the Issuer fails to observe or perform its obligations under any of the Transaction Documents or the Notes or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in paragraph (i) above, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the failure; there has been a breach by the Issuer of any obligation under any of the Issuer s existing contractual obligations which may materially and adversely affect the Issuer s ability to perform its obligations under the Transaction Documents and, if in the opinion of the 16

17 Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the breach; (v) any indebtedness for borrowed moneys of the Issuer becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the Issuer is not discharged at maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within thirty (30) days from the date of such declaration or call, or the Issuer goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable; (vi) an encumbrancer takes possession of, or a trustee, receiver, receiver and manager or similar officer is appointed in respect of the whole or substantial part of the business or assets of the Issuer, or distress, legal process, sequestration or any form of execution is levied or enforced or sued out against the Issuer which may have a Material Adverse Effect on the Issuer, or any security interest which may for the time being affect any of its assets becomes enforceable; For the purpose of this paragraph (vi), references to substantial shall mean such value equivalent to or more than 5% of the Issuer s net assets as reflected in the Issuer s latest annual audited financial statements. 17

18 (vii) the Issuer fails to satisfy any judgement passed against it by any court of competent jurisdiction and no appeal against such judgement or no application for a stay of execution has been made to any appropriate appellate court within the time prescribed by law or such appeal or application for a stay of execution has been dismissed; (viii) any step is taken for the winding up, dissolution or liquidation of the Issuer or a resolution is passed for the winding up of the Issuer or a petition for winding up is presented against the Issuer and the Issuer has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer; (ix) the Issuer convenes a meeting of its creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with its creditors, or takes any proceedings or other steps, with a view to a rescheduling or deferral of all or any part of its indebtedness or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting all or any part of its indebtedness or any assignment for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction the Issuer becomes or is declared to be insolvent) or where a scheme of arrangement under section 176 of the Companies Act 1965 has been instituted against the Issuer; 18

19 (x) where there is a revocation, withholding or modification of any license, authorisation, approval or consent which in the opinion of the Trustee may materially and adversely impairs or prejudices the ability of the Issuer to comply with the terms and conditions of the Notes or the Transaction Documents; (xi) the Issuer is deemed unable to pay any of its debts or becomes unable to pay any of its debts as they fall due or suspend or threaten to suspend making payments with respect to all or any class of its debts; (xii) any creditor of the Issuer exercises a contractual right to take over the financial management of the Issuer and such event in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; (xiii) the Issuer changes or threatens to change the nature or scope of a substantial part its business, or suspends or threatens to suspend, or ceases or threatens to cease the operation of a substantial part of its business which it now conducts directly or indirectly and such change or suspension or cessation in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; (xiv) at any time any of the provisions of the Transaction Documents is or becomes illegal, void, voidable or unenforceable; (xv) the Issuer repudiates any of the Transaction Documents or the Issuer does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents; 19

20 (xvi) any of the assets, undertakings, rights or revenue of the Issuer are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; (xvii) any event or events has or have occurred or a situation exists which in the opinion of the Trustee may have a Material Adverse Effect on the Issuer, and in the case of the occurrence of such event or situation which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy it within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the event or situation; or (xviii) the Issuer breaches any provisions relating to the DSRA and the PA and the Issuer does not remedy the failure within a further period of seven (7) days after the grace period of twenty one (21) days as provided in the provisions for DSRA and PA; (xix) such other Events of Default as may be advised by the Solicitors and mutually agreed between the Issuer and the Joint Lead Managers. Upon the declaration of an Event of Default, the Trustee may or shall (if directed to do so by a special resolution of the noteholders) declare that the Notes together with all other sums payable under the Notes shall become immediately due and payable. Thereafter, the Trustee may take proceedings against the Issuer as it may think fit to enforce immediate payment of the Notes. (w) Principal terms and conditions for warrants (where applicable) : Not applicable. 20

21 (x) Other principal terms and conditions for the issue : (i) Issue Conditions The Notes may be issued in multiples of RM1,000.00, but subject to the FAST Rules and other standard conditions including without limitation, the following: - (1) a minimum issue size of RM10.0 million for each issue; (2) the issue notice shall be given to the Facility Agent at least eight (8) business days (for the first issuance) or seven (7) business days (for the subsequent issuance) prior and excluding the date of the proposed issue; and (3) any amount redeemed may be reissued for the purpose stated in item 2(k)(b) above, provided always any such amount re-issued shall not exceed the CP/MTN Programme s expiry date and limit of up to RM600.0 million in nominal value. (ii) Positive Covenants : To include but not limited to:- (i) (ii) the Issuer shall provide to the Trustee at least on an annual basis, a certificate confirming that it has complied with all its obligations under the Transaction Documents and the terms and conditions of the Programme and that there does not exist or had not existed, from the date the Notes were issued, any Event of Default, and if such is not the case, to specify the same; the Issuer shall deliver to the Trustee the following: (a) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of each of its financial years) copies of its consolidated 21

22 financial statements for that year which shall contain the income statements and balance sheets of the Issuer and which are audited and certified without qualification by a firm of independent certified public accountants acceptable to the Trustee; (b) as soon as they become available (and in any event within ninety (90) days after the end of the first half of its financial year) copies of its unaudited half yearly consolidated financial statements for that period which shall contain the income statements and balance sheets of the Issuer which are duly certified by any one of its directors; (c) promptly, such additional financial or other information relating to the Issuer s business and its operations as the Trustee may from time to time reasonably request; and (d) promptly, all notices or other documents received by the Issuer from any of its shareholders or its creditors which contents may materially and adversely affect the interests of the noteholders, and a copy of all documents dispatched by the Issuer to its shareholders (or any class of them) in their capacity as shareholders or its creditors generally at the same time as these documents are dispatched to these shareholders or creditors, (iii) (iv) the Issuer shall promptly notify the Trustee of any change in its board of directors and/or substantial shareholders; the Issuer shall promptly notify the Trustee of any change in its condition (financial or otherwise) and of any 22

23 litigation or other proceedings of any nature whatsoever being threatened or initiated against the Issuer before any court or tribunal or administrative agency which may materially and adversely affect the ability of the Issuer to perform any of its obligations under any of the Transaction Documents; (v) (vi) the Issuer shall promptly give notice to the Trustee of the occurrence of any Event of Default or any event which, upon the giving of notice and/or lapse of time and/or the issue of a certificate and/or the fulfilment of the relevant requirement as contemplated under the relevant Transaction Documents would constitute an Event of Default ( Potential Event of Default ) forthwith upon becoming aware thereof, and it shall take all reasonable steps and/or such other steps as may reasonably be requested by the Trustee to remedy and/or mitigate the effect of the Event of Default or the Potential Event of Default; the Issuer shall maintain in full force and effect all relevant authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) which is or may become necessary to enable it to own its assets, to carry on its business or for the Issuer to enter into or perform its obligations under the Transaction Documents or to ensure the validity, enforceability, admissibility in evidence of the obligations of the Issuer or the priority or rights of the financiers under the Transaction Documents and the Issuer shall comply with the same; (vii) the Issuer shall at all times on demand execute all such further documents and do all such further acts reasonably 23

24 necessary at any time or times to give further effect to the terms and conditions of the Transaction Documents; (viii) the Issuer shall exercise reasonable diligence in carrying out its business and affairs in a proper and efficient manner and in accordance with sound financial and commercial standards and practices; (ix) the Issuer shall promptly perform and carry out all its obligations under all the Transaction Documents (including but not limited to redeeming the Notes on the relevant maturity date(s) or any other date on which the Notes are due and payable) and ensure that it shall immediately notify the Trustee in the event that the Issuer is unable to fulfil or comply with any of the provisions of the Transaction Documents; (x) (xi) the Issuer shall prepare its financial statements on a basis consistently applied in accordance with approved accounting standards in Malaysia and those financial statements shall give a true and fair view of the results of the operations of the Issuer for the period to which the financial statements are made up and shall disclose or provide against all liabilities (actual or contingent) of the Issuer; the Issuer shall promptly comply with all applicable laws including the provisions of the Securities Commission Act 1993 ( SCA ) and/or the notes, circulars, conditions or guidelines issued by SC from time to time; (xii) the Issuer shall maintain the Minimum Security Cover Amount (as defined in item 2(x)(iv)(i) below); and (xiii) any other covenants as advised by the Solicitors and mutually agreed between the Joint Lead Managers and the Issuer. 24

25 (iii) Negative Covenants : To include but not limited to:- (i) the Issuer shall not create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind including, without limitation, title transfer and/or retention arrangements having a similar effect or any agreement to create any of the foregoing, but excluding liens arising in the ordinary course of business by operation of law and not by way of contract, and those security as contemplated herein, save and except for the following : (a) an existing guarantee granted by the Issuer to secure a loan of RM32 million granted to MBfH; (b) encumbrance(s) over buildings with an aggregate value of up to RM50 million which have been purchased and to be purchased over the next 3 financial years up to the financial year ending 31 December 2010 for the purpose of relocating existing branches as well as setting up new branches for the Issuer s business; (c) encumbrance(s) over buildings with an aggregate value of up to RM5 million per annum to be purchased commencing after the financial year ending 31 December 2010 up to the end of the tenor of the Programme for the purpose of relocating existing branches as well as setting up new branches for the Issuer s business; and In relation to items (b) and (c) above, in the event the said buildings are to be 25

26 purchased by the Issuer s subsidiaries, the Issuer may grant a corporate guarantee for the above or in the event there is a shortfall between the rental proceeds from the said buildings and amounts due to the respective financiers by the relevant subsidiaries, the Issuer shall be duly permitted to top-up the shortfall. (d) (e) encumbrance(s) over assets of the Issuer or its subsidiaries to satisfy the collateral requirement of Visa International or other franchisors, if required; and transfer of fixed deposits pledged in favour of existing financier(s) to other financier(s) as part of its financing arrangements with licensed financial institutions to fund the Issuer s credit card receivables; (ii) (iii) (iv) save and except for the disposal of assets to a special purpose vehicle pursuant to the ABS Programme which proceeds shall be deposited into the PA to repay the CPs/MTNs under the CP/MTN Programme, the Issuer shall not dispose any assets in excess of 5% of its net tangible assets as reflected in its latest annual audited financial statement in any financial year; the Issuer shall not add, delete, amend or substitute its Memorandum or Articles of Association in a manner inconsistent with the provisions of the Transaction Documents; the Issuer shall not reduce its authorised or paid-up share capital whether by varying the amount, structure or value thereof or the rights attached thereto or by converting any of its share capital into stock, or by consolidating, dividing or sub-dividing all or any of its shares, or by 26

27 (v) (vi) (vii) any other manner; provided that the Minimum Security Cover Amount (as defined herein) is maintained, the Issuer shall not utilise more than fifty percent (50%) of its profit after tax for any financial year for payment of any dividends or make any distribution to its shareholders; notwithstanding paragraph (v) above, the Issuer shall not declare or pay any dividends or make any distribution whether income or capital in nature to its shareholders if an Event of Default has occurred, is continuing and has not been waived, or if following such payment or distribution an Event of Default would occur; the Issuer shall not make any payments (whether in relation to principal, interest or otherwise) to its directors or shareholders in connection with any loans or advances from its directors or shareholders; (viii) the Issuer shall not obtain or permit to exist any loans or advances from its directors or shareholders, unless these loans and advances are subordinated to the CP/MTN Programme; (ix) subject to paragraph (viii) above, the Issuer shall not enter into any agreement with its shareholders, directors, subsidiaries or associated companies unless such agreement is entered into: (a) in the ordinary course of its business; (b) on an arms-length basis; and (c) will not have a Material Adverse Effect on the Issuer. (x) the Issuer shall not use the proceeds of the Programme except for the purposes 27

28 set out herein; (xi) other than lending in its ordinary course of business, the Issuer shall not lend any money to any party other than :- (a) to the Issuer's subsidiaries for the purchase of buildings of up to RM10.0 million in aggregate over the next 3 financial years up to the financial year ending 31 December 2010, and up to RM1.5 million per annum thereafter up to the end of the tenor of the CP/MTN Programme for the purpose of relocating existing branches as well as setting up new branches for the Issuer s business; and (b) to the directors, officers or employees of the Issuer, MBfH and its group of companies, as part of their terms of employment; and (xii) any other covenants as may be advised by the Solicitors and mutually agreed between the Issuer and the Joint Lead Managers. (iv) Designated Accounts : The Issuer shall open and maintain the following Designated Accounts with a financial institution which is acceptable to the Joint Lead Managers: - (i) Debt Service Reserve Account ( DSRA ) The DSRA shall be operated solely by the Facility Agent. The Issuer shall ensure that when required, funds are deposited into the DSRA to ensure a security cover ratio from the total of the Receivables, DSRA and PA shall be of at least one point one (1.1) times of the nominal value of all outstanding Notes at all times during the tenor of the Programme ( Minimum Security Cover Amount ). 28

29 The Minimum Security Cover Amount is to be confirmed/verified by an independent external party/ external auditor. In the event that the balance of the DSRA together with the credit card receivables of the Issuer and the balance of the PA exceeds the Minimum Security Cover Amount, the excess in the DSRA may be released to the Issuer. The Issuer may only withdraw sums from the DSRA for the payment of coupons and/or any redemption of the CPs/MTNs and other payments due under the Programme if at any time when the payments are due, the Issuer has insufficient funds to make full payments. However, any shortfall arising from the withdrawals from the DSRA to pay the coupons and/or redemption of the CPs/MTNs and other payments due under the Programme must be topped up by the Issuer until the balance held in the DSRA together with the Receivables of the Issuer and the balance of the PA is equivalent to the Minimum Security Cover Amount within twenty one (21) days from the date of withdrawal. Pending disbursements from the DSRA, all monies standing to the credit of the DSRA shall be managed by the Facility Agent. At the instruction of the Issuer, the Facility Agent may utilise such monies to make permitted investments as stated in the Permitted Investments paragraph below ( Permitted Investments ), provided that such monies utilised for Permitted Investments shall be remitted to the DSRA in a timely manner to meet any payment obligations of the Issuer when due and payable. (ii) Proceeds Account ( PA ) The PA shall be operated solely by the SecurityAgent. The Issuer may withdraw sums from the PA for the payment of coupons and/or redemption of the CPs/MTNs. 29

30 (v) Right to make permitted investments Pending disbursements from the PA, all monies standing to the credit of the PA shall be managed by the Security Agent. At the instruction of the Issuer, the Security Agent may utilise such monies to make Permitted Investments, provided that such monies utilised for Permitted Investments shall be remitted to the PA in a timely manner to meet any payment obligations of the Issuer when due and payable as permitted under the preceding paragraph. : Funds held in the Designated Accounts shall be permitted to be invested in Permitted Investments (as stated in paragraph below), provided that: (a) such funds utilised for Permitted Investments shall, where necessary, be remitted back to the Designated Accounts in a timely manner to meet any payment obligations of the Issuer when due and payable; (b) (c) such Permitted Investments are to be held and not traded; and shall be denominated in Ringgit. (vi) Permitted Investments : Permitted investments are as follows: (a) Bankers acceptance, bills and other money market instruments by licensed financial institutions with a short-term rating of P1 and a minimum long-term rating of AA2, or their equivalent; (b) Deposits with licensed financial institutions in Malaysia; (c) Treasury bills, money market instruments, and other debt instruments issued by BNM or the Government of Malaysia; (d) Any fund approved by the SC which invests in any of the instruments above. 30

31 (vii) Trading : The Notes shall be traded in the secondary market on a willing-buyer willing-seller basis. (viii) Availability : Upon completion of documentation and, unless waived by the Facility Agent, compliance of all conditions precedent and other applicable conditions to the satisfaction of the Joint Lead Managers. (ix) Redemption : Unless previously redeemed or purchased and cancelled, the Notes will be redeemed by the Issuer at 100% of their nominal value on their respective maturity dates. (x) Repurchase and Cancellation The Issuer or any of its related corporations may at any time purchase the Notes at any price in the open market or by private treaty, but these repurchased Notes shall be cancelled and cannot be reissued. (xi) Late Payment : Interest will be chargeable at a rate of one percent (1.0%) per annum above the cost of funds of Malayan Banking Berhad or such other bank as decided by the Trustee. Such interest shall be chargeable from the date such amount becomes due and owing up to the date of full settlement thereof. (xii) Status : The CPs and/or MTNs will constitute direct, unconditional, secured and unsubordinated obligations of the Issuer and shall at all times rank pari passu, without discrimination, preference or priority amongst themselves and at least pari passu with all other present and future secured and unsubordinated obligations of the Issuer, subject to those preferred by law and the Transaction Documents. 31

32 (xiii) 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 or whatsoever nature imposed or levied by or on behalf of Malaysia or any other applicable jurisdictions, or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law, in which event the payer shall be required to make such additional amount so that the payee would received the full amount which the payee would have received if no such withholding or deductions are made. (xiv) Legal Fees, Stamp Duty and Other Expenses : All costs, charges and expenses including Trustee, Facility Agent and Security Agent fees, legal and other professional fees, abortive fees, rating fees, stamp duties (if any), penalties, SC and BNM fees and other incidental costs, charges and expenses shall be borne by the Issuer, even if the Programme is subsequently aborted for any reason whatsoever. (xv) Other Conditions : The Notes shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and/or any other authority in Malaysia having jurisdiction over matters pertaining to the Notes and the Codes of Conduct. (xvi) Governing Law and Jurisdiction : Laws of Malaysia and exclusive jurisdiction of the courts of Malaysia. [The remainder of this page is intentionally left blank] 32